Tax question Canadian owner renting Vacation home in Mexico

[Ken313]

We are buying a condo in Mexico and will be using Airbnb to rent.  Will a percentage be withheld for taxes? Do I have to file in canada and mexico and pay taxes to both countries?

[Carlos86]

Hi Ken,

According to the SAT (equivalent to CRA in Mexico) you would need to pay a 25% tax: http://omawww.sat.gob.mx/english/Paginas/arrendamiento_de_bienes_inmuebles.aspx

It doesn't seem like any tax is witheld at source but I can't confirm that.

CRA says that you have to declare your income from the rental in Mexico (on your Canadian return) but there is a treaty with Mexico to minimize double taxation so make sure you claim your foreign tax credits on your canadian return.

I am also interested in buying a place in Mexico so would love to connect. Please reach out: *****

DISCLAIMER: I'm a financial advisor in Vancouver so I need to clarify that this does not involve official advice. Reminder to always contact a tax expert.

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