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 term links to its full definition, guide, and calculator.
NR4
NR4 slip / CRA guide T4061The Canadian information slip a payer or agent files each year to report gross rent paid to a non-resident and the Part XIII tax withheld on it. Due March 31.
Who it applies to: A non-resident who owns Canadian rental property (filed by their Canadian agent).
NR6
NR6 undertakingAn application by a non-resident landlord and their agent to withhold Part XIII tax on NET rent instead of 25% of gross. Must be approved before the year.
Who it applies to: Non-residents whose expenses make 25%-of-gross withholding far more than their real tax.
Part XIII tax
Part XIII of the Income Tax ActCanada's flat 25% withholding tax on certain amounts paid to non-residents, including gross rent. Remitted by the payer by the 15th of the next month.
Who it applies to: Every non-resident receiving Canadian rental income (the rate can be reduced via NR6 / Section 216).
Section 216
§216 electionAn election that lets a non-resident landlord be taxed on NET rental income at graduated rates instead of 25% of gross — usually producing a refund.
Who it applies to: Non-residents who had 25% withheld but have deductible expenses (mortgage interest, property tax, etc.).
T1135
Foreign Income Verification StatementThe form Canadian residents file to report specified foreign property — such as a US rental — when its total cost exceeds C$100,000 at any point in the year.
Who it applies to: Canadian residents who own US (or other foreign) rental property over the C$100,000 cost threshold.
FBAR
FinCEN Form 114A US Treasury (FinCEN) report of foreign financial accounts, required of US persons whose foreign accounts exceed US$10,000 in aggregate at any time in the year.
Who it applies to: US persons (including US citizens living in Canada) with non-US bank/financial accounts over US$10,000.
FIRPTA
Foreign Investment in Real Property Tax ActA US withholding on the sale of US real property by a foreign person — generally 15% of the gross sale price, remitted to the IRS at closing. Not a final tax.
Who it applies to: A non-resident (e.g., a Canadian) selling US rental property.
Schedule E
Form 1040 / 1040-NR Schedule EThe IRS form for reporting supplemental income and loss, including rental real estate — where a Canadian reports a US rental's income and expenses.
Who it applies to: Canadians (and others) reporting US rental income to the IRS.
T776
Statement of Real Estate Rentals (CRA form T776)The CRA form that reports a Canadian rental's gross income and expenses to arrive at net rental income or loss. Filed with a T1 return — or with a Section 216 return by a non-resident taxed on net.
Who it applies to: Anyone reporting Canadian rental income — including a non-resident filing a Section 216 return.
NR7-R
Application for Refund of Part XIII Tax (CRA form NR7-R)The CRA form a non-resident uses to recover Part XIII tax that was over-withheld or withheld in error on Canadian income such as rent. Filed within two years of the year the tax was remitted.
Who it applies to: A non-resident (or their Canadian agent) who had too much Part XIII tax withheld on Canadian income.
W-8ECI
Certificate of Foreign Person's Claim of Effectively Connected Income (IRS form W-8ECI)The IRS form a non-US owner gives a US tenant or property manager to stop the default 30% withholding on gross US rent — so the rental is taxed on net income via a 1040-NR instead.
Who it applies to: A non-US owner of US rental property (e.g., a Canadian) who elects to be taxed on net rental income.
1040-NR
U.S. Nonresident Alien Income Tax Return (IRS Form 1040-NR)The US income tax return a non-resident files to report US-source income taxed on a net basis — including rental income reported on Schedule E. Generally due April 15, or June 15 with no US wages.
Who it applies to: A non-US person (e.g., a Canadian) with US rental or other effectively connected income.
ITIN
Individual Taxpayer Identification Number (IRS)A US tax ID the IRS issues to people who must file or be reported to the IRS but can't get an SSN — including non-US landlords who file a 1040-NR or provide a W-8ECI.
Who it applies to: A non-US person with a US tax filing or reporting obligation and no SSN.
T1159
Income Tax Return for Electing Under Section 216 (CRA)The CRA return a non-resident files to report Canadian rental income on a net basis under Section 216 — recovering Part XIII tax that was withheld on the gross rent.
Who it applies to: A non-resident who owns Canadian rental property and elects under Section 216.
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.