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Understanding Non-Resident Taxes and the Benefits of Property Management

It’s no secret that when it comes to paying taxes in Canada, things can get complicated fast. It can be difficult enough for a Canadian citizen to navigate the taxes they owe each year, let alone for foreign non-residents. The worst part? If you’re a non-resident and don’t provide the Canada Revenue Association (“CRA”) with what it requires come tax season, you can incur heavy fines and penalties. 

Fortunately, the property rental and management professionals at Emerald Management & Realty Ltd. have the necessary expertise to help non-residents of Canada assist with the withholding and remittances required for properties managed in Calgary and surrounding areas. 

To that end, let’s take a look at what non-resident taxes are, what you need to know about them as a non-resident of Canada, and why you should consider purchasing investment property.

An Introduction to Non-Resident Taxes

Before we talk about non-resident taxes, let’s quickly define what non-residency status is. For all intents and purposes, you can consider yourself a non-resident for tax purposes if you aren’t a government-recognized Canadian citizen or live in another country during the tax year. 

If you are certain that your residency status is that of a Canadian non-resident, then you owe non-resident taxes called Part XIII tax or Part I tax. In short, this means that you are responsible for filing these taxes on whatever income you make from business done in Canada. Depending on the kind of income that you receive, your tax obligations, like the type of tax you file, may vary.

It can be incredibly time-consuming to understand which types of income in Canada are subject to which non-resident tax. Investment property owners often opt to engage the services of a property management company or appoint a local agent to collect and submit withholding tax from their rental property. 

We highly recommend that you consult the expertise of your tax specialist in collaboration with a qualified property management companies such as Emerald Management & Realty Ltd. to make sure you understand your tax obligations and which sources of your income are taxable.  While we do not file your taxes for you, your accountant or tax specialist that prepares your annual Canadian tax returns may also be able to assist you assess additional concerns and potential benefits tied to your non-resident status.

Answering Common Questions About Non-Resident Taxes

There is a lot of information to digest about tax obligations that apply to Canadian non-residents, to say the least. We’ve compiled a short list of the most frequently asked questions we receive when it comes to understanding and paying non-resident taxes in Canada.

  • Am I considered a Canadian non-resident? For tax purposes, you should consider yourself a non-resident in Canada if you live in a different country for the majority (more than 183 days) of the government-recognized tax year.
  • What are the types of non-resident taxes? Tax obligations for Canadian non-residents are the Part XIII tax and Part I tax on income from business done in the country.  This includes income earned from revenue properties such as investment rentals.
  • Do I need to file an income tax return? Generally speaking, non-residents in Canada pay tax returns on Canadian income if they need to claim a refund or are obligated to pay a Part XIII or Part I tax.
  • Is there a deadline for submitting my non-resident taxes? The tax return date in Canada is April 30 of the year after the tax year, or June 15 of the year after the tax year for non-residents with a spouse performing business in Canada.  Your return must be filed by June 30th of the following year.  As the Owner, you are responsible to make sure the proper return is filed and for any assessments by CRA.

  • How much do I have to pay or withhold?  In accordance with CRA’s guidelines as of May 2021.  Once your property is rented, Emerald Management & Realty Ltd. as your agent, would withhold and remit 25% of the Owner’s gross rental income to CRA.
  • How is a T4 different from a NR4 statement?  A NR4 statement is similar to a T4, but it is a statement of rental income for a non-resident.

How do I protect myself as a non-resident or foreign resident?

  • Consult with our team at Emerald Management & Realty Ltd. and your account and/or tax specialist to determine if non-resident taxation applies to you.  
  • Check and go direct to the source.  Visit CRA’s website for more information and contact them with any questions or concerns.
  • Take steps to collect the required documentation and review it with your accountant or tax specialist prior to submission
  • Ensure that you complete the remittance of NR4 tax on time to avoid penalty or further complications

Benefits of Property Management

It is worth understanding the benefits of owning property if you’re considering purchasing real estate for yourself. At Emerald Management & Realty, we help our clients realize the biggest benefits and profit from our experience that comes with our property management services such as:

  • Peace of mind for yourself and the management of your tenant
  • Licensed property management brokerage that can support you with the preparation and remittance of NR4 filings to the CRA
  • Timely rent collection
  • Lower vacancy rates
  • Fewer potential turnovers resulting from professional tenant screening
  • Smaller chance of legal problems
  • Property emergency support 24 hours a day, seven days a week
  • Preventative maintenance programs to preserve and improve on the equity of your rental property investment

If you’re considering how property management services may be right for your real estate needs, then you’ve come to the right place. The professionals at Emerald Management & Realty make it simpler for non-residents to enhance their property investments and maximize profitability.   For more information on how we can help and our cost for NR4 support, contact our team today!

