Renting out property in Canada: landlord guide

Costs of buying

• Land transfer tax is set by the province (and in Toronto also by the city), commonly 1–3% of the price for typical homes.
• Ontario charges non-residents a 25% non-resident speculation tax, and British Columbia a 20% additional tax for foreign buyers in specified areas.
• Budget around 1.5–4% of the price in total closing costs.

Buying as a foreigner

• Non-Canadians are banned from buying residential property (up to three units) in cities and towns until 1 January 2027, with exceptions such as some work permit holders.
• Permanent residents and citizens are not affected.
• When a non-resident sells, the buyer must withhold 25% of the price unless the seller has a clearance certificate from the CRA.

Official guidance: CMHC: Prohibition on the purchase of residential property by non-Canadians · CRA: Non-residents and Canadian property

How rental income is taxed

• Residents report rent and expenses on Form T776 with their return, due 30 April, and pay tax on the net amount at federal and provincial rates.
• Non-residents: 25% of the gross rent is withheld. You can instead file a section 216 return and pay on net income; with Form NR6 approved, your agent withholds 25% of the net rent each month.

Expenses claimable against rental income

• Mortgage interest and property taxes.
• Insurance, repairs and maintenance, and management fees.
• Condo fees, utilities you pay and advertising.
• Capital cost allowance (depreciation) on the building is optional and can't create or increase a rental loss.

Tenancy rules

• Tenancy law is provincial. In Ontario the standard lease form is required, and a deposit can only be for the last month's rent.
• In British Columbia the security deposit is capped at half a month's rent.
• Most provinces limit rent increases to once a year with written notice; some cap the size of the increase.

Key dates

• 30 April: Tax return and balance owing (15 June filing if you are self-employed)
• 31 March: NR4 slips from agents who withheld tax on a non-resident's rent
• Within 2 years of year end (6 months with NR6): Section 216 return for non-resident landlords
• Set by your municipality: Property tax instalments

Questions landlords ask

What is a good rental yield in Canada?

Gross yields on condos in Toronto and Vancouver are often 3–5%; smaller cities can be higher. Check the cash flow with the loan in the rental yield calculator for Canada.

Can foreigners buy property in Canada?

Mostly not until 1 January 2027: non-Canadians are banned from buying residential property in cities and towns, with some exceptions. Ontario and British Columbia also charge extra taxes on foreign buyers.

How is Canadian rent taxed for a non-resident owner?

25% of the gross rent is withheld. Filing a section 216 return lets you pay tax on the net rent after expenses instead, and Form NR6 lets your agent withhold on the net amount during the year.

Which expenses can I claim against rental income in Canada?

Mortgage interest, property taxes, insurance, repairs, management and condo fees, utilities you pay and advertising, plus optional capital cost allowance.

Official sources

• CRA: Rental income (T4036)
• CRA: International and non-resident taxes (NR6, section 216)
• CMHC: Prohibition on the purchase of residential property by non-Canadians