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Taxes on US Rental Property owned by Canadians


If you are one of the many Canadians who own a vacation home in the US that is rented part of the year, or a full rental property, then you will be subjected to the tax implications inherent in this situation. The Internal Revenu Service (IRS) in the US will classify you as a “non-resident alien”, making you subject to US taxes. All rental income will be subjected to a 30% withholding tax. This must be deducted at source and remitted to the IRS, even if you receive your rental payments in Canada. This revenue is not considered to be “effectively connected”.

However, there are ways to avoid this holding tax on gross income, and be able to reduce the rental income by including relevant expenses and deductions. It is important that you consult a professional who is experienced in cross-border rental situations to find out what your options are. An ATS specialist can help you understand all the tax implications and help you to make the best decision for your individual situation.

To make processing your taxes in a fast and easy manner, make sure you bring all the necessary documents for your first appointment.