If you own rental property in Canada but live abroad, there's a good chance you're paying more tax than you need to. The NR6 form is how you fix that. This guide explains everything in plain English—no accounting degree required.
The 30-Second Summary
Without NR6, Canada takes 25% of your gross rent. With NR6, they only take 25% of your net income (after expenses). For most landlords, that's a difference of thousands of dollars per year.
What is the NR6 Form?
The NR6 (officially called "Undertaking to File an Income Tax Return by a Non-Resident Receiving Rent from Real or Immovable Property or Receiving a Timber Royalty") is a form you submit to the Canada Revenue Agency (CRA) to reduce the amount of tax withheld from your rental income.
In simple terms: it's your promise to CRA that you'll file a proper tax return later, in exchange for paying less withholding tax now.
Who Needs to File NR6?
You should file an NR6 if all of these apply to you:
- You're a non-resident of Canada for tax purposes
- You own rental property in Canada (house, condo, Airbnb, etc.)
- You have deductible expenses (mortgage interest, property tax, repairs, etc.)
- You want to reduce your withholding tax
What Happens If You Don't File NR6?
Without an approved NR6, your property manager (or tenant, if they pay you directly) is legally required to:
Without NR6:
- • Withhold 25% of gross rent (not net—gross!)
- • Send that money to CRA every month
- • You get what's left over
Let's put real numbers to this. Say you collect $3,000/month in rent ($36,000/year), but you have $20,000 in expenses:
❌ Without NR6
- Gross rent: $36,000
- 25% withholding: -$9,000
- You receive: $27,000
✓ With NR6
- Gross rent: $36,000
- Expenses: -$20,000
- Net income: $16,000
- 25% withholding: -$4,000
- You receive: $32,000
Annual Difference
$5,000 more in your pocket
Common Myths About NR6
"My accountant handles this automatically"
No. NR6 must be filed before you receive rental income. Many accountants only deal with year-end returns. You need to proactively request NR6 filing.
"I'll just get a refund at tax time"
Technically possible via Section 216, but you'll wait 12+ months for your money. NR6 gives you better cash flow throughout the year.
"NR6 is only for big landlords"
Wrong. Even one property benefits from NR6. The savings percentage is often higher for single-property owners with significant expenses.
NR6 Requirements: What You Need
To file NR6, you'll need:
- Property address in Canada
- Estimated rental income for the year
- Estimated expenses (mortgage interest, property tax, insurance, repairs, condo fees, management fees)
- A Canadian agent — a Canadian resident who agrees to act on your behalf (required by CRA)
- Your signature and your agent's signature
When to File NR6
The NR6 should be filed before you receive your first rental payment of the year. For most landlords:
- December 31 of the previous year (to be effective January 1)
- Before your first rent payment if you buy a new property mid-year
Ready to File?
At NR6.ca, we handle the entire process for a flat $999 CAD fee—including acting as your Canadian agent. Most clients complete our form in under 7 minutes.
