Cross-Border Landlord Tax Glossary
The terms a cross-border landlord actually runs into — defined in plain language. If you own Canadian property as a non-resident, you'll meet NR4, NR6, Part XIII, and Section 216. If you're a Canadian who owns a US rental, it's Schedule E, T1135, and FIRPTA. Each definition below links to the full guide or calculator.
NR4
NR4 slip / T4061An NR4 is the Canadian information slip a payer or agent files to report amounts paid or credited to a non-resident — including gross rent and the Part XIII tax withheld on it. It is filed every year, and both the slip and the NR4 summary are due by March 31 following the calendar year.
Who it applies to: A non-resident who owns Canadian rental property (via their Canadian agent).
NR4 filing guide →NR6
An NR6 is an application by a non-resident landlord and their Canadian agent to have Part XIII tax withheld on the NET rental income (rent minus expenses) instead of 25% of the gross. It must be approved by the CRA before the rental year, and it commits the agent to filing a Section 216 return.
Who it applies to: Non-residents whose expenses make 25%-of-gross withholding far more than their real tax.
NR6 explained →Part XIII tax
Part XIII of Canada's Income Tax Act imposes a flat 25% withholding tax on certain amounts paid to non-residents of Canada, including gross rent. The Canadian payer or agent must withhold the tax and remit it to the CRA by the 15th of the month after the rent is paid or credited.
Who it applies to: Every non-resident receiving Canadian rental income (rate may be reduced by an NR6/Section 216).
CRA remittance calculator →Section 216
§216 electionA Section 216 election lets a non-resident landlord file a Canadian tax return on their NET rental income — deducting expenses and paying tax at graduated rates — instead of the flat 25% on gross. Because 25% of gross is usually more than the real tax owed, electing often produces a refund.
Who it applies to: Non-residents who had 25% withheld but have deductible expenses.
Section 216 calculator →T1135
Foreign Income Verification StatementT1135 is the form Canadian residents file to report specified foreign property — such as a US rental — when its total cost amount exceeds C$100,000 at any point in the year. It is a disclosure form, not a tax; missing it carries steep penalties even when no tax is owed.
Who it applies to: Canadian residents who own US (or other foreign) rental property over the C$100,000 cost threshold.
T1135 guide →FBAR
FinCEN Form 114An FBAR is a US Treasury (FinCEN) report of foreign financial accounts, required of US persons whose foreign accounts exceed US$10,000 in aggregate at any time during the year. It reports accounts, not real estate, and is filed separately from the income tax return.
Who it applies to: US persons (including US citizens living in Canada) with non-US bank/financial accounts over US$10,000.
FBAR for cross-border owners →FIRPTA
Foreign Investment in Real Property Tax ActFIRPTA requires the buyer of US real property from a foreign person to withhold tax — generally 15% of the gross sale price — and remit it to the IRS at closing. It is a withholding on the sale, not a final tax: the seller files a US return and credits or refunds it against the actual gain.
Who it applies to: A non-resident (e.g., a Canadian) selling US rental property.
FIRPTA withholding guide →Schedule E
Form 1040 / 1040-NR Schedule ESchedule E is the IRS form for reporting supplemental income and loss, including rental real estate. A Canadian who owns a US rental reports the property's US income and expenses on Schedule E, attached to a Form 1040-NR (or 1040 for a US person).
Who it applies to: Canadians (and others) reporting US rental income to the IRS.
Filing Form 1040-NR →
Frequently asked questions
Do I have to file an NR4 every year?
Yes. If you are a non-resident receiving Canadian rental income, an NR4 slip and summary reporting the gross rent and Part XIII tax withheld are due each year by March 31 for the prior calendar year — filed by your Canadian agent.
What is the difference between an NR6 and a Section 216 election?
An NR6 is approved before the year and lets your agent withhold 25% on net rent instead of gross during the year. A Section 216 return is filed after the year to report net rental income and reconcile the tax — often producing a refund. Filing an NR6 commits you to filing the Section 216 return.
Does a non-resident landlord pay 25% tax on rent forever?
No. The 25% Part XIII withholding is on gross rent, but a non-resident can elect under Section 216 to be taxed on net income at graduated rates. Because expenses usually bring the real tax well below 25% of gross, the election commonly results in a refund.
I'm a Canadian who owns a US rental — which of these apply to me?
Typically Schedule E (to report the US rental income to the IRS on a 1040-NR), T1135 (if the property's cost exceeds C$100,000, reported to the CRA), and FIRPTA (15% withheld when you eventually sell). NR4, NR6, Part XIII, and Section 216 apply the other direction — to non-residents who own Canadian property.
This glossary is general information, not tax advice. BorderBird helps cross-border landlords track rent and prepare CRA NR4 and IRS Schedule E filings — see how it works.