and more foreign nationals are seeking to purchase a
second home in Canada either for temporary visits
or for the long¬term permanent residency hopes.
Usually, there is no problem with a foreign national
purchasing property, especially if the individual
has no intention of living in Canada for more than 6
months. The only tax consideration that may arise is
the amount of capital gains that the individual will
have to pay upon disposition or the holdback on
The challenge comes when individuals, once here, wish
to remain in Canada for more than 6 months. The complexity
arises because the concept of residency in immigration
differs from the concept of residency for income
Generally speaking, individuals can come into Canada
for up to 6 months as visitors or, as immigration calls
them - temporary residents. They can
even extend such stays up to 12 months and in the odd
occasion, up to 18 months provided that the intention
remains bona fide and temporary. However, immigration
does not appreciate individuals simply renewing
status in order to live in Canada on an indefinite basis
under the guise of being visitors.
Once a person has remained in Canada for more than
183 days, CRA can technically ask the individual to
tax on world-wide income.
Canada Revenue Agency (CRA) has a different view of
residency. Once a person has
remained in Canada for more than 183 days (6 months),
CRA can technically ask the individual to pay income
tax on world-wide income. An individual may thus be deemed
to be resident Canada by virtue of "sojourning" in
Canada throughout a taxation year for a period aggregating
183 days or more.
Although Canada does have certain tax treaties, such
as with the United States, which invoke a number of "tie
breaker" rules to determine where residency
is for tax purposes, the 183 day mark is one of the benchmarks
which CRA will use to determine whether the visitor is
required to pay Canadian tax.
There are a number of factors (for CRA) which may
be relevant in the determination of an individual's residence.
For example, some of the questions to be asked are:
long and how frequent have been visits to Canada?
are the spouse and dependents?
Where is the personal
property, furniture and
What were the purposes of the visits
Is the ownership of residence in Canada on a
long term basis?
What memberships does the individual have in Canadian
social clubs, organizations, community groups?
Is there a telephone listing in Canada?
How many hank accounts are there in Canada?
Are there credit cards issued by Canadian
Are there local newspaper subscriptions with a
Was there a will prepared in Canada?
Was a Canadian income tax return filed?
Have there been a substantial severing of all ties
with the former country of residence?
Thus, ownership of a home in Canada by a foreign national
may be the least of the concerns when one considers
the complexities of immigration combined with income