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

C

Can10

Star Member
Aug 21, 2010
183
16
I am a non-resident PRC holder and planning to move to Canada in the near future.

To make my initial years in Canada less difficult financially, I intend to buy 2 apartment houses overseas, each costing around CAD 80,000. This will earn me a yearly rental of around 8% of the value.

My question is how much tax I will be paying for this global earning?

I shall be grateful for forum friends' expert inputs.
 
I heard from a friend that in USA tax on rental earning from overseas property is well below 1%. I could hardly believe this. I actually want to know how much I should invest in real-estate so that a certain amount of fixed net income is generated when I will start living in Canada. This net income would be used to meet a major portion of my monthly living expense.

Appreciate your kind comments.
 
Can10 said:
I am a non-resident PRC holder and planning to move to Canada in the near future.

To make my initial years in Canada less difficult financially, I intend to buy 2 apartment houses overseas, each costing around CAD 80,000. This will earn me a yearly rental of around 8% of the value.

My question is how much tax I will be paying for this global earning?

I shall be grateful for forum friends' expert inputs.
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Nothing... if u don't disclose that in ur annual tax filing... no one does BTW.
If u do disclose, it'd then be added to ur taxable income & the net payable'd depend on lots of things... exact figures cannot be ascertained. Besides, just that rental i/c alone might not yet attract anything... 'coz with that (only)8% u'd not reach the tax bracket.

Qorax
 
qorax said:
Nothing... if u don't disclose that in ur annual tax filing... no one does BTW.
If u do disclose, it'd then be added to ur taxable income & the net payable'd depend on lots of things... exact figures cannot be ascertained. Besides, just that rental i/c alone might not yet attract anything... 'coz with that (only)8% u'd not reach the tax bracket.

Qorax
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This is totally off the top of my head, which knows the bare minimum about taxes, does this also mean that people would not include those rental properties in their statement of worth in the first place? Otherwise, wouldn't CRA be wondering why the income wasn't reported?
 
most of the Canadians whom I had talked and they work abroad or derive income from abroad do not claim their overseas income in Canada, so no taxes. The disadvantage is that someone applies for a loan/ plc/ mtg, then his overseas income will not be considered and he may not qualify or qualify for a less amount.
 
explorer101 said:
most of the Canadians whom I had talked and they work abroad or derive income from abroad do not claim there overseas income in Canada, so no taxes. The disadvantage is that someone who applies for a loan/ plc/ mtg, then his overseas income would not be considered and he may not qualify or qualify for a less amount.
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Correct... Well said (+1)!
 
qorax said:
Nothing... if u don't disclose that in ur annual tax filing... no one does BTW.
If u do disclose, it'd then be added to ur taxable income & the net payable'd depend on lots of things... exact figures cannot be ascertained. Besides, just that rental i/c alone might not yet attract anything... 'coz with that (only)8% u'd not reach the tax bracket.

Qorax
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What does the Canadian law say mr.Qorax?? forget if any one or you does or not?? If the law says that we need to report foreign income and it is liable for tax then one should...just my opinion...

. if some one really loves canada then he/she should declare his/her foreign income and pay taxes on that if he/she is liable to...just saying words that you love canada too much and bla bla isn't enough......huh
 
Dear Mates, thanks a lot for sharing your thoughts.

I well understand that some of you have tried to describe what usually people do under such a situation, while others drew attention to concerning Principles/rules. Obviously, your intention was to bring to my notice both ways that people exercise; without advising which way to follow. It is entirely one's own choice which route he/she would take.

I am targeting a foreign income of CAD 12,000 per year after tax and would want to know how much I should invest in real-estate which would produce this much rental income for me in Canada. For example if gross rental income in foreign country is CAD 15,000 and it is subject to Canadian tax of say; 20%, then ultimately I would be getting CAD 12,000 (i.e. CAD 15,000 - 20%). In this case, I would need to invest in real-estate a sum of CAD 187,500 to earn a gross rental income of CAD 15,000 @8%. If the tax percentage is increased to say; 30%, then I would require to invest CAD 215,000 to keep my net earning unchanged at CAD 12,000.

Is this workable?

I shall be grateful for your kind comments.
 
Azazaz are you in Canada ?. In case you are not, then i can understand you making above comments.
 
harry_aussie said:
Azazaz are you in Canada ?. In case you are not, then i can understand you making above comments.
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pardon me? if i am in canada i wud be paying all my taxes and i wont cheat authorities, huh?

and if it is such a big problem then why people not complain to government than cheating on taxes
 
Yes, there are many ways of not paying tax for the country that I reside in.......the country that is giving me tons of other opportunities........BUT WOULD I DO THAT....NO I WILL NOT.....nor would I suggest anyone to do it.

I would rather have a high percentage deduction than live in the fear that CRA might catch me one day and I lose my peaceful nights of sleep till that day.....is it worth it? No...its not. I would rather buy "my peace of mind" in lieu of paying taxes. People have also to declare their world wide income to get benefits for Child Taxes...I would declare it too even if I got less amount or no amount in my benefit.....Just for the peace of my mind.

This is purely my opinion....and I am sure Qorax da and Explorer have good intentions too.

Mitali
 
mitali said:
Yes, there are many ways of not paying tax for the country that I reside in.......the country that is giving me tons of other opportunities........BUT WOULD I DO THAT....NO I WILL NOT.....nor would I suggest anyone to do it.

I would rather have a high percentage deduction than live in the fear that CRA might catch me one day and I lose my peaceful nights of sleep till that day.....is it worth it? No...its not. I would rather buy "my peace of mind" in lieu of paying taxes. People have also to declare their world wide income to get benefits for Child Taxes...I would declare it too even if I got less amount or no amount in my benefit.....Just for the peace of my mind.

This is purely my opinion....and I am sure Qorax da and Explorer have good intentions too.

Mitali
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Seconded........
 
azazaz said:
pardon me? if i am in canada i wud be paying all my taxes and i wont cheat authorities, huh?

and if it is such a big problem then why people not complain to government than cheating on taxes
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Hope Canada gets more people like you to strengthen its Economy.... :)

Mitali
 
mitali said:
Hope Canada gets more people like you to strengthen its Economy.... :)

Mitali
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thank you mitali. canada is lucky to have people like you. we always need seniors like you who show us the right path and peaceful way of life. thanks
 
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