Dwelling Located in a Designated Remote Area (Prescribed Zone)

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If you provide housing or utilities (like heating, electricity, water or household refuse collection) to an employee who lives in a designated remote area (prescribed zone), the employee receives a taxable benefit.

Include the value of the benefit in boxes A and V and in box G or box I of the employee's RL-1 slip (see courtesy translation RL-1-T). See Benefit Provided to an Employee to find out how a benefit in kind should be treated.

Note

The value of the taxable benefit varies depending on whether or not there is an established housing market in the prescribed zone.

Presence of an established housing market in the prescribed zone

If there is an established housing market in the prescribed zone where the employee lives, the value of the benefit related to the housing or utilities you provide the employee corresponds to the fair market value (FMV) of the housing or the FMV of the public utilities, including the GST and QST.

No established housing market in the prescribed zone

If there is no established housing market in the prescribed zone where the employee lives, we consider that the value of the benefit related to housing varies depending on whether or not you are the owner of the property.

You must determine the value of the housing and the value of the utilities separately.

You own the property

If you are the owner of the property you provide to the employee, the value of the housing benefit is calculated as follows:

  • the lower of the following amounts:
    • the FMV of the housing or utilities,
    • the ceiling amount for housing benefits;

minus

  • the rent or costs of utilities paid or reimbursed by the employee.

You rent the property

If you rent the property you provide to the employee, the value of the housing benefit is calculated as follows:

  • the lower of the following amounts:
    • the rent or value of the utilities you pay,
    • the ceiling amount for housing benefits;

minus

  • the rent or costs of utilities paid or reimbursed by the employee.

Ceiling amount for housing benefits

The ceiling amount for housing benefits is the maximum amount you can include in an employee's income if the employee does not pay any expenses related to housing or utilities.

The following table shows the monthly ceiling for housing benefits (including GST and QST) for the years 2019 and 2020, by type of housing and utilities.

Monthly ceiling for housing benefits
Type of housing Description of services 2019 2020
Common shelter N/A $198 $203
Apartment and duplex Rent only $534 $547
Utilities only $260 $266
Rent and utilities $794 $813
House and trailer Rent only $893 $916
Utilities only $395 $405
Rent and utilities $1,289 $1,320

For more information, refer to publication RC4054, Ceiling Amounts for Housing Benefits Paid in Prescribed Zones, on the Government of Canada website.

Note

An employee who lives in a prescribed northern zone or a prescribed intermediate zone for a period of at least six consecutive months beginning and ending in the year can request a reduction in source deductions of income tax by claiming the housing deduction in form TP-1015.3-V, Source Deductions Return.

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