Canada Guide 2 min read

Canada Non-Resident Property Tax Calculator - NRST, Part XIII, Section 116

By Property AI Team

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Important Legal Disclaimer

General Information Only: This content and any calculators or tools provided offer general information about Canadian real estate and are not intended as legal, financial, tax, or professional advice. Real estate laws, regulations, and practices vary significantly by province and territory.

Not Financial or Legal Advice: This content does not consider your personal financial situation, investment objectives, or individual circumstances. Before making any property-related decisions, you should:

  1. Verify current information on official government websites, including:

  2. Consult with licensed and qualified professionals:

    • Licensed Real Estate Agent or Broker (for property transactions)
    • Licensed Lawyer or Notary (for legal matters and conveyancing)
    • Certified Financial Planner or Investment Adviser (for financial planning)
    • Chartered Professional Accountant (CPA) (for tax implications)
    • Licensed Mortgage Broker or Lender (for financing matters)

Regulatory Compliance: Real estate and financial advisory services in Canada are regulated at the provincial/territorial level. Only properly licensed professionals can provide advice specific to your situation.

Information Currency: Canadian real estate laws, tax regulations, mortgage rules, and government programs change regularly. Information and calculations provided may become outdated. Always verify current details through official sources and licensed professionals before making decisions.

No Liability: While reasonable efforts have been made to ensure accuracy, no warranty is provided regarding the completeness, accuracy, or currency of the information. Use of this information is entirely at your own risk.

General Info Only: This tool gives general info and estimates only. It is not tax, legal, or money advice. Canadian tax laws are hard to follow. They change by province.

Talk to Experts: Before you decide, speak with:

  • A CPA who knows Canadian non-resident taxes
  • A real estate lawyer who handles cross-border deals
  • The CRA website for current rules

Non-Resident Speculation Tax (NRST) and Foreign Buyer Tax

Ontario charges 25% NRST on homes bought by non-residents. BC charges 20% Foreign Buyer Tax. These taxes add up fast. Use our Property Investment Calculator to see the full costs. Some buyers can skip these taxes:

  • Work permit holders
  • Provincial nominees
  • Refugees
  • Those who become PR within 4 years (rebate offered)

Part XIII vs Net Income Election

Non-residents have two ways to pay tax on rental income. You need to know these options when you decide to rent or buy property in Canada:

  1. Part XIII (25% Withholding): Your agent holds back 25% of gross rent. You cannot deduct costs.
  2. Section 216 Election: You choose to pay tax on net income at tiered rates. File NR6 by January 1 to cut withholding to 25% of your expected net. File the Section 216 return by June 30.

Section 116 Certificates

When you sell Canadian property as a non-resident, you need a Section 116 certificate. If you do not have one, the buyer must hold back 25% of the sale price. Apply using Form T2062 at least 90 days before closing. This helps you avoid extra withholding and a 6-12 month wait for a refund.

Related Resources

Before you invest in Canadian property as a non-resident, use these tools: