Wording of non-compliant amount does not reflect different timing for various deductions
- The wording, “outlays made, or expenses incurred, in the taxation year” does not reflect the timing or amount of deductions such as prepaid expenses, CCA, and issue expenses on a non-made or incurred basis may not be properly reflected in the formula.
Inclusion of bad debt expenses
- It would seem inappropriate to include bad debt expenses in the non-compliant amount since the effect is to impose tax on more than the revenues collected.
Limiting to short-term rentals by the taxpayer
- It would seem appropriate to add the limitation that the short-term rental definition refers to short-term rentals by the taxpayer to address, for example, situations where the taxpayer leases the property on a long-term basis, but the tenant subleases it on a short-term basis.
90 days v. 30 days
- Most, if not all, municipalities and provinces, that have restrictions for short-term rentals use 30, not 90, consecutive days.
Unlimited assessment period
- Quaere whether it is necessary to provide no time limit on CRA assessments under s. 67.7.
Advantage to non-residents
- Non-residents who are not subject to Part I tax have a tax advantage over Canadian residents regarding the taxation of non-compliant short-term rentals.
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