Canadian owning a US rental: tax checklist

1. Get a US tax ID (ITIN) if you need one^1,2

If you must file a US return and you do not have (and are not eligible for) a Social Security Number, you generally need an ITIN. Apply with Form W-7.

Typical trigger for landlords: filing Form 1040-NR, or certain withholding / FIRPTA situations. Do not invent an ITIN “just in case” before you have a valid reason — the IRS denies applications without a qualifying exception. (verify with your preparer which W-7 exception applies to you.)

2. US withholding on rent: 30% of gross vs. net election^3,4,5,6,7

Default rule. US-source rental income paid to a nonresident alien is generally FDAP income taxed at 30% of gross rent (or a lower treaty rate if one applies — Canada–US treaty Article VI allows the US to tax US real property income; it does not give a reduced withholding rate for ordinary rent). The payer (tenant or manager) is often the withholding agent.

The better path for most landlords: IRC §871(d) election. You can elect to treat US real property income as effectively connected with a US trade or business. Then you deduct ordinary expenses and pay graduated tax on net income instead of 30% of gross.

How the election is made: attach the required statement to a timely Form 1040-NR (see Treas. Reg. §1.871-10). Give the payer a valid Form W-8ECI so they stop the 30% withholding. The election stays in effect until properly revoked.

3. File Form 1040-NR + Schedule E^8,9,10

Report the rental on Schedule E and file it with Form 1040-NR.

Due date (calendar-year individual, no US wages subject to withholding): June 15 of the following year (e.g. a 2025 return → June 15, 2026). If you did receive US wages subject to withholding, the earlier April 15 date applies.

4. State income tax return¹¹

Florida: Florida does not impose a personal income tax on individuals, so there is generally no Florida personal income-tax return for rent alone.

Other states: If the property is in a state that taxes nonresident rental income (e.g. California, New York, many others), you may owe a state nonresident return on top of the federal 1040-NR. Rules and due dates differ by state — verify for your property’s state before assuming “Florida rules apply everywhere.”

5. FBAR (FinCEN 114) — usually does not apply to Canadians^12,13

FBAR (Report of Foreign Bank and Financial Accounts, FinCEN Form 114) is required of a United States person who has a financial interest in, or signature authority over, foreign financial accounts whose aggregate value exceeded US$10,000 at any time during the year.

A United States person for FBAR means a US citizen, US resident, or a US-organized entity/trust/estate — not “anyone who owns US real estate.”

So a Canadian resident who is not a US citizen or US tax resident generally does not file an FBAR merely because they own a US condo or receive US rent.

A dual citizen or US person living in Canada may have to file (and Canadian bank accounts can count as “foreign” for them).

6. Canadian side: T1 + T776 (report worldwide income)¹⁴

Canadian residents report worldwide income on the T1. US rental income and expenses go on Form T776, Statement of Real Estate Rentals, then into the T1.

Typical T1 due date for individuals: April 30 of the following year (self-employed often get to June 15 for filing — verify your situation; balances owing are still generally due April 30).

7. Foreign tax credit (T2209 / Line 40500)¹⁵

US tax you paid on the same rental income can often be claimed as a federal foreign tax credit in Canada so you are not taxed twice on the same dollars. Use Form T2209 / Line 40500. Provincial treatment can differ — verify.

8. T1135 if specified foreign property cost > C$100,000^16,17

File Form T1135 if the total cost amount of your specified foreign property exceeded C$100,000 at any time in the year. The threshold is cost, not market value.

Does a US rental count? Yes, in the usual case. CRA’s T1135 instructions say to report real property outside Canada other than property used in an active business or used primarily for personal use, and they explicitly say: “Rental property outside Canada should be included in this category.” A Florida condo rented with a reasonable expectation of profit is generally reportable; a pure personal-use vacation home generally is not.

Note: Property used exclusively in an active business is excluded. Ordinary residential rentals are still listed as reportable rental property on T1135 — do not assume the active-business exclusion covers a typical buy-to-let. If your facts are unusual (e.g. an operating company warehouse), verify.

9. Exchange rate (Bank of Canada)^18,14

Convert USD rents and expenses to CAD for the T776 / T1. CRA generally accepts a consistent method. Many landlords use the Bank of Canada annual average rate for the tax year when rents are regular; daily rates for specific transaction dates are another common choice. Pick one method and apply it consistently. Verify with your preparer for large one-off items (purchase, sale, big repairs).

10. Selling the US property: FIRPTA withholding + tax returns both sides^19,20

When a foreign person disposes of a US real property interest, the buyer generally must withhold 15% of the amount realized under FIRPTA (IRC §1445), unless an exception or an IRS withholding certificate applies. Withheld tax is reported on Forms 8288 / 8288-A. You still report the actual gain on your US return (and on your Canadian return, with foreign tax credit rules).

Part XIII tax — 25% of gross rent²¹

25% of gross rent is the default non-resident withholding on Canadian-source rent, remitted by the payer or agent.

Form NR6²²

An optional undertaking so the agent can withhold on net rental income instead of 25% of gross. CRA must approve it in writing; file before the first rent of the year where possible.

NR4 slips and summary²³

The Canadian payer generally files by March 31.

Section 216 return²⁴

Elect to be taxed on net Canadian rental income. If CRA approved your NR6, file by June 30 of the following year. Without NR6, the refund election window is longer (generally within two years) — see CRA’s “When to file.”