Leaving Canada does not mean abandoning all responsibilities related to your Canadian property. Whether you own an apartment that you rent out, simply want someone to look after an empty property, or your home serves as collateral or is up for sale — living abroad complicates property management and raises a range of legal, tax, and practical issues. This article explains how to properly transfer authority to another person, what paperwork is required, what pitfalls to watch out for, and how to avoid penalties from the CRA.
Step One: Understand Exactly What You Are “Transferring Management”
Before signing any documents, it’s important to clearly understand what the phrase “transferring management” actually means. In reality, it can mean several fundamentally different things—depending on your situation.
If your property is rented out, transferring management means appointing a person or company to collect rent, oversee tenants, handle repairs, ensure compliance with the lease agreement, and adhere to provincial rental laws. Such a person needs either a written agreement (a contract with a management company) or a legally executed power of attorney—depending on the scope of their authority.
If the property is vacant (you are not renting it out but want someone to monitor the property’s condition, pay utilities, collect mail, handle repairs, or manage a potential sale), you first need a legal power of attorney that grants this person the right to act on your behalf—to sign documents, manage funds, and enter into contracts.
Finally, if you plan to sell the property while you are abroad—you will need not just any power of attorney, but a document with clearly defined powers to enter into purchase and sale agreements, as Canadian banks and notaries scrutinize such documents closely.
Power of Attorney for Property: The Legal Foundation of It All
What is a Power of Attorney for Property
Power of Attorney for Property (POA) is a legal document through which you (the grantor, or in older terminology, the donor) authorize another person (the attorney) to act on your behalf in financial and property matters. Despite the word “attorney” in the title, this person is not required to be a lawyer—it can be anyone you trust.
It is important to understand: in Canada, the concept of “Power of Attorney for Property” is governed by provincial legislation, and it varies by province. In Ontario, it is the Substitute Decisions Act, in British Columbia — the Power of Attorney Act, and in Alberta — the Powers of Attorney Act. This means that a power of attorney executed in one province is not always automatically recognized in another — more on this below.
Three Types of Power of Attorney: Which One to Choose
General POA grants authority for a wide range of financial actions but automatically becomes invalid if you lose legal capacity. It is suitable for short-term absences or specific one-time tasks.
Continuing / Enduring POA remains valid even if you become mentally incapacitated. To ensure this, the document must clearly include the appropriate wording—for example, the words “continuing” or “enduring.” This is the best option for long-term residence abroad, since no one knows what might happen along the way.
Limited (Limited / Specific POA) applies only to specific actions or a specific period of time—for example, the right to sign a single specific contract or manage real estate at a specified address for two years. This is convenient if you don’t want to grant overly broad powers and know exactly what you need.
Most people who leave Canada for an extended or indefinite period choose a Continuing (Enduring) POA—so the document remains valid under any circumstances.
How to Properly Draft a Power of Attorney
A power of attorney for real estate must comply with the requirements of the province where the property is located. Typically, it requires:
- Your signature (as the grantor) in the presence of one or two witnesses (depending on the province);
- Your spouse, children, the attorney-in-fact, or anyone who stands to benefit from the document cannot serve as a witness;
- Notarization — not always required by law, but most financial institutions and Land Title Offices will require a notarized document in practice.
The text of the document must clearly specify: the scope of authority (what exactly your attorney-in-fact can do—collect rent, sign contracts, sell real estate, pay bills, etc.), the term of validity, the property address, and the full details of the attorney-in-fact.
If the properties are located in different provinces—lawyers recommend drafting a separate power of attorney for each province, as provincial laws differ and automatic recognition of documents between provinces is not guaranteed.
Interprovincial and International Recognition of Powers of Attorney
Is your Ontario power of attorney valid in BC?
The issue of interprovincial recognition of a POA is one of the most common sources of misunderstanding. If your property is located in British Columbia and the power of attorney was executed in Ontario, BC does not automatically recognize it.
Under Section 38 of the BC Power of Attorney Act, a power of attorney from another province may be recognized as a valid enduring power of attorney in BC, but only if it is accompanied by a Certificate of Extra-Jurisdictional Solicitor—that is, a certificate from a lawyer in the province where the document was issued, confirming that it meets local requirements and remains valid.
In practice, banks, the BC Land Title and Survey Authority, and other institutions may be unfamiliar with this procedure and refuse to accept the document, requesting additional documentation. That is why the simplest solution is to draw up a separate power of attorney in accordance with the law of the province where you reside.
How to draw up a power of attorney if you are already abroad
If you have already left Canada and did not have time to draw up a power of attorney before your departure, there are two main options.
The first option is to contact a local notary in your country of residence. You draft and sign the document, after which it undergoes the apostille process. As of January 11, 2024, Canada officially joined the Hague Convention and began issuing apostilles. This means that a document certified by a notary in another signatory country and bearing that country’s apostille can be recognized in Canada—but only after you’ve met all procedural requirements and, likely, provided a translation into English or French.
