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How do I get the 25% non-resident withholding tax back?

File a Section 216 return. It is a separate elective Canadian return that taxes you on your net rental income at graduated rates rather than a flat 25% of gross, and the CRA refunds the excess withheld. Without an approved NR6 you have two years from the end of the year to file it; with one, the deadline shortens to June 30.

Who this applies to: Non-residents who have had Part XIII tax withheld on Canadian rent.

Key facts
Deadline (no NR6)
2 years from the end of the year
Deadline (NR6 approved)
June 30
Taxed on
Net rental income, graduated rates
Form
T1159

How it works

The gap between the two bases is usually large. On $20,000 of gross rent with $15,000 of allowable expenses, withholding on gross is $5,000 while the tax on $5,000 of net income at graduated rates is far lower — the difference comes back as a refund.

A Section 216 return is separate from any other Canadian return. If Canadian rental income is your only Canadian-source income, the Part XIII withholding is otherwise your final obligation and there is no T1.

If you own more than one Canadian rental property, all of them must be reported together on a single Section 216 return.

Where people get caught

A rental loss on a Section 216 return is stranded. You cannot use it to reduce income on any other Canadian return, you cannot carry it to a Section 216 return for another year, and you cannot bring a loss from another return into it. Claiming capital cost allowance will not help either — CCA cannot create or increase a rental loss.

Source: CRA Guide T4144, Income Tax Guide for Electing under Section 216.

Go deeper: CRA Part XIII remittance calculator

Terms used here

Section 216NR4Part XIII tax

Related questions

What is an NR6, and do I need one?
An NR6 lets your agent withhold 25% of net rent instead of gross. It fixes cash flow, and it makes the Section 216 return mandatory.
My tenant pays me rent directly. Do I still owe non-resident withholding tax?
Yes — and the legal obligation to withhold and remit sits with whoever pays you, which usually means your tenant.
Do I have to file a regular Canadian tax return as a non-resident landlord?
Usually not. If Canadian rent is your only Canadian income, the Part XIII withholding is your final obligation — the Section 216 is a separate, elective return.

Frequently asked questions

Is filing a Section 216 return mandatory?
Only if the CRA approved an NR6 for that year — then you must file, even with no tax payable and no refund expected. Otherwise it is elective: you file because it usually produces a refund.
How far back can I file a Section 216 return?
Generally two years from the end of the year in which the rent was paid or credited, where no NR6 was filed. Late filing outside that window means the election is not available for that year.

This is general information, not tax or legal advice. Rules change and your situation is specific — verify with the CRA or IRS, or with a cross-border advisor, before acting. ← All answers

BorderBird helps cross-border landlords track rent and prepare CRA NR4 and IRS Schedule E filings — see how it works.