Tenants don’t have to foot unpaid tax bills for foreign landlords: minister
Global News
The minister responsible for the Canada Revenue Agency is weighing in as debate swirls online about whether a tenant can be held liable for their foreign landlord's unpaid taxes.
The Canada Revenue Agency will not go after tenants for tax owed by their landlords living out of the country, according to a statement from the minister of national revenue.
The clarification comes after confusion swirled online this week about whether a tenant is responsible for withholding taxes paid on rent to their landlord, if the property is owned by someone outside Canada.
“I want to reassure Canadians that the Canada Revenue Agency does not intend to collect any portion of any non-resident landlords’ unpaid taxes from individual tenants,” read a statement released by Minister Marie-Claude Bibeau on X, formerly known as Twitter, Friday afternoon.
“It is incorrect to state otherwise.”
Assertions that renters could be responsible for their landlords’ unpaid taxes, or that a tenant should withhold 25 per cent of their rent upfront and remit the taxes directly to the CRA, came in response to a Tax Court of Canada ruling last year.
Bibeau called the case (3792391 Canada Inc. v. The King) “an extremely rare situation.”
The case law and its possible implications for renters were first reported on widely by The Globe and Mail last month. That article described a Montreal man ordered to pay six years’ worth of unpaid taxes plus interest on behalf of his landlord, a decision that was held up in the tax court.
This past week, debate over the legitimacy of the law and of putting the onus on tenants to remit taxes for their foreign landlords took off online.