How does Form NR6 reduce withholding on a non-resident's rental income?

Arsen Accounting Services · Question 174 · Sources checked October 29, 2026

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An approved NR6 can allow withholding on estimated net rental income instead of gross rent. It improves cash flow in suitable cases, but it comes with responsibilities for the non-resident owner and the Canadian agent.

Approval comes before reduced withholding

CRA says the owner and resident Canadian agent submit the undertaking for approval, generally before January 1 or the first rental payment is due. Reduced withholding should not begin merely because the form was mailed. After approval, the agent withholds on the applicable net amount and remits under the required schedule.

The owner must then file the section 216 return by the NR6-related deadline, even if no tax is payable or the property has a loss. Missing that deadline can invalidate the intended treatment and expose the parties to additional amounts.

Official guidance: [1], [2].

Use a realistic rental budget

For example, expected repairs or financing costs may change during the year. Maintain actual records alongside the estimate used for NR6 so the final return can reconcile the difference.

Prepare the undertaking file

• Ownership and non-resident identification details.
• Canadian agent's information and responsibilities.
• Estimated gross rent and supported expense budget.
• Prior filings, remittances, and CRA approval letters.

Ask the preparer and agent to agree on a filing calendar and responsibility for each step. Retain evidence of approval, monthly remittances, and the final election. An NR6 is not a substitute for the NR4 reporting process or the eventual section 216 return; each document serves a different purpose.