What's this NR6 form my property manager mentioned — do I file it every year?
The NR6 is an application (not quite a "filing") that lets your Canadian agent withhold 25% on your net rent instead of the gross. Yes, it's annual: you must apply every year, and CRA must approve it before January 1 of the year it covers. Miss the deadline and you're back to 25% of gross for the whole year.
What NR6 changes
| Without NR6 | With approved NR6 |
|---|---|
| 25% withheld on gross rent | 25% withheld on net rent (after expenses) |
| No application needed | Apply yearly; CRA approval required before Jan 1 |
| Section 216 return still required | Section 216 return still required |
Example: $2,500 rent, $2,200 expenses. Without NR6: $625/month withheld. With NR6: $75/month withheld (25% × $300 net). The cash-flow difference is enormous.
The annual ritual
- Apply each year — the NR6 must be approved before the year starts. Late applications are generally not backdated.
- Your agent signs an undertaking to file your Section 216 return and pay any balance. Agents take this seriously because CRA can hold them liable.
- File the Section 216 return by June 30 reporting actual net income. The NR6 withholding is just a prepayment; the return settles the final tax.
Frequently asked questions
I applied in March — can it cover January and February?
Generally no. The approval must be in place before January 1. Apply in the fall for the following year.
Does NR6 reduce my actual tax?
No — it only changes the withholding base. Your final tax is determined by the Section 216 return either way. NR6 just stops the massive over-withholding.
My agent refuses to sign the undertaking. Now what?
Find an agent who will, or accept gross-basis withholding and recover the difference via the Section 216 return. The undertaking is the price of the better cash flow.
Sources
- https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4144/income-tax-guide-electing-under-section-216.html (CRA Guide T4144)