Make your property work for you by getting in touch with our experienced, friendly team today on our website or by calling us at 403-237-8600

Evicting a Tenant for Non-Payment of Rent

For an investor buying a rental property, it’s not unusual that now and then, there will be some issues with a tenant.

While good property management can help mitigate or prevent potential problems. real estate investment in never trouble-free. One of the most common complaints is that some tenants are always late with their rent and then they finally stop paying.

Evictions are usually the last resort — but if you do have to take that route, this article will provide more background about the process involved.

Most common reasons for evicting a tenant

Evicting a tenant is usually the chosen route for the following reasons:

  • Non-payment of rent
  • Breaching other terms of the rental agreement
  • Damaging the rental property
  • Repeatedly disturbing or endangering others in the property

Remedies for a breach of the rental agreement

If the tenant breaches the rental agreement, a landlord can terminate the tenancy by:

  • Giving the tenant a 14 day notice to vacate; or
  • A 24-hour notice (for causing significant damage, assault or threatening the landlord or another tenant)
  • Applying to the Residential Tenancy Dispute Resolution Service (“RTDRS”) or Court of Queen’s Bench for an Order to Vacate

14-Day Eviction Notice for unpaid rent

To seek an eviction for a tenant’s failure to pay rent, the 14-Day Notice of Eviction must be properly served — and, in order for it to be enforced, it must: 

  • Be in writing and show the date of service
  • Specify the address of the property
  • Include the amount of rent that is owed at the due date (or when the notice is given)
  • Provide the reason for the termination
  • Include the date and time the tenancy is due to end
  • Be served by the landlord or property manager;
  • Include a statement that says that the tenancy will not be terminated if the tenant pays all rent due on or before the termination date specified

If the tenant won’t leave

If the tenant doesn’t pay after the 14-Day Notice has been served or if the objective is to terminate the relationship with a tenant sooner than later, it’s best to make an application to the Court of the Queen’s Bench or contact the RTDRS to arrange a court hearing.

 The costs involved:

  • Filing for a hearing with the RTDRS
  • Registering the Order with the Court of the Queen’s Bench
  • Hiring a bailiff if the tenant doesn’t move out even after getting an Order
  • Hiring a full service eviction company or lawyer
  • Seizing, storing and/or selling assets left behind by the tenant

If the tenant fails to comply with the Eviction Order, it’s possible to apply for a Writ of Possession.  A bailiff is engaged to help recover the property, allowing you to legally change the locks and possibly have the police charge the tenants with trespassing.

It’s wise to keep all records and documentation on-hand, as these may be needed for the Court.  Documentation helps to demonstrate the actions you took to correct the situation, how many times you spoke with the tenant about the outstanding rent, expenses you may have incurred and it also provides a record of any possible damage to the property.

If you need help with matters relating to eviction of tenants

At Emerald Management & Realty, our team of property management professionals has lengthy experience working on eviction cases and can work on the paperwork and communications and collaboration with other professionals to assist with the eviction of tenants before, during and after court eviction dates. 

If you have any questions or are looking for assistance in matters relating to tenant evictions, we’re here to help. Call us at 403-237-8600 or fill out our contact form and we’ll be in touch as soon as possible.

How to Screen a Prospective New Tenant

As a real estate investor, the importance of screening your tenants cannot be underestimated. The very last thing you want to do is to lease to a troublesome tenant who will have a negative effect on your investment. It’s for this reason that tenant checks in Canada are essential.

Female Realtor Shaking Hands With Couple Interested In Buying House

The process of screening a potential tenant doesn’t have to be difficult. Therefore, it’s best to adhere to the following steps when selecting an appropriate tenant for your property:

1. Request an application

To start, every prospective tenant should complete a formal application.

The applicant should be made aware and agree by signing the form that a background check, criminal history report and/or credit check will be requested, and that authorisation for such checks is being granted.

At the very least, the following information is required:

  • Financial information, including bank accounts and credit cards, balances and other major monthly payments
  • Current income level (basic salary plus bonus’ or other add-ons)
  • Current and previous employers
  • Contact information for previous landlords with addresses, details of rent paid and reasons for leaving
  • Number of occupants and number and type of pets
  • Personal references, including names, length of acquaintance and phone numbers


2. Arrange a tenant check  

After you have pre-screened applicants and narrowed down tenants who meet your requirements, the next step is a credit check. This will reveal details about the tenant’s previous credit history, going back up to 10 years. It’s possible to obtain a credit report and credit score using the Equifax Identity Report.

