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The short answer
Form NR6 is an undertaking to file a section 216 return for Canadian rent; once the CRA approves it, the agent may withhold 25% of net rent (after expenses) instead of 25% of gross rent. File it by 1 January of each year or before the first rent payment is due, and the section 216 return then becomes compulsory, due by 30 June of the following year.
Why the NR6 exists
Without it, the CRA guide T4144 says the payer or agent must withhold 25% of the gross rent paid or credited to a non-resident. You can recover over-withholding later by filing a section 216 return, but that means months, sometimes years, with your money held by the CRA while you are still paying the mortgage, property tax and repairs. The NR6 moves the relief to the start of the year.
How it works, step by step
- Appoint an agent. Usually a property manager or someone resident in Canada who collects the rent, pays the expenses and handles the withholding.
- File the NR6 on time. T4144 says to send it by 1 January of each year, or before the first rental payment is due. It is an annual form.
- Keep withholding on gross until approval. The agent "must continue to withhold non-resident tax on the gross rental income until the CRA approves".
- After approval, withhold on net. The agent may withhold 25% of the rent left after paying the rental expenses.
- Remit and report. The agent pays the tax by the 15th of the month after the rent is paid or credited, gives you two copies of the NR4 slip and files the NR4 information return with the CRA.
- File your section 216 return. With an approved NR6, you must file even if you owe nothing or expect a refund: for 2025, by 30 June 2026.
Worked example (illustrative figures only)
A Lagos-based owner lets an Ottawa flat for $2,000 a month. The agent pays $1,200 a month in expenses (mortgage interest, condo fees, property tax, management).
| Monthly | Without NR6 | With approved NR6 |
|---|---|---|
| Gross rent | $2,000 | $2,000 |
| Base for withholding | $2,000 gross | $800 net |
| Withheld at 25% | $500 | $200 |
| Over 12 months | $6,000 | $2,400 |
The difference, $3,600 over the year, stays in the property account instead of waiting for a refund. The final tax is still settled on the section 216 return, so the NR6 changes timing, not the amount you ultimately owe.
Which expenses reduce the withholding base
Net rent means rent left after the rental expenses the agent pays. The CRA rental guide T4036 lists the usual deductible running costs: property taxes, insurance, interest on money borrowed for the property, repairs and maintenance (but not the value of your own labour), and management and administration fees, including amounts paid to agents for collecting rent or finding tenants. Capital spending, such as a new roof that improves the property beyond its original condition, is treated differently. If the agent counts capital items as expenses, too little is withheld during the year and the section 216 return will show a balance owing by 30 April.
Mortgage principal is not an expense. Many owners in Nigeria are surprised that a property with negative cash flow can still show a positive net rent for tax, because only the interest part of each mortgage payment counts.
The catch: the return is no longer optional
T4144 is blunt about what happens if you sign an NR6 and then miss the 30 June date: "your election will be invalid", and you become liable for non-resident tax on the gross rent, plus interest. Its own example shows an additional $3,750 plus interest. In other words, a missed deadline can cost more than never filing an NR6.
- Put the 30 June deadline in your calendar and your agent's.
- Ask the agent for the NR4 slips early in the year; they are due to you and the CRA by the end of March under CRA guide T4061.
- If you sell the property and there is recapture of capital cost allowance, the section 216 return is due by 30 April instead.
Who can be the agent, and what they carry
Under T4144 the agent takes on the payer's duties: withholding, remitting by the 15th and NR4 reporting. CRA guide T4061 says a payer who fails to withhold is liable for the tax plus a 10% penalty, rising to 20% for repeat failures made knowingly or through gross negligence, with daily compounded interest. A good property manager will know this; a relative doing it as a favour may not, so talk it through before they sign.
What to check first
- You are non-resident and the property is let at a commercial rent.
- Your agent agrees in writing to the duties above.
- NR6 sent before 1 January or before the first rent payment.
- A realistic expense budget, so net-rent withholding is not too low.
- Calendar reminder for the 30 June section 216 return.
The return itself is covered in filing a section 216 return; if you are about to leave Canada, start with residency and Form NR73. This is general information, not tax advice.
Where Pryme fits
When net rent comes home to Nigeria, it has to be converted. A Pryme account holds NGN with USD, GBP and EUR, and Swap converts only when you choose, with the rate and fee shown before you approve.
Questions people ask
What does an NR6 do?
Once approved by the CRA, it lets your agent withhold 25% of net rent after expenses instead of 25% of gross rent.
When must I file the NR6?
By 1 January of each year, or before the first rental payment is due. Until the CRA approves it, the agent keeps withholding on gross rent.
Do I still have to file a section 216 return if I use an NR6?
Yes. With an approved NR6 the section 216 return is required even if you owe nothing; for 2025 it was due by 30 June 2026.
What happens if I miss the 30 June deadline after an NR6?
T4144 says the election becomes invalid and you owe non-resident tax on the gross rent, plus interest.
Sources
- CRA T4144, Income Tax Guide for Electing under Section 216 (modified 20 Jan 2026) · accessed Oct 2026
- CRA T4061, NR4 – Non-Resident Tax Withholding, Remitting and Reporting (modified 22 Sep 2026) · accessed Oct 2026
- CRA T4036, Rental Income guide · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.