NR6 Application: How to Reduce 25% Withholding on Canadian Rental Income (2026)

The NR6 (Undertaking to File a Canadian Income Tax Return by a Non-Resident Receiving Rent from Real or Immovable Property or Receiving a Timber Royalty) is a CRA form that allows a non-resident landlord to reduce the Part XIII withholding on Canadian rental income from 25% of gross rent to a rate based on estimated net income.

Part XIII withholding without NR6:your agent (property manager) is the “withholding agent” under the Income Tax Act. They must withhold 25% of every gross rent payment and remit it to CRA by the 15th of the month following the month in which the rent was paid or credited. This is not optional — the agent is personally liable for unremitted amounts.

Part XIII withholding with NR6: once CRA approves the NR6, the agent may reduce monthly remittances to 25% of the estimated net income (gross rent minus allowable deductions like mortgage interest, property taxes, insurance, management fees, maintenance). On most properties, this reduces the monthly withholding by 50-70%.

Practical example:

• Monthly rent: $2,500
• Without NR6: 25% × $2,500 = $625/month remitted to CRA
• Estimated monthly expenses (mortgage interest, taxes, management): $1,600
• Estimated net income: $2,500 − $1,600 = $900/month
• With NR6: 25% × $900 = $225/month remitted to CRA
• Cash kept during the year: $400/month × 12 = $4,800 more in your pocket

These two forms are closely related but serve completely different purposes:

• NR6 — an advance application filed before the rental year begins. It requests CRA approval to reduce the ongoing Part XIII withholding. Filed by the landlord and the property manager together, before rent is collected.
• NR4 — a year-end information slipissued by the property manager after December 31. It reports the gross rent paid to the non-resident and the total Part XIII tax withheld during the year. It is the annual summary of what actually happened — not a request to change the rate.

Think of the NR6 as the planning form (filed before the year) and the NR4 as the reporting form (filed after the year). Both feed into the Section 216 return, which is the year-end Canadian tax return that reconciles actual rental income against actual withholding and determines whether you get a refund or owe additional tax.

This is the rule that trips up the most non-resident landlords: CRA must receive the NR6 application before the first rental payment of the year. For a January rental, that means CRA must have the form in hand before January 1.

CRA's position is clear: the NR6 cannot be applied retroactively to months that have already been paid. If your first rental payment is January 1, a January 15 NR6 application is too late for January — and CRA will not approve the NR6 effective January 1 if the form arrives after the fact. At best, it may be approved effective February 1.

What this means in practice:

• New landlords who become non-residents and want NR6 for year 1 must submit the form to CRA before the first rent is collected — often in November or December of the prior year.
• Returning landlords must re-submit the NR6 each year — approval from 2025 does not automatically carry over to 2026. Submit the renewal NR6 in November-December.
• If you miss the deadline, your agent must remit 25% of gross rent for the months before approval. You recover the over-withholding via the Section 216 return the following June.

CRA processing times for NR6 applications can run 4-8 weeks during peak periods (January-March). Submit in November-December to ensure approval before January 1 rent is due.

The NR6 requires signatures from both the non-resident landlord and the Canadian property manager (or agent):

• Part A — Non-resident landlord. Your name, address, SIN or ITN (Individual Tax Number), property address, and estimated rental income and expenses for the year.
• Part B — Canadian agent/property manager.The agent's name and address, undertaking to file a Section 216 return on behalf of the non-resident (or to ensure the non-resident files one), and signature.

What CRA needs to approve the NR6:

• Estimated annual gross rental income
• Estimated deductible expenses — mortgage interest, property tax, insurance, management fees, repairs, maintenance. CRA expects reasonable estimates; clearly inflated expense estimates will be questioned.
• Resulting estimated net income (or loss)

CRA issues an approval letter to both the landlord and the agent. The agent may then reduce monthly remittances to 25% of estimated net income — but may not reduce below zero even if net income is a loss.

Where to submit:mail or fax the NR6 to CRA's International Tax Services Office (ITSO) in Ottawa. The current fax number and mailing address are on the CRA NR6 form instructions. Do not submit to a local tax centre — ITSO handles all non-resident withholding matters.