The second option is to contact the Canadian consulate or embassy in your country of residence. Consular officials can certify signatures on a number of documents, but the full range of notarial services is not always available—check with the specific office for details.
Regardless of the method, after receiving the apostilled document: (1) find a certified translator to translate the document if it is not written in English; (2) send the document to your representative in Canada; (3) if necessary, provide copies to banks and other institutions with which they will need to interact.
Will banks and institutions accept your power of attorney
Even a perfectly drafted power of attorney can run into practical obstacles. Canadian banks have their own internal rules regarding the acceptance of POAs and may refuse them if the document was issued in another province or abroad. To avoid this, bring the power of attorney to your bank in advance (ideally before you leave) and ask them to confirm that they will accept it. Also, contact the Land Title Office of the relevant province if you plan to conduct real estate transactions.
Who to appoint: an individual or a management company
If you choose an individual as your agent
Most often, this is a relative, a close friend, or a Canadian lawyer. The main requirement is that the person must be a resident of Canada. If you appoint a non-resident of Canada as your agent, certain banking and investment transactions may prove impossible: some financial institutions allow them to be conducted only through a person who has resident status.
In addition to residency, practical requirements include: having free time to monitor issues related to your housing, understanding the province’s basic rental and property laws, and being willing to assume legal responsibility—since the agent is obligated to act in your best interests and is liable for any misconduct.
If you hire a property management company
For rental housing, the most convenient option is to enter into a contract with a property management company and simultaneously designate it as your “Canadian Agent” for CRA purposes. The property management company handles the entire operational cycle:
- Searching for and screening tenants, signing lease agreements in accordance with provincial law;
- Collecting rent and maintaining financial records;
- Coordinating repairs and scheduling service calls;
- Conducting regular property inspections;
- Issuing legal notices to tenants and, if necessary, handling cases through the Landlord and Tenant Board or the relevant provincial tribunal;
- Withholding and remitting non-resident rental income tax to the CRA.
The cost of services provided by property management companies in Canada typically ranges from 8% to 12% of the monthly rent. Additional fees include: a one-time fee for finding a new tenant (usually 50–100% of the monthly rent), a setup fee (approximately $300–500), and, for some companies, a percentage of the cost of coordinating repair work.
Your Non-Resident Status and What It Means for Taxation
How the CRA Determines Non-Residency
Resident or non-resident status for tax purposes in Canada is determined not by citizenship or physical presence, but by the existence of so-called “residential ties”—connections to Canada. Primary ties include: owned or rented housing in Canada, a spouse or children who remain in the country. Secondary ties include a driver’s license, bank accounts, credit cards, a health card, and pets.
If you sever most of your primary ties to Canada, the CRA will consider you a non-resident. To officially confirm your status, you can fill out Form NR73 (if you are leaving Canada) and send it to the CRA. A response may take several months, so it is best to submit the form as early as possible.
The 25% Withholding Rule on Rent
Once you become a non-resident of Canada and your property is rented out, Part XIII of the Income Tax Act applies: 25% of the gross rent (before deducting any expenses) must be withheld monthly and remitted to the CRA.
This obligation falls on the tenant or property manager. If there is a management company, it usually performs this function. If there is no management company, the legal obligation to withhold and remit the 25% falls on the tenant. It is critically important to understand this: in 2024, the Tax Court of Canada issued a ruling according to which the tenant was required to pay over $40,000 in taxes, interest, and penalties on behalf of their non-resident landlord, who had failed to pay on time. In other words, a tenant’s ignorance of the law does not exempt them from liability—and this is a very serious risk if you haven’t established the correct system.
Payments must be made no later than the 15th day of the month following the month in which the rent was received.
Form NR6: How to Reduce Withholding
A 25% withholding from gross income is very often much higher than your actual tax liability after deducting expenses. To pay tax on net income (i.e., after deducting expenses such as mortgage interest, repairs, insurance, management fees, utilities, etc.), you and your Canadian Agent must complete Form NR6.
NR6 must be filed before the first rent payment of each calendar year (or by January 1 of the following year if the lease is already in effect). Once approved, the CRA will allow you to withhold 25% of the net amount. Important: If your property manager has co-signed the NR6 with you, they are thereby guaranteeing to the CRA that you will file the Section 216 return on time. Penalties may also be imposed on the management company for violating this obligation.
Section 216 Return and NR4 Slip
At the end of the year, a non-resident landlord files a Section 216 return (Form T1159)—this is a special tax return that allows for the refund of funds overwithheld during the year if actual expenses turned out to be higher than those projected in the NR6. The return must be filed by June 30 of the following year.
The NR4 Slip is a document similar to the T4 (i.e., a “pay stub” for non-residents), which lists the total rent received and the amount of tax withheld. It is usually prepared by the property manager or the tenant themselves and provided to you and the CRA—typically by March 31 of the following year.
