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Owners & Renters Beware

If a Whistler property managers' services or pricing sound too good to be true, they
probably are.

Over the years, Whistler has seen many property management companies come and go. Usually, the new managers on the street charge low prices to get a piece of the Whistler market. As their growth outstrips bookings, service declines, and the owners and managers of the company burn out. Some companies close down while many others get purchased by larger property managers.

When dealing with a property manager, both owners and renters should be cautious. There are rules and regulations in the industry, but little enforcement. For example, managers are required to place all rental deposits in a trust account (for safe keeping). Personally, I know of companies who did not follow this law.

You may ask why this matters? History has proven here...

"It is possible for dishonest property managers to steal thousands of dollars in rental deposits and skip town. In this case both the owner and vacation renter lose their money and the renters are left searching for a place to stay..."

Whistler Blackcomb home owners and holiday renters now have an alternative to property management... Vacation Rental by Owner.

Any motivated owner with Internet access and some available time can rent out their Whistler vacation condo or chalet without property managers.

Advertising a Whistler rental property used to be very expensive... ski magazines, big city newspapers, and printed brochures. And, on top of these costs, there were dozens of telephone calls to deal with. With rapid development of travel planning on the web, those days are gone.

If you own a home in Whistler Resort, you should consider being your own property manager. There are VRBO websites available for your advertising.

It is much easier to do owner-direct vacation rentals using email than it ever was using the telephone. For Whistler vacation rentals by owner we recommend ResortAc.com.

Taxes on Whistler Vacation Rental Real Estate

Whistler Real Estate Taxes on Vacation Rentals

Tax implications of Whistler Real Estate…

Real property in Whistler Resort is taxed by the local authorities, depending on the assessed value of the land and buildings. If the owner of the property is a local resident and the home is classified as a principal residence, some grants (discounts) apply. If the Whistler property is owned by a non-resident, these grants do not apply.

If the Whistler real estate will be used as a rental home, other taxes apply as well. Income tax on revenues will be attracted by renting out the home. In addition, GST (goods and services tax) will apply in certain situations.

As with any taxable situation, it is advisable to consult with an accountant or tax planner who knows the ever-changing tax laws in British Columbia and Canada.

Minimize taxes on Whistler real estate rentals…

Article Provided by Doug Fox, BDO Dunwoody

Non-residents who earn rental income in Canada are subject to tax. Canada Customs and Revenue Agency (CCRA) is the federal authority that administers the rates, payment and collection of income taxes.

Income tax is calculated separately from other taxes such as the Goods and Service Tax and Real Property Tax. Income tax is calculated for each taxation year. The taxation year for individuals and certain other entities begins January 1 and ends December 31, and for corporations it is their financial year end. Generally the owner(s) of the rental property are considered to earn the rental income and are taxed accordingly.

Tax on rental income earned by a non-resident must be calculated and withheld from the rental payments, by the payer or creditor of the rental income. The payer or creditor of the rent is normally a tenant or property manager. The non-resident withholding tax is 25% of the gross rent and is calculated monthly. Gross rent is the rental income before any expenses such as management fees or utilities, have been deducted. Each month, the tenant or property manager must remit to CCRA, the amount of non-resident tax that has been withheld. The tenant or property manager must also complete form NR4 at the end of each taxation year and provide copies to CCRA and the property owner. Form NR4 provides information about the gross rental income earned and the amount of non-resident tax withheld. It is important that non-resident owners provide form NR4 when having a Canadian income tax return prepared.

After the end of a taxation year, where a non-resident has earned rental income, the non-resident may elect, but is not required, to file a Canadian income tax return in regard to the rental income and expenses for that taxation year. A Canadian income tax return filed by a non-resident to report rental income is often called a section 216 return. By filing a section 216 return, the non-resident may deduct certain expenses from the rental income to arrive at taxable income, and then calculate tax in a manner similar to a resident of Canada.

The amount of tax calculated when a section 216 return is filed, will usually be less than the amount of tax that has been withheld and the non-resident would be entitled to a refund of the excess tax. For any taxation year that a section 216 return is not filed by the non-resident, the amount of tax withheld by the tenant or property manager will become the actual amount of tax for that year. A section 216 return for a taxation year must be filed within two years of the end of the taxation year. CCRA will not accept late filed returns. If the payer or creditor of the rental income has failed to withhold the correct amount of non-resident tax during a taxation year, CCRA may assess the non-resident owner for the tax directly at a later date. Ensuring that a section 216 return is filed for each taxation year that rental income is earned, will remove the possibility of being assessed the full 25% non-resident tax at a later date.

Form NR6

As the amount of tax to be withheld by the tenant or property manager is significant and may impair the necessary cash flow from a rental property, there is an option to reduce the non-resident withholding tax. The option is effected by filing form NR6 with CCRA. This form is a joint undertaking by the non-resident owner and the tenant or property manager, that a section 216 return will be filed within six months of the end of the taxation year and that the tenant or property manager will remit the full amount of non-resident tax if the section 216 return is not filed.

Form NR6 when accepted by CCRA, will reduce the amount of non- resident tax to be withheld from, 25% of the gross rent, to 25% of the net rent. Net rent is the gross rent less certain expenses such as management fees and utilities. The tenant or property manager must continue to withhold the full amount of non-resident tax until CCRA sends approval of the NR6 form filed. Approval from CCRA may take several weeks or even months.