Can International Students Renting Out Canadian Property Be Considered Non-Resident Landlords?
Can International Students Renting Out Canadian Property Be Considered Non-Resident Landlords?
Thousands of international students come to Canada every year — and many invest in condos, houses, or shared properties while studying. Some even rent out spare rooms or entire units to offset costs.
But here’s where it gets confusing: when these students earn rent, are they considered non-resident landlords in the eyes of the Canada Revenue Agency (CRA)? The answer depends on their tax residency status — not just their visa type.
Let’s unpack how the CRA determines who qualifies as a non-resident landlord and what rules apply to international students who rent out Canadian property.
1. Residency Status Determines Tax Responsibility
The CRA doesn’t define “residency” by immigration status — it defines it by where your primary ties are.
You’re considered a non-resident if:
You live outside Canada most of the year,
You don’t have a permanent home or strong residential ties in Canada, and
You don’t intend to stay indefinitely.
You’re considered a resident for tax purposes if you have significant ties to Canada — like a long-term lease, job, or dependents.
Most international students on temporary study permits are residents for tax purposes while studying, but non-residents if they leave Canada for extended periods (like summer or after graduation).
2. Renting Property While Living in Canada
If an international student rents out part of their home (for example, a basement or shared unit) while living in it, the income is treated as Canadian resident rental income, not non-resident income.
They file a regular Canadian tax return (T1) and pay tax on the net income after expenses — just like any other Canadian resident.
However, if they leave Canada and continue renting the property while living abroad, their status changes. They now become a non-resident landlord, and different CRA rules apply.
3. Renting Out Property After Leaving Canada
Once the student moves back to their home country or another nation, their rental income becomes non-resident Canadian-source income.
This means:
The tenant or property manager must withhold 25% of the gross rent and remit it to the CRA monthly.
The student can elect under Section 216 to pay tax on net income and potentially get a refund.
They must file NR6 and Section 216 forms annually to remain compliant.
Failure to file can lead to overpayment and CRA penalties.
4. Selling Property Later
If the international student eventually sells the property, the CRA will treat the profit as a capital gain — and because they are non-resident at the time of sale, the buyer must withhold 25% of the sale price unless a Certificate of Compliance (Form T2062) is filed.
This step is often overlooked by first-time sellers leaving Canada.
5. Keep Clear Records During Transition
If you’re an international student transitioning from resident to non-resident status, keep records of:
When you left Canada
When rental activity started
CRA filings and approvals (NR6, Section 216)
Proof of rent received and expenses
This documentation protects you during audits or when claiming deductions later.