Pitfall: Underused Housing Tax
If you are a non-resident of Canada and do not rent out your property (or rent it out but under terms that do not meet the exemption requirements), you may be subject to the *Underused Housing Tax (UHT) *—an annual federal tax of 1% of the property’s market value, effective January 1, 2022. However, it is important to note that the 2025 federal budget proposed eliminating the UHT for 2025 and beyond, so you should check the current status of this tax directly on the CRA website at the time of filing your return.
Practical Transfer of Control: Step-by-Step
Preparing for Departure
The ideal scenario is to resolve all legal and organizational matters before leaving Canada. This will allow you to have a power of attorney drawn up by a regular notary in your province, verify that your bank will accept the document, and set up all processes without rushing.
Make a list of everything that needs to be handed over: keys and alarm system passwords, contact information for the plumber, electrician, and other service providers, tenant details and the expiration dates of their leases, insurance policy information, bank account details for receiving rent, and logins for utility company online portals. Hand this package over to your representative or management company before you leave.
Notifying Tenants
Tenants must be notified in writing of the change in the property manager or management company. The letter should include: the name and contact information of the new manager, new payment details for rent, the procedure for submitting repair requests, and the effective date of the changes. Keep proof that the tenants received this notice—this will protect you in case of disputes.
Important to note: the lease agreement is not terminated or altered when the property manager changes. Tenants continue to live under the same terms—only the contact person changes.
Notifying the Bank
Notify your Canadian bank of your change in status (non-resident) and, if required, provide the original or a notarized copy of the power of attorney. Some banks require an in-person meeting to process such authorizations—do this before you leave. Discuss how your authorized representative can transfer funds to you from the rental account, as international transfers require specific arrangements.
Updating the Insurance Policy
If you own real estate, notify your insurance company that you no longer reside in Canada and that the property is being rented out. A change in the property’s use may affect the terms of your insurance. A discrepancy between the actual use and the policy terms could result in a denial of coverage in the event of a claim.
Legal Obligations of a Non-Resident Landlord
Leaving Canada does not relieve you of any obligations as a landlord under provincial law. You remain responsible for:
- Maintaining the property in a habitable condition (heating, plumbing, structural safety);
- Complying with the province’s rent increase guidelines;
- Complying with the legal grounds and timeframes for evicting a tenant;
- Complying with fire safety standards and municipal requirements.
In Ontario, for example, the Residential Tenancies Act requires particularly strict compliance: there is a detailed procedure for every step—from raising the rent to eviction—and violating procedural requirements can result in the decision being overturned and compensation paid to the tenant.
That is why the management company or your representative must be well-versed in the rental laws of the province where your property is located. If you have hired a management company—make sure the contract clearly specifies responsibility for compliance with the RTA (Residential Tenancies Act).
Revoking a Power of Attorney: If Circumstances Have Changed
A power of attorney can be revoked at any time, as long as you are of sound mind. Revocation is formalized through a written revocation (Deed of Revocation / Notice of Revocation), which must be signed and notarized.
If you are abroad, the process is the same as for the initial execution: a notary in your country, an apostille, and a translation. The document is sent to your former agent—according to the law, the revocation takes effect from the moment the agent receives the notice. Without official notification, they formally have the right to continue acting on your behalf.
You must also notify in writing all institutions that were provided with a copy of the power of attorney: the bank, the Land Title Office, and the management company. If your power of attorney was registered in any provincial registry, the revocation must also be registered there.
Selling Real Estate from Abroad: What You Need to Know
If you’ve decided to sell Canadian real estate while abroad, you’ll need not only a properly executed power of attorney for sale but also compliance with the requirements of Section 116 of the Income Tax Act. A non-resident selling real estate is required to notify the CRA and file Form T2062 to obtain a Certificate of Compliance.
Without this certificate, the buyer’s lawyer is legally required to withhold 25% to 50% of the sale proceeds as security—and these funds will be frozen until the CRA’s review is complete. It’s best to apply for the certificate well in advance—several months before the expected closing of the transaction—as the process can take a long time.
Common Mistakes and How to Avoid Them
Putting things off until “later.” The biggest mistake is planning to execute a power of attorney or negotiate with the management company only after you’ve left. Doing this from abroad is more difficult, more expensive, and takes longer.
Appointing a non-resident of Canada as your representative. This may seem convenient (a relative in Ukraine, for example), but in practice, a non-resident will be unable to perform a number of banking and legal actions that require the physical presence of a resident.
Failing to notify the CRA of a change in status. If you have become a non-resident but your tenant continues to transfer 100% of the rent to you without withholding 25%, you are both breaking the law. The tenant risks having to pay your tax plus penalties.
Assuming that the property manager automatically handles all tax responsibilities. The management company assists with withholding and remitting NR tax and may prepare the NR4 form, but the ultimate responsibility for filing the Section 216 return remains with you as the owner. Penalties from the CRA will be issued in your name, not the company’s.
Obtain a single power of attorney for multiple provinces. If you own property in different provinces, a single document may not be sufficient.