Non-Resident Witholding Tax: Tenant’s Obligations

Withholding Tax for the leasing of real estate owned by Non-residents -  PLAZA HOMES

(Ontario)

Question:

How do you handle the tax witholding provision for non-resident landlords?

It’s located in Paragraph 16 of the Form 400 Agreement to Lease.

Answer:

The Tenant is obligated to withhold 25% of the gross rental payment unless the Landlord completes a s. 216 return reducing this to the net rental payment. It can be complicated, best to use an accountant at the outset.

There are substantial penalties for late payments, including personal liability on the part of the Tenant.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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