Built for Americans who own Canadian rental property.
If you live in the US and rent out a property in Toronto, Vancouver, Montreal or anywhere else in Canada, you face Part XIII withholding, Section 216 elections, and US Schedule E reporting. BorderBird makes the workflow tractable — set up in 5 minutes, AI does the rest.
In short: A non-resident who owns Canadian rental property faces a default 25% Part XIII withholding on gross rent, remitted monthly by the payer. Filing a Section 216 return elects tax on net rental income instead — usually a refund — and an NR6 (filed before the year) applies that lower rate in-year. US owners also report the same rent on Schedule E with Form 1040 and claim a Form 1116 foreign tax credit to avoid double taxation.
By Emanuel — Founder, BorderBird · Updated June 2026
Create account, set up forwarding, add a property, add a tenant, forward your first email. Five steps, about a minute each.
Forward your payment and utility-bill emails — one filter, set once — and BorderBird auto-matches each to the right property and tenant, dated and queued for one-click import. It never connects to your inbox.
Years of payments in Gmail, Yahoo, Outlook, or Apple Mail? Forward them to your private BorderBird address and BorderBird imports them with their original dates.
Upload a signed lease PDF — AI pulls dates, rent, and tenant names. Renewals, vacates, and full tenancy history stay organized.
Your tax obligations
Any payer (your tenant or property manager) who pays rent to a non-resident of Canada must withhold 25% of gross rent each month and remit it to CRA. Failure to withhold makes the payer personally liable. This is the default; Section 216 lets you reduce it.
By filing a Section 216 return, you elect to be taxed on net rental income (after expenses) instead of the flat 25% on gross rent. In most cases the net-income tax is much lower than the withheld amount, so you receive a refund from CRA — usually within 90 days of filing.
If you file an NR6 form before the tax year, your withholding agent can withhold 25% on net rent (rent minus expected expenses) instead of gross rent. This avoids waiting a year for the Section 216 refund — your monthly withholding more closely matches your actual tax owed.
As a US person, the IRS taxes your worldwide income, including rental income from Canada. You report Canadian rental income on Schedule E attached to your 1040 — converted to USD using the Treasury yearly average exchange rate or another reasonable method.
After paying Canadian tax (via Section 216 or Part XIII withholding), you claim a foreign tax credit on Form 1116 against your US tax liability. The credit prevents double taxation under the Canada-US Tax Treaty.
If your Canadian rental property generates rent into a Canadian bank account, the year-end balance counts toward the FBAR $10,000 USD aggregate threshold. Filed annually with FinCEN, separately from your tax return.
How BorderBird helps
- Monthly Part XIII tracking. The Remittances page shows your withholding obligation in real time using the 15th-of-month rule, so you can verify your property manager is remitting correctly.
- Section 216 supporting data. Year-end T776 export gives your accountant gross rent, deductible expenses, and net rental income — the inputs Section 216 needs.
- Foreign Tax Credit calculation. Total Canadian tax paid (via Part XIII or Section 216) flows to your Form 1116 worksheet for US side.
- Schedule E in USD.Canadian rent and expenses converted at the year's annual average rate, mapped to Schedule E lines, ready for your 1040.
- State-specific guides. Read the guide for your state-province combination — Florida→Ontario, California→BC, and more.