For non-residents earning rental income from Canadian property, the tax implications can be complex. Fortunately, the Canada Revenue Agency (CRA) allows non-residents to remit tax on net rental incomeinstead of the standard 25% withholding on gross rentsthrough the NR6 application process.

At Calgary Tax Consulting, we specialize in non-resident taxes and helping property owners stress free solution. Here’s everything you need to know about filing Form NR6, including timelines, requirements, and key considerations.

What is an NR6?

If a non-resident person or corporation is earning rental income in Canada and wants to withhold the tax on a net rental income (loss) basis (after expenses) rather than the gross amount. This helps reduce the upfront tax burden, especially for those with tight cash flow, and helps you ease tax withholding.

Why File an NR6?

If you don’t have an approved NR6, CRA requires you to remit 25% of the gross rental income to CRA monthly by the 15^th of the following month.  Suppose you have approved NR6 from CRA, you only need to withhold and remit 25% of the forecasted net income (loss). If you have forecasted a loss and have approved NR6, no withholding is required

Step-by-Step Process to File NR6

1. Appoint a Canadian Agent

To qualify for an NR6, you must have designated a Canadian agent, someone who is a tax resident of Canada (can be your friend, family, etc.). your agent will:

• Get a non-resident (NR) tax account number on your behalf.
• Apply for the NR6 approval with CRA
• Remit 25% withholding tax payments to the CRA on a net rental income (loss) basis if NR6 is approved or 25% on gross rent income.
• The agent will issue an NR4 slip to you at the end of the year, which will be enclosed with the section 216 tax return.

Who can act as your agent: he/she can be a friend, property manager, accountant, or anyone who can be trusted, but he/she must be a Canadian tax resident.

2. Prepare a forecasted Monthly Rental Income and Expense statement

Either you or your agent must prepare a forecasted monthly gross rental income and expenses statement for the year. This forecast forms the basis for determining your net rental income (or loss).

Note: We have been asked if you have a net rental loss; can this loss be used to reduce income from other sources? The answer is no; the net rental cannot be used to reduce the other source income or carried forward to future years.

When to Submit NR6 to CRA

It is ideal to submit the NR6 at least 90 days before the start of the next year. CRA usually takes around 90 days (on average) to process the NR6. If you have more than one property, prepare separate forecasted statements for each property and enclose them with the NR6 approval request.

If you want to pay tax on a net basis for the 2026 calendar year, it is *advisable to apply in October 2025.

4. Wait for CRA Approval

Once the request is submitted to CRA, wait for CRA’s written approval. You should keep remitting 25% of gross rental until you receive approval confirmation. Once the NR6 is approved, you can begin withholding 25% of the net rental income (loss).

Important Filing Deadlines

• If you have approved NR6: Section 216 Return (Rental Income Tax Return)is due by June 30th of the year following the rental income year (e.g., June 30, 2027, for 2026 income).
• NR4 Slip Issuance:The agent will file the NR4 at the end of the year and give you a copy of the slip, which can be enclosed with the S.216 return.

Note: if you fail to file the section 216 return by June 30^th can result in CRA revoking the NR6 approval, and CRA asks you to pay the 25% withholding tax on gross rental income.

How Calgary Tax Consulting Can Help

This seems like a very complicated and hectic process. We here, at CTC, help you file NR6 and S.216 income tax compliance, as a non-resident can be challenging. At Calgary Tax Consulting, we provide:

• Agent services
• Timely NR6, NR4, and S.216 filings
• Assistance with CRA correspondence and queries.