QUESTION:
I am looking to purchase property in Ontario, Canada. I am an American
Citizen, so does this increase the taxes I have to pay on this property. I
will be residing at the property for 6 months out of the year.
Thank you
=====================
david ingram replies:
There is so much involved in your decision. For instance, you do NOT
qualify for Ontario medical plans because you purchased property in Ontario
and are there for 6 months of the year. However, if you are seen by the
Canadian Authorities to be residing in Canada for more than 183 days a year,
Canada can win the right to collect income tax on your US income.
Article IV of the US / Canadian income Tax convention will likely stop this
from happening, but the possibility that the CRA (Canada revenue Agency) may
try. If you think this is unfair, the United States does the same thing to
Canadians who are in the US for more than 120 days a year three years in a
row.
For more information, go to www.centa.com and read the April 1994 newsletter
at the top left of the screen and then read the US/Canada taxation section
in the second box down on the right hand side.
The good news is that the actual property taxes are not higher because you
are a US citizen and if you make sure that you can prove you are in the US
for 190 days a year, Canada can not attack you for tax on your world income.
Whatever you do, do NOT fool around with 183 days. Make sure that you have
left a couple of weeks free just in case you have to come up to Canada for a
week to deal with property matters or attend a wedding or, or , or.
-----------------------------------------
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