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What should Canadian digital nomads know about tax residency and rental income while living in Thailand?

Canadian Tax Residency Expat Tax Issues Rental Income Tax Non-Resident Tax Thailand Immigration Tax Obligations for Expats Canada Revenue Agency (CRA)Digital Nomad Taxes

Jul 20, 2024

4 months ago

ORIGINAL POSTER

For the Canadian digital nomads who own a rental property and moved to Thailand: When you moved to Thailand, did you do anything specific to become a "non-resident for tax purposes" of Canada? I'm in Thailand over a year now and am just learning about this 🤦‍♂️ Concerned I may need to pay significant taxes that I didn't expect. 

Eg. I am learning I may need to pay 25% of rent I collected as tax to the government. 

I'm talking with my accountant now about it, but wanted to get others' experiences.

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TLDR : Answer Summary

Canadian digital nomads living in Thailand need to consider their tax residency status as it can significantly impact their tax obligations, particularly concerning rental income from properties in Canada. To be classified as a non-resident for tax purposes, they must declare this status on their tax return to the CRA. Failure to do so may result in having to pay Canadian taxes on rental income collected while living abroad. Discussions among expats highlight the importance of understanding these obligations, and many recommend consulting with tax professionals to maximize deductions and navigate tax laws effectively.

Tim ********

You have to still pay tax on rental income in Canada. I was told that the CRA has been cracking down in those that don’t comply.

I used HR Block and they were really helpful. Maximized my deductions: HOA Fees, insurance, property taxes etc to minimize exposure.

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John *********

No need to worry. If you are paying taxes that means you are earning money.

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Randy ******

Justine Castro of Canada via Cuba loves to TAX HARD WORKING CANADIANS and buy votes to CHEAT in elections.

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Peter **********

I don’t know much about Canadian Taxes but have found a (new) group about Thai taxes for expats:

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Todd *********

You absolutely need to declare non-residency on the following year tax return. After you have established residency in your new country. If you have not done this and been approved by CRA for non-residency, you are fully liable for Canadian taxes as if you were still living there. So yes, you owe 25% or more on all rent collected since you left Canada.

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Leo ******

Put in invoices for maintenance to the effect of the rent you've earnt...

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Michael ********

If its anything like UK even non resident you still have to pay tax on money earnt on property in UK

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Koj***

ORIGINAL POSTER

@Michael *******

yes, I was prepared to pay tax to Canadian government on rental income, the same as I did when I was in Canada. I was just not aware things may change if I become a non-tax resident, and didn't know what would cause me to fall into this status in the first place.

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Koj***

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Diane **********

Rent cash in hand ✋️

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Andrew *****

Your questions seems to be addressing citizens of Canada who owned real estate property in Canada, you should ask in a Canadian group instead

For Thailand property, most Thai owners pay on their leasing tax of 12.5% of the yearly collected rent if I remember correctly, 5 years ago

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Koj***

ORIGINAL POSTER

I ask here because I thought I'd more likely find Canadians who are in a similar situation. Do you have a specific recommendation of which Canada group I should ask for this question? Thanks

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Helen ********

Canadians in Thailand | Canadiens en Thaïlande

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Koj***

ORIGINAL POSTER

thank you!

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Koj***

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Max *************

You can always search for a Canadian group. You might be lucky.

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Koj***

ORIGINAL POSTER

@Max ************

thanks, I know I can search, but I wanted to know if he had a specific group in mind

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Koj***

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Angy ********

the tax on rent is not a new tax but I don't know someone that pay that because they benefit from the fact that immigration office don't share data with tax office. Maybe the same will be for the new taxes but the problem can arrive by data shared from the banks

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Koj***

ORIGINAL POSTER

yes, I'm aware of and was prepared to pay normal income tax in Canada for the rental income. But I wasn't aware that things change if you're outside of Canada for an extended period and become a "non-tax resident of Canada". I thought that everything would stay the same for me as a Canadian citizen, just continuing to pay Canadian taxes, and not pay tax in Thailand, especially since I'm on a LTR visa. So I'm a bit confused what will change my status to "non-tax resident" and how that affects what and who I pay taxes to.

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Todd *********

so with LTR, that would exclude you paying taxes on any income from outside Thailand. Although the Canada-Thai tax treaty already covered much of that. The problem for you might be retroactively establishing non-residency. However... you don't just 'become' a tax non-resident. You have to declare it to CRA AND meet their parameters. If you do, they will apply exit tax on any non-registered investments and establish value of your house on the date of your departure. (you will need to do this) As any capital gains accrued in your absence on your home are also fully taxable as it is no longer your primary residence.

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Koj***

ORIGINAL POSTER

Will exit tax apply to my rental property that I still own? Eg. I need to pay XX% of the retroactive appraisal value of the property when I left?

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Koj***

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Henrik *****

As long as it is only rumors, nobody knows excactly what effect it possibly will cause.

If it actualy will happend, you can not know what effects it will have, until it has been in effect for more than a year.

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Koj***

ORIGINAL POSTER

rumours on what? the non-tax resident thing seems to be an established concept (I'm now learning about it)

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Todd *********

with thailand only for the last 40 years. How did you not know??

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Todd *********

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