Business vs. Property Income

Why the distinction of these two types of income is important: 1. For non-resident, business income is subject to Part I tax. While property income is subject to withholding tax under Part XIII. in other words, you will get money net of certain percentage witheld by distributing parties. 2. rate are different - property income attracts relatively higher tax than business income. However, part of the tax for property income (investment income) paid by a private corporation is refundable if certain conditions are met. 3. For individual, property income does not qualify as "earned income" to be included as basis to calculate your RRSP contribution. ie. less contribution limit will be derived from your income basis if certain portion is of property income in nature.