Follow these steps to file the NR6 correctly:

1. Obtain the form.Download the current NR6 from the CRA website (search “NR6 CRA”). Use the current year's version — CRA updates the form periodically.
2. Complete Part A — your information. Enter your name, Canadian address (or foreign address with country), SIN or ITN, and the property address. Estimate your rental income and each category of deductible expense. Calculate the net income estimate. Sign and date.
3. Send to your property manager for Part B. The manager completes their section (name, business address, their undertaking to comply with Section 216 obligations) and signs. Both parties keep a copy.
4. Submit to CRA's International Tax Services Office. Mail or fax to ITSO. Keep your submission confirmation (fax confirmation or registered mail receipt). Submit no later than mid-November to allow 4-8 weeks processing before January 1.
5. Receive the CRA approval letter. CRA sends an approval letter specifying the approved withholding rate or net income estimate. Provide this to your property manager — they need it to justify the reduced remittances.
6. Property manager adjusts monthly remittances. From the first month covered by the approval, the agent remits 25% of net income (per the CRA approval) instead of 25% of gross rent.

If your NR6 is not approved before the first rental payment of the year, there is no workaround. Your property manager is legally required to continue remitting 25% of gross rent to CRA until the approval is in hand.

The property manager cannot reduce withholding based on a pending NR6. The approval letter from CRA is the trigger — not the date you submitted the application.

Recovery path: if you over-withheld for part of the year (or the entire year), you recover the excess by filing a Section 216 election return by June 30 of the following year. The Section 216 return calculates actual Canadian tax on actual net rental income — which is typically far less than 25% of gross rent — and CRA refunds the over-withholding. The downside: you wait until the following summer to recover cash that should have stayed with you during the year.

This is the rule that catches the most non-resident landlords by surprise: if CRA approved your NR6, you must file a Section 216 return by June 30 of the following year. This is not optional — it is a condition of the NR6 approval.

The Section 216 return is a standalone Canadian income tax return that calculates actual Canadian tax on your actual net rental income for the year (not the estimated income from the NR6). It reconciles:

• Total gross rent received
• Actual allowable deductions
• Net rental income (or loss)
• Canadian tax on that net income
• Total Part XIII withheld during the year (from your NR4)
• Refund (if withheld > tax) or balance owing (if tax > withheld)

What happens if you miss the June 30 deadline: CRA reassesses the full 25% Part XIII withholding as if the NR6 was never approved. The reduced withholding during the year becomes an under-remittance — you owe the difference (25% of gross rent minus what was actually remitted) plus interest. The advantage of the NR6 is completely lost, and you may also owe penalties for late filing.

Note: you can file the Section 216 return even without an NR6. If you remitted 25% of gross rent all year (no NR6 in place), the Section 216 return is still available to recover the excess withholding above actual net tax — the deadline in that case is 2 years after the end of the tax year(not June 30). The June 30 deadline is specific to the NR6 scenario.

For a complete walkthrough of the Section 216 return, see our Section 216 Election Complete Guide.

The NR6 approval is tied to the specific agent named on the form. If you change property managers during the year — or if your management company is acquired or changes its legal name — the existing NR6 no longer applies to the new agent.

What the new property manager must do: withhold 25% of gross rent from the date they begin managing the property, until CRA approves a new (or amended) NR6 naming the new agent. The new NR6 application must be submitted immediately — but approval may take several weeks, during which the full 25% rate applies.

Practical consequence:if you are considering a property manager change, plan the timing to avoid mid-year disruption. A change effective January 1 is cleaner — the outgoing agent's NR6 ends December 31, the new agent's NR6 is submitted in November-December and ideally approved before January 1.

The NR6 errors that cost non-resident landlords the most:

1. Submitting the NR6 in January for a January rental. The application arrives after the first payment — CRA cannot approve it retroactively. Result: 25% gross withholding for January (at minimum). Submit in November or December.
2. Forgetting to renew the NR6 each year. The approval is for one tax year only. It does not roll forward automatically. If you do not re-submit in November-December, you lose the benefit for the new year.
3. Missing the Section 216 June 30 deadline. The single most costly mistake — CRA reassesses the full 25% for the year, eliminating all NR6 savings. Set a calendar reminder: Section 216 return by June 30 every year you have an NR6.
4. Changing property managers without updating the NR6. The new manager is required to withhold 25% until they have their own CRA approval. Mid-year manager changes without proper NR6 coordination create gaps in coverage.
5. Using unrealistic expense estimates. CRA reviews the estimated net income on the NR6 and may reject applications where expenses appear inflated. Use defensible, documented estimates based on actual prior-year expenses or management agreements.

BorderBird tracks monthly NR4 withholding activity, flags the Section 216 June 30 deadline, and helps you document rental income and expenses for the NR6 expense estimate. Try BorderBird free.