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I am a Canadian citizen emigrating with family by year end 2019. To avoid taking a huge loss am not willing to sell my home now so will handover to a property manager for long term rentals.
What is the best way to achieve an Emigrant CRA classification while still maintaining my bank and investment accounts. I need my Canadian bank accounts to receive part of my monthly income.
Possible approaches from reading CRA online info:
1. Transfer home to property manager and sign long term lease, keep bank accounts and drivers license, dispose of vehicles, drop provincial health insurance and pay tax on rental income
Concerns/uncertainties:
o In addition to bank accounts, adding a rental property might be secondary ties too many therefore leading to the risk of being deemed a factual resident for tax purposes
o
2. Incorporate and list self as sole director, transfer home to company
Concerns/uncertainties:
o Requirements and process of incorporation
o Ease of transferring home to corporation
o Long term implication especially when I move back and how to transfer property back as primary residence
In summary I want the following:
- To be classified as Emigrant (non-resident) by CRA
- Ability to report earnings from outside Canada
- Pay no taxes on income earned abroad
- Pay taxes on income earned inside Canada (rental income)
- Keep bank accounts/investment accounts/drivers license/passport
Owning a rental property in Canada is a secondary tie and will not cause you to remain a tax resident of Canada. Make sure there is a lease agreement in place and that rent is charged at market rates. As a non-resident of Canada owning a Canadian rental property, you will be responsible for paying a monthly tax to the CRA equal to 25% of the monthly rents collected. You can recover this tax by filing a Section 216 Non-Resident Rental Return annually, which I can prepare for you.