Baby boomers beware. If you have aspirations of spending your retirement in a sunny, tropical locale, foreign property ownership tax rules might rain on your parade, reports The Globe and Mail.
Arming yourself with the proper knowledge is often the difference between living out your retirement dreams or shivering through the frigid world of tax rules and regulations, says Jason Safar, a PwC Canada tax partner.
“Every country has its own tax system, and we all acknowledge that the tax system is a series of arbitrary rules," Safar told The Globe and Mail. "It’s just a system for government to fund obligations."
There are a number of issues that can have a direct effect on property taxes, what must be reported to the Canada Revenue Agency, transactions involving foreign businesses, inheritances and even your personal health care situation.
For example, if you are a Canadian citizen with a home in the United States, and you frequently commute between the two countries, the U.S. tax rules might apply to you well before the 180-day limit is up.
“Once you’re averaging more than 120 days in the United States. you start to trigger U.S. tax filing obligations,” Safar says.
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