Glossary
Part XIII tax
Part XIII of the Income Tax Act
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 (the rate can be reduced via NR6 / Section 216).
Key facts
- Rate
- 25%
- Applied to
- Gross rent (before expenses)
- Remit by
- 15th of the month after payment
- Reduce it with
- NR6 (in-year) or Section 216 (after year-end)
How it works
- The payer withholds 25% of each gross rent payment and remits it to CRA by the 15th of the following month.
- It ignores expenses entirely — which is why most landlords pay far more than their real tax up front.
- An NR6 lowers the in-year rate to 25% of net; a Section 216 return recovers the over-withholding afterward.
Related terms
NR4
The 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.
NR6
An 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.
Section 216
An 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.
Frequently asked questions
Is Part XIII tax 25% of gross or net rent?
By default it is 25% of gross rent, before any expenses. Only an approved NR6 lets the agent withhold on net rent instead; otherwise a Section 216 return recovers the excess after year-end.
When must Part XIII tax be remitted?
By the 15th of the month following the month in which the rent was paid or credited to the non-resident. Late remittance triggers CRA penalties and interest.
This definition is general information, not tax advice. See the full guide above and verify current rules with the CRA or IRS. ← Back to the glossary
BorderBird helps cross-border landlords track rent and prepare CRA NR4 and IRS Schedule E filings — see how it works.