Before the rental year — set withholding up correctly
Confirm your non-resident status for the year
If you are a non-resident of Canada for tax purposes and receive Canadian rent, Part XIII withholding applies. Residency is about ties to Canada, not citizenship.
Appoint a Canadian resident agent
A non-resident generally needs a Canadian agent to receive the rent, withhold and remit the tax, and file the NR4 (ITA 215(3)). Without an agent, an individual tenant paying directly for the home they live in does NOT withhold — ITA 215(1.2)–(1.3), retroactive to August 12, 2024, makes the non-resident landlord remit the 25% to CRA instead, with no NR4 issued.
Choose the withholding basis: 25% of gross (default) vs. net under NR6
Default is 25% of gross rent. If your expenses are significant (mortgage interest, property tax, etc.), the NR6 net-basis route ties up far less cash during the year.
If electing net basis: file Form NR6 before the year begins
The NR6 (signed by you and your agent) must be approved by the CRA before the first rent payment of the year. Approval lets the agent withhold 25% on NET income instead of gross — and commits you to filing a Section 216 return.
Register a CRA non-resident (NR) account / program account for remittances
Needed so the agent can remit the Part XIII tax against the correct account and later file the NR4 information return.
Every month — withhold and remit Part XIII
Withhold the correct amount from each rent payment
25% of GROSS rent by default; 25% of NET rent only if an NR6 was approved for the year.
Remit to the CRA by the 15th of the following month
Part XIII tax withheld on rent paid or credited in a month is due by the 15th of the next month. Late remittance triggers penalties and interest.
Record gross rent, deductible expenses, and tax withheld
Keep month-by-month records — they feed both the NR4 (gross + tax) and the Section 216 return (net income).
Keep proof of every remittance
Remittance confirmations reconcile to the NR4 Summary and protect you in a CRA review.
After year-end — file the NR4 (due March 31)
Prepare the NR4 slip — gross rent + Part XIII tax withheld
Report the gross rental income paid or credited to the non-resident and the non-resident tax withheld, using the correct currency and income/exemption codes per CRA guide T4061.
Prepare the NR4 Summary (totals across all slips)
The Summary totals the amounts reported on the slips and must reconcile to what was actually remitted during the year.
File the NR4 information return with the CRA by March 31
Both the slips and the Summary are due by March 31 following the calendar year. This deadline does not move with the personal-tax deadline.
Give the non-resident their copy of the NR4 slip
They need it to prepare their Section 216 return and to claim foreign tax credit in their country of residence.
Section 216 return — recover over-withheld tax
Decide whether to file a Section 216 return
If 25% of gross was withheld but your net income is much lower (after expenses), a Section 216 return reports net income at graduated rates and usually produces a refund.
Gather deductible expenses
Mortgage interest (not principal), property tax, insurance, repairs and maintenance, property-management fees, utilities you pay, condo/strata fees, and allowable CCA (depreciation — optional; weigh recapture on sale).
File within the deadline that applies to you
With an approved NR6: the Section 216 return is due within 6 months of year-end (June 30). Without an NR6 (electing to recover over-withheld 25% gross tax): generally within 2 years of the end of the year.
Reconcile tax withheld vs. tax owed on net income
The Part XIII tax already remitted is credited against the Section 216 tax; the difference is your refund (or balance owing).
Documents to gather and keep (6+ years)
Lease agreement(s) and rent records (gross, by month)
NR6 approval letter from the CRA (if you elected net basis)
Part XIII remittance confirmations (every month)
Expense receipts and invoices (interest, tax, insurance, repairs, management)
Mortgage year-end statement (interest vs. principal split)
NR4 slips and NR4 Summary filed
Section 216 return(s) and notices of assessment
Agent agreement / authorization
BorderBird year-end export (if using)
Common mistakes to avoid
Withholding on net WITHOUT an approved NR6
You may only withhold on net once the CRA approves the NR6 for the year. Withholding net without approval is non-compliant and the agent can be assessed the shortfall.
Missing the 15th-of-the-month remittance
Part XIII penalties and interest accrue on late remittances even if you file the NR4 on time.
Missing the March 31 NR4 deadline
The NR4 information return has its own March 31 deadline, separate from any personal-tax deadline. Late NR4 slips carry per-slip penalties.
No Canadian agent in place
Assuming the tenant handles it. Since ITA 215(1.2)–(1.3), an individual tenant paying directly for their own residence does not withhold at all — the landlord must remit the 25% to CRA and keep their own records, since no NR4 is issued. Set up an agent relationship before the first rent payment if you want the normal withhold-remit-NR4 chain.
Leaving the Section 216 refund unclaimed
If you withheld 25% of gross and never file a Section 216 return, you forfeit the refund of tax you didn't actually owe (subject to the 2-year limit).
Treating rents as treaty-reduced
The Canada–US treaty does not reduce the 25% Part XIII rate on rental income — the relief route is the Section 216 election, not a treaty rate.