Korean Job Discussion Forums

[ifa79]

Hi
Now that I have 2 months off in the summers now, I am thinking about buying a cottage near the beach in Nova Scotia.

This will affect my Canadian residency status. Does anyone else have any experience with owning recreational property in Canada while living overseas? I haven't filed taxes since I came to Korea 4 years ago and haven't "declared" non-residency on a form yet.

I know that I will pay property taxes to the county and any deed-related taxes. I've read on a few sites that non-residents can own cottages in Canada without paying income taxes. I'm also planning to rent the cottage and would pay those capital gains taxes as well. I just don't want to pay tax on my income earned in Korea.

I am going to start filing taxes after buying the cottage but I want to know if anyone else has experience either owning residential or recreational properties in Canada.

Also, I may just put the cottage in my parents name while supplying the money for the mortgage.

Please let me know any advice or experiences.

[arby]

owning property is considered a primary tie to canada which means you are subjected to all the taxes, not only on your income but also on the property. the canada revenue site has more details on it.

[adventurer01]

If you apply for non-residency status and are granted it before you purchase the cottage. Then the cottage can be purchased as a non-resident of Canada, and shouldn't make you a resident again, as long as nothing else changes. You will have to pay taxes on it as a non-resident if you are earning income from it, so 25% withholding tax on any rental income, and then filing an income tax return as a non-resident every year.

If you buy the cottage first and then apply for non-residency, you MIGHT still get non-residency status, but I wouldn't count on it. If you are considered a resident, then all world income will be taxed, including Korean income.

Revenue Canada Agency will always has the final say on these things, so nothing is guaranteed. You can find out more information on the Revenue Canada website.

You may also want to consult a tax advisor with non-resident experience in Canada.

Just so you know, it took more than 3 months for Revenue Canada to process my non-residency status application.