Guide
The Complete NR6 Form Guide
Everything you need to know about the NR6 form and how it can save you thousands on Canadian rental income tax.
What is the NR6 Form?
The NR6 form, officially titled "Undertaking to File an Income Tax Return by a Non-Resident Receiving Rent from Real or Immovable Property," is a CRA form that allows non-resident landlords to elect to have tax withheld on their net rental income instead of the standard 25% on gross rent.
Without an approved NR6, your property manager or tenant is legally required to withhold 25% of your gross rental income and remit it to CRA. This can result in significant over-payment of tax, as it doesn't account for your expenses.
Who Qualifies for NR6?
You may file an NR6 if you:
- Are a non-resident of Canada for tax purposes
- Own rental property in Canada (residential or commercial)
- Receive rental income from the property
- Have a Canadian agent to act on your behalf
- Agree to file a Section 216 return by June 30 of the following year
Benefits of Filing NR6
Reduced Withholding
Pay tax on net income (after expenses) instead of gross rent. This can reduce your withholding by 50-75%.
Better Cash Flow
Keep more of your rental income throughout the year instead of waiting for a refund.
Deduct Expenses
Mortgage interest, property taxes, repairs, insurance, and management fees can all reduce taxable income.
Legal Compliance
NR6 is the proper way to reduce withholding while staying compliant with CRA regulations.
Example: How NR6 Saves You Money
Consider a property with:
- • Gross annual rent: $36,000
- • Mortgage interest: $12,000
- • Property taxes: $4,000
- • Other expenses: $4,000
- • Net income: $16,000
Without NR6
$9,000
25% × $36,000 gross
With NR6
$4,000
25% × $16,000 net
Annual Savings: $5,000
Important Requirements
Key Requirements
- • You must have a Canadian resident agent (we provide this service)
- • You must file a Section 216 return by June 30 of the following year
- • NR6 must be filed before the first rental payment of the year for full-year coverage
- • NR6 needs to be renewed annually
Eligible Expenses You Can Deduct
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