# Taxes and housing in Canada if moving to Mexico



## xavaero (Feb 24, 2011)

Hi there! This is my first post to your forum! My husband has just received an opportunity to work in Mexico City. We are currently living in Vancouver, BC. My questions are ...

1. Do we have to sell our house in Vancouver (like we did when moving to the Middle East)?
2. Will we be penalized if I am living in Mexico but receiving a paycheck from Canada into a Canadian account (I have the opportunity to teach online University courses so I don't need to be based in Canada).

We don't want to have to sell everything and do the 'non-resident' thing again. My husband was reading on the internet about the NAFTA agreement and looked as though we don't have to pay tax in Canada if we are paying tax in Mexico.

Can someone shed some light on this confusing issue?

Thanks

Shirley


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## RVGRINGO (May 16, 2007)

Welcome to the forum.
You do seem confused and I'm certainly no expert on this, but here are my first impressions:


1. Why would you have to sell your home in Canada? I assume that you could rent it to someone while you are in Mexico.
2. I expect that you would be taxed normally on your Canadian income.
3. There are tax agreements between the two countries. You won't be taxed twice.
4. Working in Mexico will require the permission of INM (Immigration) on your visa.

I'm sure there are some other Canadians in your position who can provide all the details you need.


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## xavaero (Feb 24, 2011)

Thanks so much for your reply. The reason I am confused is that when we lived in the Middle East, we had to sever all ties with Canada (sell our house, etc.). If we have to do this for Mexico as well, we will have to sell our house and I will not be able to work and be paid by a Canadian company (unless my husband declares all of the money he makes in Mexico). If we have to pay a huge amount of tax in Canada, it kind of defeats the purpose of me working through Canada ... we just want to make sure we do things right and without too much hassle (we honestly don't want to sell the house because then we will have to pay storage for all of our furniture we won't be taking to Mexico) ...

It is a huge decision ... 

thanks again ...

S


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## RVGRINGO (May 16, 2007)

You'll want to check with a Canadian tax accountant, etc.


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## conklinwh (Dec 19, 2009)

I certainly don't know Canadian tax law and I was always sponsored by a US company but in none of my overseas assignments was I forced to sell my house. That was an option and there were pros/cons. Under US tax law, I was able to get a tax credit for all foreign paid taxes so no duplicate. Key in my case was that stated intention of company was that I wouldn't be adversely effected US tax wise by the assignment as I was given a lot of taxable benefits.


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## kcowan (Jul 24, 2010)

I think you are talking about the difference between no tax treaty (Saudi) and Mexico which has a tax treaty with Canada. You need to declare all your income to Mexico and pay your taxes here. Then you need to file in Canada and claim the tax paid in Mexico against any taxes owing in Canada. Chances are you will be fine, having paid all the taxes owing.

Unlike Saudi where you had to severe Canadian ties, in Mexico you can retain your house in Canada. The company should provide an accounting service. Many companies will ensure that such a posting does not cost you anything after tax.


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## digame (Apr 10, 2009)

This person is wanting to be a non-resident of Canada, otherwise taxable on world income with credit for taxes paid elsewhere. Hence the talk about severing all ties or they will be deemed to continue residency for tax purposes.
It has been many years but I would guess the law has not changed that you can elect on a rental of your home in Canada and file a special form accordingly. That does not preclude severing all other ties though.
Obviously spending about $ 300 to meet with a C.A. with international experience would be money well-spent, rather than listing a question on a website. Penny-wise and pound-foolish.


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