Thousands of GTA condos are owned by people who live outside Canada: owners who moved abroad for work, investors overseas, families who bought for a child at school. The rental rules are the same as for any landlord. The tax rules are not, and the cost of getting them wrong lands on both the owner and whoever collects the rent. This is a plain-language guide to how it works in 2026, based on the Canada Revenue Agency’s published guidance.
The short version
- If you are a non-resident of Canada for tax purposes, 25% of the gross rent must be withheld and sent to the CRA, every month.
- The person who pays or collects the rent for you, usually your property manager, is responsible for withholding it and remitting it by the 15th of the following month.
- You can cut the withholding to 25% of your net rental income (rent minus expenses) by filing Form NR6 with the CRA, ideally before January 1 or before the first rent payment.
- If you use the NR6, you must file a section 216 return by June 30 of the following year, even if you owe nothing.
Who counts as a non-resident?
Residency for tax purposes depends on your ties to Canada (a home here, a spouse or dependants here, and so on), not on your citizenship or passport. A Canadian citizen who has moved abroad can be a non-resident; a newcomer living here is usually a resident. If you are not sure, ask your accountant before the first rent cheque, because the withholding obligation starts with the first payment.
How the 25% withholding works
Without any election, the CRA’s rule is simple: the payer or agent withholds 25% of the gross rent paid or credited to you and remits it on or before the 15th day of the following month. On a condo renting for $2,800 a month, that is $700 a month, or $8,400 a year, before a single expense is deducted. Condo fees, property tax, mortgage interest and insurance do not reduce that amount unless you file an NR6.
At the end of the year the payer issues you an NR4 slip showing the gross rent and the tax withheld, and files the NR4 information return with the CRA.
Form NR6: withholding on net rent instead
Form NR6 is an undertaking to file a Canadian return for your rental income. Once the CRA approves it, your agent withholds 25% of the net amount (the rent minus the expenses you expect to pay) rather than the gross rent. For most leveraged condos, that is a much smaller number, and sometimes close to zero.
Timing matters. The CRA asks to receive the NR6 on or before January 1 of the year it applies to, or before the first rental payment is due. It accepts forms later in the year, but net withholding only starts on the first day of the month the CRA receives it; rent paid before then is still withheld at 25% of the gross. The NR6 is filed for each year, so owners who keep renting need a new one before every January 1.
The June 30 section 216 return
An approved NR6 comes with a firm deadline: the section 216 return for the year is due on or before June 30 of the following year. It is required even with no tax payable, no refund expected or a net loss. If it is late, the CRA can treat the election as invalid, assess 25% of the gross rent for the year, credit what was already withheld, and charge penalties and interest.
Owners who did not file an NR6 can still choose to file a section 216 return to recover over-withheld tax, generally within two years of the end of the year the rent was paid.
What your property manager should be doing
- Asking about your residency status before the lease starts, in writing.
- Withholding and remitting on time every month, at gross or at the approved net amount.
- Co-ordinating the NR6 with you and your accountant before January 1.
- Issuing the NR4 slip and filing the NR4 return after year end.
- Keeping the year’s income and expense records ready for your accountant’s section 216 return.
If rent has been paid to a non-resident owner without withholding, the CRA charges interest on the unremitted tax and may add a penalty. It is better to fix it early with an accountant than to wait for a letter.
Frequently asked questions
Does a tax treaty lower the 25%? Rental income from Canadian property is generally taxed in Canada at 25% on gross, or at regular rates on net income through a section 216 return. Ask your accountant how your country of residence treats the same income.
I moved abroad mid-lease. Does anything change? Yes. The withholding obligation begins with rent paid after you become a non-resident. Tell your property manager as soon as your move date is set.
Can my tenant pay me directly? They can, but then someone still has to withhold and remit. Using a Canadian property manager as your agent keeps the obligation in professional hands.
Own a rental in the GTA and live outside Canada? BCR Property Management sets up non-resident owners properly from day one and works with your accountant on the NR6 and year-end slips. Talk to us or call 905-604-7200.
Sources: Canada Revenue Agency, “Rental income from real property in Canada” (Part XIII withholding, Form NR6) and “Filing and reporting requirements” for non-resident rental income, and Guide T4144, Income Tax Guide for Electing Under Section 216, as published on canada.ca and read November 2, 2026. The $2,800 example is arithmetic for illustration. This article is general information, not tax or legal advice; speak with a qualified accountant about your situation.