How much tax to pay on overseas real-estate rental income ?

[mitali]

My sincere thanks to all who offered their opinion/advice on this thread, which really has helped me make up my mind to go for some investment before final move to Canada.

Best regards,
Can10

Dear Can10,

Wish you and your family All the Best.

Mitali

 

[Aquib]

It will be taken twice. The whole idea of Canadian taxation is you get more deductions as you make less money. Once she start making money, that amount will be reduced by her net income. So suppose she made 5,000 in 2011 then her tax free portion will only be(10,527 - 5,000).

I disagree with Kanamen and mitali. I think you are very smart man trying to invest in what you know and also diversify your portfolio to secure your family cost of living. That way you reduce the possibility of becoming a public burden when you are in Canada. I have seen so many people trying to invest in Canada without really understanding the system as new immigrants and lose their investments. Some 60%+ new small businesses fail within the first three years in Canada.
All you need to do is play by the rules and pay your taxes and I think that's what you are trying to understand in this thread. Also make sure you let CRA know of your foreign investment of $100K+. You are requred by the law and also act in your favor if in the future you decide to bring the money back to Canada they are tax free. Keep up the good work.

¬m2l

Agree and + 1 for you brother .

While staying in UK , i bought 1 flat in Mumbai which now mortage free and got 40% appriciation in 3 year (book while its started building and getting possession in Deewali this year). And bought one semi detach house in UK (mortage ) 5 year ago .
Trust me property of £1.40k after paying 20% Dp , and £600 every month as installment , its nothing great . Atm this prop is £1.30k. If i sold it as it is I cant get my full downpayment back .

I am trying to give it to Rental agencey where i can atleast getting enough to pay mortage and will sell off once property price in UK market get appriciated .

Moral of story - only invest once you done all research and comparison.

Best to declare all overseas property with valuation while landing so that if future when you bring money in Ca you wont get taxed .

Plus selling prop in back home is easy whereas in develop country not you will get good return if you want to sell one house any buy other , also you will get tax rebate as first tome buyer only once .

 

[Aquib]

Let's assume I am earning $13 per hour from a survival job which makes a yearly income of $27,456 ($13 x 8h x 22days x 12months).

Let's also assume that I am receiving a yearly income of $15,000 from rent of my overseas property.

This makes total earning of $42,456. This falls under lowest bracket of taxable income, for which Federal Tax Rate is 15% and that of Provincial 5.05% (Ontario); total 20.05%. Assuming there is no other benefit available to get credit against taxation, hence the amount of tax deduction will be $42,456 x 20.05% = $8,512. This leaves a balance of $33,944 in hand; or a a monthly take-home income of $2,829.

1. Do you think this calculation is correct and reflects actual situation on ground.

2, Do you think a monthly take-home income of $2,829 would be enough for a family of 3 (me, my wife and our only child studying in high school) in the initial year(s).

Appreciate your comments

Kind regards,
Can10

+1 (though you sound bit rude but what ever you said is 100% agreed)

 

[Aquib]

One question ,
Please only people with experience answer ,
Its fine for me to declare Indian and UK property on my and my spouse name so that I will save Tax when i sell those and bring money to Ca in future .

Can we declare parental property which i am looking to sell my share in few year and bringing to Canada , will that money will be taxable as I will be paying tax in India while selling it and if need to pay tax again in Ca then its will be too much .

 

[steaky]

Best to declare all overseas property with valuation while landing so that if future when you bring money in Ca you wont get taxed .

I thought you declare them in your first income tax return.