When the credit report is available, key items to consider include:

  • Credit history (this includes history of late payments, charged-off credit card accounts or major issues or delinquencies, such as bankruptcy)
  • Current debt (including high credit card balances, major loans for a car or the need for alimony payments or other unpaid debts)


3. Perform a background check

A background check can be arranged by using the prospective tenant’s social security number and such tenant verification services  will reveal details of:

  • Evictions from other properties
  • Any criminal record
  • Public records to see if tenant is involved in a legal battle, or has been sued in the past (eg. for unpaid rent, unpaid child support or another serious financial matter)

Many Canadian landlords are subject to the Personal Information Protection and Electronic Documents Act (PIPEDA), which has recent updated guidelines to clarify landlord rights and responsibilities.


5. Ask for references

Two of the main references to seek are from the tenant’s former landlord(s) and current or past employers, with key questions being:

  • Would you rent an apartment to this tenant in the future?
  • Does the tenant owe you any money or have a history of late payments?
  • Did the tenant cause any major damage in their last unit?
  • Did you repay the security deposit with or without deductions when the tenants moved out?
  • Did the tenant disrupt the neighbours or cause any major issues whilst in the unit?


For the tenant’s employer:

  • Is the tenant a current employee? If so, from when and on what contractual terms?
  • Does the tenant have a steady, reliable income source? If so, can this be verified?


 6. Interview the tenant

The Fair Housing Act stipulates that landlords cannot discriminate based upon disability, family status, national origin, race, religion or sex. You can still ask reasonable questions either in a phone or face-to face interview with the tenant, such as:

  • Do you smoke?
  • Do you have any pets? If so, how many and what are they?
  • What is your typical work day? Do you work night shifts or odd hours?
  • Do you plan on getting a roommate in the future or have any friends or relatives who frequently spend the night in your home?


Our team can help

To mitigate your risks as a landlord, it’s integral to screen every potential tenant — as no one wants to go through the hassles and process of evicting a tenant. Sometimes, instinct counts as much as the hard facts from the tenant’s credit report and background information.

In any event, care is needed to ensure you do not break any privacy laws in the relevant Landlord and Tenant Act.

If you are looking for assistance in finding tenants or with tenant screening, why not give us at Emerald Management and Realty a call today? You can also contact us by email.

We look forward to hearing from you!

A Landlord’s Guide to Early Lease Termination

In any lease agreement signed between a landlord and a tenant, the agreed, fixed period of occupancy will be specified therein.

Although the landlord and tenant may have every intention of allowing the lease to continue for the period specified, sometimes situations arise to prevent or change this and breaking a lease is not uncommon.

The landlord may wish to recover possession or the tenant may be forced to move out earlier if certain circumstances arise. And, so, the question of how to terminate a lease early often comes up.

Therefore, let’s have a good at some of the key issues to be considered in the event of early termination of a lease:


Firstly, establish the reasons for early termination

Fundamentally, the reasons to early terminate can be separated into landlord and tenant related issues. The landlord may want to:

  • sell the property and the buyer wants to have vacant possession without the encumbrance of a tenant;
  • undertake extensive decoration and/or remodelling or renovations or repairs to the property, and which require it to be vacant for a certain period of time;
  • live there him- or her- self

On the other hand, the landlord may wish to early terminate the lease as the tenant:

  • has failed to pay rent and meet other financial obligations in the lease agreement, despite appropriate warnings and notice periods;
  • is failing to meet his repair and maintenance obligations which may mean that the property is becoming uninhabitable, with possible health and safety and liability consequences for the landlord;
  • is breaching other lease conditions such as keeping a pet when this is expressly not allowed, disturbing neighbours with excessive noise, damaging the property, using the property for an unauthorised use, or participating in illegal activities on or near the premises.


Then, review the lease agreement

Carefully go through the terms and conditions in the lease signed by both the landlord and tenant. You need to establish exactly what language has/has not been included in the clauses of the agreement as this will form the basis for your next actions.

The provisions in the lease for any early termination can also be grouped into two parts:

  • Default:

Refers to the failure (by the tenant) to comply with the terms and conditions of a signed lease. Often, written warnings are given by the landlord to the tenant to “cure” the default before early termination due to default can proceed.

In the case the default is not cured, the due legal process will have to be followed in order to enforce early termination, probably requiring statutory notice periods. It’s also necessary to record all relevant correspondence leading up to and during the termination process. In some cases, the matter may end up in civil court.


  • Express or special conditions in the lease

If, in advance of granting a lease to a tenant a landlord plans that the property may be sold, extensively renovated or may, one day, become his/her residence, then such provisions can be written into the agreement. This will include how much notice is required to terminate the lease.

It’s in the best interests of a landlord to include as many contingencies as possible, as the more opportunities there are to early terminate a lease, the more flexibility there will be in the future.


Always take advice from an experienced professional

If you are thinking about an early termination of an existing lease or want to make such provision in a new lease to give you more options, just give us a call at Emerald Management and Realty. We’re specialists in working with and advising clients about leasing matters.

It’s easy to arrange an appointment to meet or you can contact us via email about your lease issues or other real estate related matters.

We look forward to meeting up!