Filing and reporting requirements

When you receive rental income from real property in Canada, the payer, such as the tenant or a property manager, has to withhold non-resident tax at the rate of 25% on the gross rental income paid or credited to you. The payer has to send the tax to the CRA on or before the 15th day of the month following the month the rental income is paid or credited to you.

The payer has to give you 2 copies of an NR4 slip showing the gross amount of rental income paid or credited to you during the year, and the amount of non-resident tax withheld. The payer also has to send us an NR4 return, as explained in Guide T4061, NR4 - Non Resident Tax Withholding, Remitting, and Reporting.

Generally, the non-resident tax withheld is considered your final tax obligation to Canada on the rental income. However, if you elect under section 216 of the Income Tax Act, you may pay less tax, and you may also receive a refund of some or all of the non-resident tax withheld. For more information, see Guide T4144, Income Tax Guide for Electing Under Section 216.

If you intend to elect under section 216, you may also want to consider having non-resident tax withheld on the net rental income instead of the gross amount. To do this, you and your agent (a resident of Canada who acts on your behalf regarding your Canadian rental income) have to complete Form NR6, Undertaking to File an Income Tax Return by a Non Resident Receiving Rent From Real Property or Receiving a Timber Royalty, and send it to us for approval. If we approve your Form NR6, your agent has to withhold non-resident tax at the rate of 25% on your net rental income (the difference between the rental income paid or credited to you and the rental expenses you have paid). Your agent must send us the tax on or before the 15th day of the month following the month the rental income is paid or credited to you. If we approve your Form NR6 for a certain year, you must also file a section 216 income tax return for that year, even if you have no tax payable or you are not expecting a refund.

You should send us Form NR6 on or before January 1 of each year, or before the first rental payment is due. For more information, read the Important reminder about Form NR6, and see Guide T4144.

Forms and publications

• Guide T4144, Income Tax Guide for Electing Under Section 216
• Form T1159, Income Tax Return for Electing Under Section 216
• Form NR6, Undertaking to File an Income Tax Return by a Non-Resident Receiving Rent from Real Property or Receiving a Timber Royalty

Related Topics

• Rental income
• Non-residents of Canada