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My tenant pays me rent directly. Do I still owe non-resident withholding tax?

Yes. If you are a non-resident of Canada receiving rent on Canadian property, 25% of the gross rent must be withheld and remitted to the CRA by the 15th day of the month after the rent is paid or credited. The obligation falls on the payer — which, if your tenant transfers rent straight to you, means your tenant is legally the withholding agent, whether or not they know it.

Who this applies to: Non-residents of Canada who own Canadian rental property.

Key facts
Rate
25% of gross rent
Remit by
15th of the following month
Who remits
The payer or Canadian resident agent
Slip
NR4, due March 31

How it works

The withholding is on gross rent, not profit. Mortgage interest, property tax, condo fees and insurance do not reduce the amount withheld at source — they only matter later, on a Section 216 return.

Because most tenants have never heard of Part XIII, non-resident owners normally appoint a Canadian resident agent instead: a property manager, an accountant, or a family member. The agent takes on the withholding and remitting, and files the NR4 slip and summary by March 31.

If nothing is remitted, the CRA charges compound daily interest on the amount that should have been withheld, and may also charge a penalty.

Where people get caught

The agent is not doing you an administrative favour — under ITA s.215(6) a payer who fails to withhold becomes personally liable for the full amount, plus interest and penalties. Before you ask a sibling to be your agent, make sure they understand that, and set up an automatic monthly remittance so it cannot simply be forgotten.

Source: CRA Guide T4144, Income Tax Guide for Electing under Section 216; ITA s.215(6).

Go deeper: CRA Part XIII remittance calculator

Terms used here

Part XIII taxNR4NR6

Related questions

Who can act as my Canadian withholding agent?
Any Canadian resident. But the agent is personally liable for withholding that does not happen, so this is not a small favour to ask.
How do I get the 25% non-resident withholding tax back?
File a Section 216 return. It taxes you on net rental income at graduated rates and the CRA refunds the difference.
Nobody ever withheld the 25% on my Canadian rental. How bad is it?
Fixable, and often smaller than it looks once the Section 216 returns are filed. Come forward before the CRA contacts you.

Frequently asked questions

Can I just remit the 25% myself instead of my tenant?
In practice non-residents often arrange for a Canadian resident agent to remit on their behalf, and that is the route the CRA's guidance describes. The statutory obligation still sits with the payer, so the cleanest arrangement is a named Canadian agent rather than an informal one.
Does the 25% apply if my rental runs at a loss?
Yes, at source. Withholding is on gross rent regardless of whether the property is profitable. A loss is only recognised when you file a Section 216 return, which is also how you recover the over-withheld amount.

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.