Guide
Understanding Section 216 Returns
A complete guide to Section 216 income tax returns for non-resident landlords with Canadian rental property.
What is a Section 216 Return?
A Section 216 return is an income tax return that non-resident landlords must file to report their Canadian rental income. It's named after Section 216 of the Income Tax Act, which allows non-residents to elect to file a Canadian tax return on their rental income.
If you filed an NR6 form, you are required to file a Section 216 return. This return reconciles the tax withheld during the year with your actual tax liability, and you may receive a refund if too much was withheld.
Section 216 vs. Regular Tax Return
| Feature | Section 216 | Regular T1 |
|---|---|---|
| Who Files | Non-residents | Canadian residents |
| Income Reported | Canadian rental only | Worldwide income |
| Deadline | June 30 of following year | April 30 |
| Tax Rate | Graduated rates (like residents) | Graduated rates |
| Deductions | Limited to rental expenses | Full personal deductions |
Why File a Section 216 Return?
- Required if you filed an NR6 form
- Claim a refund if too much tax was withheld
- Report actual expenses to reduce taxable income
- Avoid penalties for non-filing
- Maintain compliance with CRA requirements
Key Deadlines
Filing Deadline: June 30
Section 216 returns must be filed by June 30 of the year following the tax year. For example, the 2025 tax year return is due June 30, 2026.
Note: If you miss the 2-year deadline, you lose the ability to file and may forfeit any refund.
What Happens If You Don't File?
Consequences of Not Filing
- • Your NR6 election may be revoked by CRA
- • You may face penalties and interest charges
- • Future NR6 applications may be denied
- • You forfeit any potential refund
- • Your property manager may be held liable for withholding shortfall
Information Needed for Section 216
Income Information
- • Total rental income received
- • NR4 slips from payers
- • Tax withheld during the year
Expense Documentation
- • Mortgage interest statements
- • Property tax receipts
- • Insurance premiums
- • Repair and maintenance invoices
- • Property management fees
The Relationship Between NR6 and Section 216
Think of NR6 and Section 216 as two parts of the same process:
NR6 (Beginning of Year)
Estimates your net income and sets withholding rate for the year
Section 216 (Following Year)
Reports actual income/expenses and reconciles the tax withheld
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