Additional Services for Non-Resident Owners
At Paradigm Management we take care of all government regulations, rent collection and tax deductions for non-resident owners. We also assist in completing and filing all necessary forms to the CRA.
Taxation For Non-Resident Owners
if you are a non-resident landlord renting out property in Canada, you are required to withhold and remit non-resident tax of the gross rental income each month. Taxes can be deducted on net renal income once an NR6 is submitted and approved by CRA. The payer has to pay the tax on or before the 15th day of the month, following the month the rental income is paid.
We at Paradigm Management offer the complete solution for non-resident owners as their Canadian agent. We deduct the withholding tax and submit to CRA each month, we file the NR6 and get it approved from CRA in order to deduct withholding taxes at the net income. Paradigm Management will provide you with an NR4 slip that shows the gross rental income, and non-resident tax withheld for the year. We can also assist in filing the section 216 return at the end of the year through our accountants at a small fee if you choose to do so.
Frequently asked questions
Who is a non-resident of Canada for tax purposes?
You are a non-resident for tax purposes if you routinely live in another country or do not have significant residential ties in Canada, or you stay in Canada for less than 183 days in a tax year.
What are withholding taxes?
Non-residents landlords are required to deduct and pay 25% of the gross rent no later than the 15th day of the following month that the rental income was recieved. Generally this tax withheld is considered your final tax obligation. However, under section 216 of the Income Tax Act, you are allowed to pay tax on your net Canadian sourced rental income instead of the gross amount and you may pay less tax.
What is an NR4?
The NR4 slip details the gross rental income and non-resident tax withheld and remitted for the taxation year. Paradigm Management will issue NR4 slips for all non-resident owner clients on or before March 31st every year.
What is an NR6?
An NR6 allows non-residents to withhold and remit non-resident tax at 25% of the net rental income amount instead of the gross rental income amount. At Paradigm Mangement we assist in completing and filing the NR6 on behalf of non-resident owners each year.
What is section 216 return?
As a non-resident of Canada, you can choose to send the CRA a seperate Canadian tax return to report your rental income from property in Canada. Choosing to send CRA this return is called 'Electing' under section 216 of the Income Tax Act.