NR6, NR4 and section 216: a plain guide for owners who live outside Canada

If you own a rental in BC and live outside Canada, the CRA taxes your rent differently. Three pieces of paper do most of the work: the NR6 form, the NR4 slip and the section 216 return. This guide explains how they fit together, using the CRA's own guide, T4144: Income Tax Guide for Electing Under Section 216.

It is general information, not tax advice. A cross-border accountant should look at your own situation.

Step 1. The 25% starting point

When rent is paid to an owner who is not a resident of Canada, the CRA says the payer "must withhold non-resident tax of 25% on the gross rental income." Gross means the full rent, before strata fees, property tax, mortgage interest or any other expense.

The payer is usually your agent. The CRA defines an agent as "a property manager or any other person who acts on your behalf regarding your Canadian-source rental income," and says the agent must be a resident of Canada.

Step 2. The NR6 form

The NR6 form lets the 25% be taken from your net rent instead of your gross rent. From T4144:

• You and your agent both complete the form.
• It should reach the CRA "on or before January 1 of each year or before the first rental payment is due."
• Once the CRA approves it, your agent "can withhold non-resident tax of 25% on your net rental income."
• Until the CRA approves it in writing, 25% of the gross rent is still withheld.

The NR6 is a promise. By filing it, you agree to file a section 216 return for that year.

Step 3. The NR4 slip

After the year ends, the payer gives you an NR4 slip. T4144 says it shows "the gross amount of rental income paid or credited to you during the year and the amount of non-resident tax withheld." You attach a copy to your section 216 return.

Step 4. The section 216 return

A section 216 return reports your rent and your expenses, and works out your tax on the net amount. The dates from T4144:

Missing the date with an NR6 in place is costly. T4144 says that if you do not file on time, "you will be subject to non-resident tax on your gross rental income." The CRA can then assess you for the difference.

For your own numbers, deductions and whether section 216 helps in your case, talk to a cross-border accountant.

How we handle this for owners abroad

Prela manages individual units for owners who live outside Canada. Rent is collected through our brokerage, Stonehaus Realty, and for a non-resident owner the non-resident tax is withheld and sent to the CRA every month.

You get a clear monthly statement you can read from anywhere, which is what your accountant needs at tax time. Our manager is based downtown Vancouver, and if a tenant breaks their lease early, we re-rent the unit at no charge to you.

Try our non-resident withholding calculator to see the difference an NR6 makes.

Questions owners ask

Do I need an NR6?

It is optional. Without one, 25% of the gross rent is withheld. With an approved NR6, 25% is withheld on the net rent instead, and you commit to filing a section 216 return by June 30.

When is the NR6 due?

T4144 says on or before January 1 of each year, or before the first rental payment is due.

What if my section 216 return is late?

If you had an NR6, T4144 says you become subject to non-resident tax on your gross rental income. Without an NR6, you have two years from the end of the year the rent was paid.

Does the BC speculation and vacancy tax apply to me too?

It can. The provincial rate for foreign owners is 3% for 2026 and 4% from 2027. See our speculation and vacancy tax and Empty Homes Tax guide.

Related: Non-resident landlord services