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The short answer
Canada taxes its residents on world income, so rent from a Lagos property goes on your Canadian return in full, in Canadian dollars. The Nigerian tax you actually paid on that rent, whether withheld by a tenant at 10% or paid on assessment, is claimed as a foreign tax credit on Form T2209, capped at the Canadian tax on that same rent.
Why both countries tax the same rent
Nigeria taxes rent from property in Nigeria because the property is there. Article 6 of the Canada–Nigeria tax agreement confirms that income from immovable property may be taxed in the state where the property is situated. Canada taxes the same rent because you live in Canada: the CRA expects factual residents to report income from all sources, inside and outside Canada.
The agreement does not stop either country taxing; it decides who gives way. Under Article 23(1)(a), Canada deducts the Nigerian tax on Nigerian-source income from the Canadian tax on that income, subject to Canadian law. That deduction is the foreign tax credit.
Paying the Nigerian side correctly
Nigerian tax on rent usually reaches the tax authority in one of two ways.
- Withholding by the tenant. Under the Deduction of Tax at Source (Withholding) Regulations 2024, rent attracts withholding tax at 10% for resident and non-resident landlords alike, and everyone except individuals must deduct it. A company tenant pays you 90% and gives you a receipt or credit note for the 10%.
- Assessment. NiDCOM's diaspora guide to the 2026 tax reforms says a person with Nigerian rental income must file, with returns due by 31 March. Where the rent is from an individual tenant who does not deduct tax, or where the withholding is not final, the tax is settled on assessment.
NiDCOM's guide does not say whether the 10% on rent is a final tax for individuals. If it is not final, the amount withheld is a credit against your assessed liability, and the Nigerian tax that counts for Canada is the final figure after assessment, not simply what was withheld. Lagos income tax is administered by the Lagos State Internal Revenue Service; which authority assesses a non-resident landlord is covered in our guide to paying Lagos tax from Canada.
Claiming the credit on your Canadian return
Report the gross rent and your allowable expenses in Canadian dollars, converted at the Bank of Canada rate for the relevant date. Do not subtract the Nigerian tax as an expense. Then claim the credit federally on Form T2209 and the provincial credit on your provincial form (Form 428; in Quebec, TP-772-V). The CRA folio on the foreign tax credit sets the limits:
| Rule | What it means for Lagos rent |
|---|---|
| Credit is the lesser of foreign tax paid and Canadian tax on that income | If Canada's tax on the rent is lower than Nigeria's, the excess Nigerian tax is not credited. |
| Calculated country by country | Nigerian tax only offsets Canadian tax on Nigerian income. |
| Voluntary payments are not creditable | Tax you did not legally owe, or paid without being required to, does not count. |
| Foreign tax is converted at the same rate as the related income | Use the rate you used for the rent itself. |
| Unused non-business credit is not carried over | An excess in one year is lost for credit purposes. |
| Evidence required | A withholding slip or credit note, or your Nigerian return and receipts. |
Worked example (illustrative figures only)
An Ontario resident receives ₦4,800,000 rent from a Lagos flat let to a company. The tenant withholds 10%, ₦480,000. Allowable expenses (agent's fees, repairs) are ₦800,000. At an example rate of ₦1,000 to C$1, gross rent is C$4,800, expenses C$800, net rental income C$4,000, Nigerian tax C$480.
Suppose your combined federal and provincial tax on that extra C$4,000 works out at C$1,200 (an example; your own rate depends on your other income). The credit is the lesser of C$480 and C$1,200, so C$480. You pay the remaining C$720 to Canada. If instead the Canadian tax on that rent were only C$400, the credit would stop at C$400 and C$80 of Nigerian tax would be uncredited. That case is covered in when Nigerian tax is higher than Canadian tax.
Records that hold up if the CRA asks
- The tenancy agreement and rent receipts or bank statements showing what was paid.
- The withholding tax receipt or credit note from each company tenant, matched to the rent it covers.
- Your Nigerian tax return, assessment notice and payment receipts if the tax was assessed.
- Invoices for expenses you claim, and the exchange rates you used with their dates.
The CRA asks for records to be kept for six years from the end of the tax year they relate to. If the property cost more than $100,000, also check the T1135 rules in our guide to simplified or detailed reporting. Chasing missing credit notes from a Nigerian tenant is covered in the Nigeria library: getting your withholding tax credit notes back.
This is general information, not tax advice.
Where Pryme fits
Keeping rent in naira in the NGN balance of a Pryme account gives you one clean record of what each tenant paid and when. A verifiable statement generated through our partner VerifyDoc.ai (receipts and statements) can be checked by anyone as genuine and unaltered, which helps when you match rent to credit notes.
Questions people ask
Can I claim the 10% my Lagos tenant withheld against my Canadian tax?
Generally yes, as a foreign tax credit on T2209, limited to the Canadian tax on that rent. You need the withholding receipt or credit note, and if your final Nigerian liability is lower, only the final tax counts.
Do I subtract the Nigerian tax from my rental income in Canada?
No. Report gross rent and allowable expenses, then claim the Nigerian tax as a credit. The CRA tells you not to subtract foreign taxes from income.
What if my tenant is an individual and does not deduct tax?
The Withholding Regulations require everyone except individuals to deduct. Rent from an individual tenant is usually taxed on assessment in Nigeria, and you claim the assessed tax you paid.
Does the treaty stop Canada taxing my Lagos rent?
No. Article 6 lets Nigeria tax it and Article 23 has Canada give a credit for the Nigerian tax. Canada still taxes the rent.
Sources
- Canada–Nigeria tax agreement (signed Abuja, 4 Aug 1992), Global Affairs Canada treaty database · accessed Oct 2026
- CRA Income Tax Folio S5-F2-C1, Foreign Tax Credit (modified 31 Mar 2026) · accessed Oct 2026
- PwC Nigeria, Highlights of the Deduction of Tax at Source (Withholding) Regulations 2024 · accessed Oct 2026
- NiDCOM, NGEX Diaspora Guide to the Nigeria Tax Reforms 2026 (Jan 2026) · accessed Oct 2026
- CRA, Line 12100 – Interest and other investment income (modified 20 Jan 2026) · accessed Oct 2026
- CRA, Where to keep your records, for how long and how to request permission to destroy them early · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.