Rental withholding and remittances
Withholding is generally 25% of gross rent paid or credited to a non-resident, remitted to the CRA by the 15th of the following month. Confirm who is responsible for the payments.
PRACTICAL TAX GUIDE · CANADIAN RENTAL PROPERTY
Renting Out Your Home After Leaving Canada: Tax Filings and Next Steps
If you become a non-resident and rent out your Canadian home, rental tax obligations can begin before your annual return is due. Use this guide to plan the withholding, NR6, NR4 and Section 216 work alongside your departure review.
Get help with your rental filingsSeparate the move, the property and the rental income.
Each brings its own tax questions. A clear timeline and an agreed division of responsibilities can help you avoid gaps between the departure return, ongoing remittances and year-end filings.
Start with residency and the rental timeline.
Moving abroad and renting out your home raises several separate questions. First, determine your Canadian tax residency and when it changed. Then establish when the property became a rental, who owns it, who collects rent and what has already been reported.
For example, you might move out in one month and receive your first tenant payment later. Keep both dates and the related records. A residency review and a rental review address different parts of that timeline.
Review the change from a home to a rental.
Changing a property from personal to rental use has tax consequences and requires a review of its value and cost records. Keep the purchase documents, improvement records, rental start date and evidence of value at the change.
Ask about change-of-use reporting, possible elections and the property’s principal-residence history before assuming a future sale will be fully exempt. We can scope that review alongside the departure consultation.
HOW WE CAN HELP
Match each task to the right filing.
NR6 undertaking
Written CRA approval of NR6 permits withholding on rent remaining after rental expenses are paid, excluding capital cost allowance (CCA). Gross withholding continues until approval. Discuss the Canadian agent arrangement before signing.
NR4 reporting
Annual NR4 reporting records the rental income and tax withheld. It is separate from the owner’s income tax return.
Section 216 return
A Section 216 election calculates tax on net Canadian rental income and may refund excess withholding. An approved NR6 requires the return even when the property has a loss.
We confirm the scope, required documents and fee before work begins.
Which rental tax deadlines should you plan for?
For individual non-resident owners, the timing depends on the filing and whether the CRA approved Form NR6.
Monthly rental remittances
Non-resident rental withholding is generally due to the CRA by the 15th of the month after rent is paid or credited. Agree who will calculate and remit it before the first payment.
Section 216 with an approved NR6
The return is due by June 30 of the following year, even if no tax is payable. For example, an approved NR6 for 2027 generally requires the 2027 Section 216 return by June 30, 2028.
Section 216 without an approved NR6
The general election deadline is two years after the end of the rental year where 25% gross withholding applied throughout the year. Earlier deadlines can apply, including when reporting CCA recapture. Ask us to confirm your deadline.
NR4 and the agent arrangement
Confirm who prepares the annual NR4 reporting and who provides the owner with the slips and remittance records. NR6 preparation and agent services can be scoped alongside the annual rental return.
A rental timeline example.
Suppose you leave Canada in July and your tenant moves in during September. Keep your departure date and first rental payment date separately. Confirm residency, review the change of use, and arrange the rental tax work before waiting for the next tax season.
If you have already started collecting rent, tell us what was withheld and remitted and whether you received NR6 approval. We can review the missing steps and discuss Section 216 rental return preparation. A property manager’s year-end statement is useful, but it does not replace the required tax filings.
Create a records folder before the first filing.
Keep the lease, monthly rental statements, invoices and receipts, mortgage interest statements, property tax and insurance records, and management fees. Add copies of remittances, NR4 slips, NR6 approval and CRA correspondence as they arrive.
For joint ownership, record each owner’s share and residency. If a manager is involved, confirm what they collect, remit and report and what remains your responsibility.
We review expenses and the records supporting them during preparation; an item appearing on a statement does not by itself establish its tax treatment.
If rent has already started or filings are overdue.
Build a year-by-year timeline of rent, remittances and returns before sending additional filings. Include any CRA notices. We can identify missing work and review the options that remain available; late filing can change the outcome.
If you plan to sell, tell us before closing. Clearance certificate assistance and the sale-related return work are separate from the annual rental filings.
For preparation and ongoing support, explore Non-resident rental tax returns and NR6 preparation and agent services. For the move itself, see Leaving Canada and departure tax.
Questions before you get started.
Can a property manager handle everything?
Some managers handle withholding or reporting; others handle only the property. Ask for a clear list of services and copies of the tax records. We can work with the existing arrangement.
Should I wait until my annual return to ask about rental tax?
No. Ongoing remittances and an NR6 application need attention during the rental year. Contact us when planning the rental or as soon as you identify a gap.
What should I include in an inquiry?
Tell us where you live, the province where the property is located, when the rental began, which tax years need attention and whether an agent is involved. Leave identification numbers and documents out of the form.
Can I stop withholding because the property makes a loss?
A rental loss does not by itself remove the withholding obligation. Gross-rent withholding continues until the CRA approves NR6 in writing. The annual rental return and monthly withholding are separate steps.
Does NR6 replace my Section 216 return?
No. NR6 is an undertaking tied to reduced withholding. An approved NR6 means you must file the Section 216 return even if the rental has no tax payable. We can help coordinate the NR6 and agent work with the annual rental return.
Can you help with both my departure return and rental filings?
Yes. We can scope the Canadian departure review, rental filings and agent services together. Usama Chaudhry, CPA, has worked in cross-border tax since 2013. Tell us where you moved and whether you also need U.S. return preparation.
Official guidance
CRA residency guidance · CRA personal-to-rental changes · CRA Section 216 guide
This page provides general information. Your filing requirements and tax treatment depend on your circumstances and the rules for the relevant year.
CONTACT US
Plan your Canadian
rental filings.
Tell us where you live, where the property is located, when rent began, and whether NR6 or remittances are already in place.
CUC Cross Border CPA
info@cpacuc.com
Based in Vancouver BCServing all of Canada and the United States
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