Are you a non-resident landlord? Find out how the NR6 can help you reduce your tax remittance and improve finances. The post How Non-Resident Landlords Disrupt Their Cash Flow Without Realizing It appeared first on LandLord.
A significant number of Canadians living abroad remit far more tax each month than they actually need to — not because they’re doing anything wrong, but because they follow the default non-resident rules. And for many non-resident landlords, this overpayment happens simply because they never file an NR6.
By default, non-residents remit 25% of their gross rent unless they submit an NR6 to the CRA. Most owners never explore the alternative, so they send much more upfront than they truly owe. The money isn’t lost, but it restricts your monthly cash flow for no good reason. And for property owners, cash flow matters.
A Simple Example
Say your rental brings in $2,500 per month.
The default rule requires you to remit $625 — 25% of the gross rent.
But after your usual expenses — property management, utilities, mortgage interest, insurance — your real profit might be closer to $300.
With an NR6 filed, the CRA only taxes you on the profit, which means your real tax is closer to:
25% of $300 = $75.
Yet without an NR6, you send $625 every month simply because you didn’t file the form.
That’s $550 per month you didn’t need to send upfront — money that could have stayed in your account and kept your cash flow healthy.
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So What Happens If You Don’t File an NR6?
Skipping the NR6 isn’t the end of the world. You can still choose to file your tax return later and potentially recover what you over-remitted — or decide not to file at all, in which case the CRA keeps the full 25%.
The key difference is this:
- Without an NR6: you possibly over-remit during the year and only fix it later (if you file a return).
- With an NR6: your monthly remittances are calculated on your estimated net income, which is much closer to your real tax liability and helps keep more cash in your hands throughout the year. In this case, you must file a tax return (failure to do so results in steep penalties). When you file, you’ll either owe a small amount or receive a small refund, depending on your actual expenses.
For most investors, that improved cash flow is what makes the difference.
To make this even easier, the video below gives a clear walkthrough of the NR6 process, including what the form does, who should file it, and how it changes your monthly CRA remittances.
Have questions about the NR6 or your non-resident tax responsibilities? Send us a message — we’re happy to help.
The post How Non-Resident Landlords Disrupt Their Cash Flow Without Realizing It appeared first on LandLord.
