Job Discussion Forums

[Scaliger]

Does anybody know if Canadians have to pay Canadian income tax while teaching in Oman? The catch is that I have a house in Canada that I�d like to hang on to until I get back, whenever that may be. (I�ll be going to Oman in the next few weeks.)

The house won�t be occupied or rented out. But if having a house makes me officially still a Canadian resident, then I might have to pay Canadian income tax, which after a while might end up as a bigger financial loss than selling the house now and buying another one later.

I�ve spoken to Canada Revenue Agency, and I�ve read the IT-221R3 many times, as well as the form �Determination of Residency Status,� but it�s still as clear as mud. I�ll mail in that �Determination� form, but I wonder how long it will take to get an answer from the CRA.

There was a post at one time, on one of these forums, about income tax for Australians, but I didn�t really comprehend those comments, and in any case the law for Canadians might be different.

Or does anyone know about the law for U.S. citizens regarding keeping a vacant house while abroad? I�d guess that Canadian and U.S. laws are similar in that respect.

� And does Oman have a �tax treaty� with Canada?

(I erroneously posted this at the Kuwait forum, not Oman�s. Oh, well, it was my first post at the Caf�. In spite of my error, VS caught the message, thanks very much, and led me to the Qatar forum. That helped a bit, but I still get conflicting messages on the �house� issue. I may end up paying an accountant or someone.)

[veiledsentiments]

Hello again... I'd say talk to a tax accountant in Canada who works with expats. You are more liable to get correct information. With the high tax rates in Canada, it is worth the cost to confer with one and do it right...

VS

[millie18]

CRA requires that the house NOT be available to you on short notice. In plain words, it has to be rented out on a 12 month lease with not less than 3 months notice required for the tenant to quit the premises before the end of the 12 months. In other words, the tenancy agreement is valid for another 12 months if you don't tell them to get out at least 3 months before the anniversary date. I did this for about 18 months and then I sold out.

Further, CRA also requires the rental to be "at arms length" which means you can't install your mother, or brother, or grandparents. However, I do know of people who have rented to trustworthy friends.

Long distance landlording is problematic at best and a nightmare at worst. CRA also considers any allowances (housing, tickets, education for children, medical, etc.) to be taxable as well as your actual salary if you don't meet the requirements. That can run into a lot more taxes than you might realize.

Getting the actual "non-resident for tax purposes" letter can take up to a year if you get the wrong person looking at your determination application. It could also take 2 months if you get the right person looking at it. Luck of the draw with CRA

[Scaliger]

Many thanks, Millie! You saved me from what might have been serious trouble. I had two more talks today with International Tax Services (part of CRA, more or less), and they confirmed what you said. So now I'm moving fast to get rid of all my worldly possessions. I'm also taking VS's advice and getting an accountant to handle some of it, especially investments.

Sounds as if I'm rich, but I'm certainly not.