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Newcomers to Canada (immigrants and returning residents)
Ontario resident benefit
Rental income and non-resident tax
If you left another country to settle in Canada, the following information will introduce you to the Canadian tax system and help you to complete your first income tax and benefit return as a resident of Canada.
It applies only for the first tax year that you are a new resident of Canada for income tax purposes. After your first tax year in Canada, you are no longer considered a newcomer for income tax purposes.
• Are you a resident of Canada?
When do you become a resident of Canada for income tax purposes.
You become a resident of Canada for income tax purposes when you establish significant residential ties in Canada. You usually establish these ties on the date you arrive in Canada.
Newcomers to Canada who have established residential ties with Canada may be:
protected persons (including refugees) within the meaning of the Immigration and Refugee Protection Act
people who have applied for or received permanent resident status from Immigration, Refugees and Citizenship Canada
people who have received “approval-in-principle” from Immigration, Refugees and Citizenship Canada to stay in Canada
If you were a resident of Canada in an earlier year, and you are now a non-resident, you will be considered a resident of Canada for income tax purposes when you move back to Canada and re-establish your residential ties.
As a newcomer to Canada, you will need a social insurance number (SIN). For more information, visit Service Canada.
• When should you apply to receive benefits and credits?
Apply right away to get the Canada child benefit, the goods and services/harmonized sales tax (GST/HST) credit, and any related provincial and territorial programs.
Apply right away to get benefits and credits you may be entitled to
To get these benefits and credits, you or your spouse or common-law partner must be one of the following:
• a permanent resident, even with a temporary address
• a protected person
As soon as you get your social insurance number, apply for benefits.
Note : If you are a temporary resident, you must live in Canada for 18 months in a row and have a valid permit on your 19th month of living in Canada before you can apply for the Canada child benefit and any related provincial and territorial programs.
• After you apply for benefits and credits
You don’t have to apply for the benefits and credits every year. But every year you must:
• file your income tax and benefit return
• to continue receiving the benefit and credit payments that you are entitled to, you have to file your income tax and benefit return on time every year, even if you have no income in the year. If you have a spouse or common-law partner, they also have to file a return every year
• keep your personal information up to date
• to make sure you are getting the right amount of benefits and credits, you must keep your personal information updated with the CRA
• keep your supporting documents in case the CRA asks for them
• in the future, you may receive a letter from the CRA as part of the validation process, asking you to confirm your personal information
Sign up for:
• direct deposit to make sure you never miss a payment in the mail
• the MyCRA mobile application or My Account so you can get your personalized benefit information anytime, anywhere
• the benefits and credits electronic mailing lists to know when you will get your next payment.
Click here for more about new comers’ details.
Ontario trillium benefit (OTB)
The Ontario trillium benefit (OTB) is the combined payment of the Ontario energy and property tax credit, the Northern Ontario energy credit, and the Ontario sales tax credit. The annual OTB entitlement is usually divided by 12 and the payments issued monthly. Your 2019 OTB payments, which are based on your 2018 income tax and benefit return, will be issued on the 10th of each month, starting on July 10, 2019 (see note for exceptions).
The OTB program is legislated and funded by the Province of Ontario. The CRA administers this program on behalf of the province.
Ontario child benefit (OCB)
The Ontario child benefit (OCB) is a tax-free amount paid to help low- to moderate-income families provide for their children. OCB payments are delivered with the Canada child benefit in a single monthly payment. For July 2019 to June 2020, you may be eligible to receive up to $119.50 per month for each child under 18 years of age. If your adjusted family net income is above $21,887, you may receive a partial benefit. The OCB program is funded entirely by the Province of Ontario. The CRA administers this program for Ontario
GST/HST credit – Eligibility
You are generally eligible for the GST/HST credit if you are considered a Canadian resident for income tax purposes the month before and at the beginning of the month in which the Canada Revenue Agency makes a payment. You also need to meet one of the following criteria:
you are at least 19 years old
you have (or had) a spouse or common-law partner
you are (or were) a parent and live (or lived) with your child
How much you can expect to receive
Your GST/HST credit payments are based on the following:
your family net income
If you’re single, the amount from line 236 of your income tax return, or the amount that it would be if you completed one
If you have a spouse or common-law partner, your net incomes are combined to get your family net income
the number of children under 19 years old that you have registered for the Canada child benefit and the GST/HST credit
Per year, you could get up to:
$443 if you are single
$580 if you are married or living common-law
$153 for each child under the age of 19
Filing and reporting requirements
When you receive rental income from real or immovable property in Canada, the payer, such as the tenant, or agent, such as the property manager, has to withhold non-resident tax at the rate of 25% on the gross rental income paid or credited to you. The payer has to pay the tax to the Canada Revenue Agency (CRA) on or before the 15th day of the month following the month the rental income is paid or credited to you.
The payer has to give you two copies of an NR4, Statement of Amounts Paid or Credited to Non-Residents of Canada showing the gross amount of rental income paid or credited to you during the year and the amount of non-resident tax withheld. The payer also has to send to the CRA an NR4 information return, as explained in Guide T4061, NR4 – Non-Resident Tax Withholding, Remitting, and Reporting.
Generally, the non-resident tax withheld is considered your final tax obligation to Canada on the rental income from real or immovable property in Canada. However, if you elect under section 216 of the Income Tax Act, you are choosing to report your rental income from real or immovable property in Canada on a separate Canadian tax return. This allows you to pay tax on your net Canadian-sourced rental income instead of the gross amount and you may pay less tax. You may also receive a refund of some or all of the non-resident tax withheld. For more information, see Guide T4144, Income Tax Guide for Electing Under Section 216.
If you intend to elect under section 216, you may also want to consider having non-resident tax withheld on the net rental income instead of the gross amount. To do this, you and your agent (a resident of Canada who acts on your behalf regarding your Canadian rental income) have to complete Form NR6, Undertaking to File an Income Tax Return by a Non-Resident Receiving Rent From Real or Immovable Property or Receiving a Timber Royalty, and send it to the CRA for approval. You should send to the CRA Form NR6 on or before January 1st of each year, or before the first rental payment is due.
If the CRA approves your Form NR6, your agent can withhold non-resident tax at the rate of 25% on your net rental income (the amount of rental income available after the rental expenses have been paid). Your agent must pay to the CRA the tax on or before the 15th day of the month following the month the rental income is paid or credited to you. For more information see Guide T4144.
Generally, you have to send to the CRA your section 216 return within two years from the end of the year in which the rental income was paid or credited to you. If CRA approves your Form NR6 for a certain year, you have to file a T1159, Income Tax Return for Electing Under Section 216, for that year, even if you have no tax payable or you are not expecting a refund. The return is due on or before June 30, of the following year. If you have rental income from more than one rental property in Canada and you make an election under section 216, all of your Canadian rental income and expenses must be reported together on one section 216 return. For more information on the section 216 return filing due date, see Guide T4144.
Click here for more rental income information