Living outside Canada doesn't end your Canadian taxes if money still comes from here. Rent, pensions, dividends and Canadian wages are all taxed, each in its own way.
Who this applies to
You're a non-resident if you normally live in another country and aren't considered a resident of Canada, or if you have no significant residential ties here and either lived outside Canada all year or stayed fewer than 183 days. As a non-resident, you pay Canadian tax only on income from Canadian sources. If this is the year you're moving away, start with departure tax and leaving Canada.
Part XIII withholding tax and NR4 slips
A lot of it is taxed by withholding. The common types are:
- dividends
- rent and royalties
- pensions, Old Age Security, and CPP or QPP benefits
- retiring allowances, RRSP and RRIF payments, and annuities
- management fees
The Canadian payer deducts the tax when the amount is paid or credited to you. The usual rate is 25%, unless a tax treaty between Canada and your country lowers it, so tell each payer you're a non-resident and which country you live in. If the right amount comes off, that's your final Canadian tax on the income. Filing a regular return won't get Part XIII tax refunded, so don't report this income on one unless you're making an election (section 216 for rent, section 217 for certain pensions). Interest from a payer you deal with at arm's length is generally exempt. If you receive OAS, you may have to file an Old Age Security Return of Income each year.
Payers report what they paid you and what they withheld on an NR4 slip. They have to give you your slips by the last day of March after the calendar year.
Rent from Canadian property
If a payer or agent such as a property manager handles your rent, they must withhold 25% of the gross rent and send it to the CRA by the 15th of the following month. Tenants are a different story. The CRA says someone paying rent for their own home isn't expected to know where their landlord lives, or to withhold anything. Its NR4 guide (T4061) now says a non-resident who receives residential rent must send the 25% to the CRA directly unless the rent comes through a Canadian agent such as a property manager. Penalties and interest can be assessed if that tax isn't sent in.
Withholding on gross rent ignores your expenses. Two things can lower the bill:
- The section 216 election. You file a separate return, Form T1159, reporting only your Canadian rental income and expenses, with all your Canadian rentals on the one return. You may pay less tax and get back some or all of the amount withheld.
- Form NR6. You and your Canadian agent ask the CRA to let the agent withhold 25% of your net rent (after expenses) instead of the gross. The CRA has to approve it. It takes effect from the first day of the month the CRA receives it, so rent paid before that is still withheld on the gross. Once you file an NR6, you must also file the section 216 return.
| What | When |
|---|---|
| Payer or agent sends the 25% to the CRA | By the 15th of the month after the rent is paid or credited |
| Form NR6 | By January 1 of the year, or before the first rent payment is due |
| Section 216 return for 2025, with an approved NR6 | June 30, 2026 |
| Section 216 return, general rule | Generally within 2 years from the end of the year the rent was paid |
| NR4 slips to you | Last day of March after the calendar year |
For the rental side in general, see our post on rental income tax.
Working or running a business in Canada
Pay for work done in Canada and income from a business carried on here are taxed under Part I. Tax may already come off your pay, but you may still need to file a return to work out your final bill. The same goes for taxable capital gains on certain Canadian property, the taxable part of Canadian scholarships and bursaries, and income for services you provide in Canada outside regular employment. Only your Canadian income goes on it, not, say, interest from your bank account abroad.
The return is due April 30 of the following year, or June 15 if you or your spouse or common-law partner carried on a business in Canada. Any balance owing is still due April 30. Rental income under section 216 stays on its own separate return, so some people file two Canadian returns for the same year. If you carry on a business here, you may also have to pay tax by instalments.
Selling Canadian property
Canadian real estate, Canadian business property and unlisted shares of Canadian corporations are examples of taxable Canadian property. When you sell one, or plan to, you generally notify the CRA on Form T2062 (or a related form) and send payment or security for the tax. The notice is due no later than 10 days after the sale. There's more in our post on selling property as a non-resident.
How we help
Filing for non-residents is one of the other filings we handle, and we also help with rental income and with selling property as a non-resident. With your authorization, our CRA advocacy work covers speaking to the CRA for you and answering its letters.