Estimated reading time: 4 minutes

A significant number of Canadians living abroad remit far more tax each month than they actually need to — not because they’re doing anything wrong, but because they follow the default non-resident rules. For many non-resident landlords, this overpayment happens simply because they never file an NR6.

By default, non-residents remit 25% of their gross rent unless they submit an NR6 to the CRA. Most owners never explore the alternative, so they send much more upfront than they truly owe. The money isn’t lost, but it restricts your monthly cash flow for no good reason — and for property owners, cash flow matters.

Short version: filing Form NR6 lets the CRA tax your net rental profit each month instead of your gross rent. Skip it, and you remit 25% of every dollar that comes in — before mortgage interest, property management fees, or any other expense is deducted.

A Simple Example

Say your rental brings in $2,500 per month. The default rule requires you to remit $625 — 25% of the gross rent. But after your usual expenses — property management, utilities, mortgage interest, insurance — your real profit might be closer to $300.

With an NR6 filed and approved, the CRA only taxes you on the profit, which means your real remittance is closer to:

25% of $300 = $75.

Yet without an NR6, you send $625 every month simply because you didn’t file the form. That’s $550 per month you didn’t need to send upfront — money that could have stayed in your account and kept your cash flow healthy.

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So What Happens If You Don’t File an NR6?

Skipping the NR6 isn’t the end of the world. Under the CRA’s own rules, you can still choose to file a Section 216 return later and potentially recover what you over-remitted — or decide not to file at all, in which case the 25% withheld on your gross rent is treated as your final tax obligation and no return is required.

The key difference is this:

  • Without an NR6: you over-remit throughout the year on your gross rent, and can only recover the difference later by filing a Section 216 return — which is optional in this case.
  • With an NR6: your monthly remittances are calculated on your estimated net income, much closer to your real tax liability, keeping more cash in your hands throughout the year. In exchange, filing a Section 216 return (Form T1159) by June 30 of the following year becomes mandatory — miss that deadline and the CRA voids your NR6 election retroactively, assessing tax on your full gross rent instead. When you file, you’ll either owe a small amount or receive a small refund, depending on your actual expenses.

For most investors, that improved cash flow is what makes the difference. It’s also worth noting the NR6 itself has its own deadline: the CRA requires it to be filed on or before January 1 of the rental year, or before your first rental payment is due — it isn’t something you can file retroactively partway through the year.

To make this even easier, the video below gives a clear walkthrough of the NR6 process, including what the form does, who should file it, and how it changes your monthly CRA remittances.

Let Us Handle the NR6 and Section 216 Filings

Our client portal tracks NR6 approvals and Section 216 deadlines for every non-resident owner we manage — so a missed date never costs you your cash flow advantage.

See Our Non-Resident Services →

Have questions about the NR6 or your non-resident tax responsibilities? Send us a message — we’re happy to help.

How Non-Resident Landlords Disrupt Their Cash Flow Without Realizing It

Frequently Asked Questions

→ What happens if a non-resident landlord doesn’t file an NR6?

Without an approved NR6, the CRA requires 25% of gross rental income to be withheld and remitted every month, regardless of expenses. The non-resident can still choose to file a Section 216 return after the year ends to potentially recover any excess withheld, or choose not to file at all — in which case the 25% withheld on gross rent is treated as the final tax obligation.

→ When is the deadline to file Form NR6?

The CRA requires Form NR6 to be filed on or before January 1 of the rental year, or before the first rental payment for that year is due. It cannot be filed retroactively partway through the year for income already received under the default 25%-of-gross withholding.

→ Do I have to file a Canadian tax return if I file an NR6?

Yes. Once the CRA approves an NR6, filing a Section 216 return (Form T1159) by June 30 of the following year becomes mandatory, even if no tax is owed. Missing that deadline voids the NR6 election retroactively, and the CRA will assess tax on the full gross rental income instead of net profit.