Are Timeshares Rented by Non-Residents Taxed the Same as Regular Rentals in Canada?
Owning a timeshare in Canada can seem like the perfect way to mix investment and leisure — enjoy your property for a few weeks a year and rent it out the rest of the time. But for non-residents, that rental income still catches the attention of the Canada Revenue Agency (CRA).
So, are timeshare rentals taxed the same way as regular rental properties? In short: yes — with some key differences that depend on how your timeshare is structured and how often it’s rented.
Here’s what every non-resident timeshare owner needs to know about CRA taxation and compliance.
1. Timeshare Rental Income = Canadian-Source Income
If your timeshare property is located in Canada and generates rent, that income is considered Canadian-source income, even if you live abroad.
The CRA taxes this income the same way as traditional rentals:
By default, 25% tax on gross rent must be withheld, or
You can elect under Section 216 to be taxed on net income (after expenses).
So even if you only rent your unit for a few weeks a year, that rental activity is still taxable in Canada.
2. Ownership Type Affects Tax Treatment
Not all timeshares are structured the same way, and that matters for tax purposes:
Deeded Ownership: You own a fractional interest in the property itself. Rental income from your portion is taxed as standard real estate income.
Right-to-Use or Vacation Club Model: You don’t own the property but the right to use it. Renting it out might still generate taxable income if you earn a profit from transferring your use to someone else.
The CRA focuses on where the property is located and how the income is earned, not what kind of ownership you hold.
3. You Can Still Deduct Expenses
If you file under Section 216, you can claim deductions for any legitimate costs related to renting your timeshare, such as:
Property management or exchange company fees
Advertising or listing fees
Maintenance costs
Cleaning and utilities (if applicable)
Legal or accounting fees related to your rental income
However, personal-use expenses (like your own vacation weeks) cannot be deducted. The CRA may prorate your expenses based on the percentage of time your unit was rented vs. personally used.
4. Short-Term Rentals May Trigger GST/HST
If you rent your timeshare frequently for short stays and earn more than $30,000 CAD in gross revenue per year, you may have to register for GST/HST.
This usually applies only to those who operate multiple timeshare rentals or rent full-time through platforms like Airbnb. Occasional personal-use rentals are typically exempt.
5. Reporting Requirements Still Apply
Even if your timeshare income is small, you must:
File an NR6 form if you want reduced withholding, and
File a Section 216 return by June 30 of the following year.
Skipping these filings means losing refund eligibility and paying tax on gross income instead of profit.
