Canadian withholding tax on real estate proceeds by non-residents?

Question

I'm a UK citizen, I plan to buy and resell some real estate in Alberta. As I'm a non-resident in Canada I suggest that any purchase proceeds or other amounts payable to me in respect of the Alberta real estate investments would be subject to Canadian withholding tax. Is that so? If yes is there any way to reduce that withholding tax? Thank you.

Answer 1

The default withholding rate is 25% on land and 50% on buildings.  (This is from gross proceeds!)

CRA will accept requests for reduced withholding  (25% of gain on land and a variable amount on the undepreciated amount of gain on the building) so that you don't have to wait until you file the tax return to get a refund.

Answer 2

The withholding tax on rental income for non-residents is 25% of the gross rental income. This would be considered your final tax obligation to Canada.

However, this amount may be reduced to 25% of the net rental income (rent minus current expenses) if you find an NR6 election with the Revenue Agency and file a T1159 on time each year.

The following link is a guide published by the Revenue Agency specifically for people in your situation. It also includes contact telephone numbers for the International Tax Services Office.

http://www.cra-arc.gc.ca/E/pub/tg/t4144/...