Can a non-resident get a mortgage in Canada?

Yes. All major Canadian banks have non-resident mortgage programs. Foreign nationals typically need a 35% minimum down payment and pay a rate premium of 0.25–1.0% above resident rates. Canadian citizens and permanent residents living abroad face fewer restrictions and can access the same rates as Canadian residents.

What is Form NR6 and how does it save money on rental income?

Form NR6 is a CRA form that allows non-residents to have rental income tax withheld on the net amount after expenses rather than the gross rent. Without NR6, 25% of every rent payment is withheld. With NR6 approved, withholding is 25% of estimated net income — typically much less. File NR6 before the first rental payment each year.

What happens when a non-resident sells Canadian property?

Under Section 116, the buyer must withhold 25% of the gross sale price unless the seller provides a clearance certificate. To get a clearance certificate, apply to CRA at least 90 days before closing (Form T2062), pay estimated tax on 50% of the capital gain, and CRA issues the certificate. Without this certificate, 25% of the entire sale price is withheld — not just the gain.

What is the minimum down payment for a non-resident buying in Canada?

Foreign nationals typically need a 35% minimum down payment, and some lenders require 50%. Canadian citizens and permanent residents living abroad can access the same 5% minimum down payment as Canadian residents, with CMHC mortgage insurance available. Work permit holders with 2+ years remaining may qualify with 5% down under CMHC.

Canada Non-Resident Mortgage Calculator

Calculate the full cost of buying Canadian property as a non-resident or foreign national. Includes Non-Resident Speculation Tax by province, minimum down payment by residency status, foreign income qualification rules, rental withholding tax with NR6, and the critical Section 116 clearance certificate process when you sell. All figures in CAD.

Property Price

Non-Resident Status

Province

Base Mortgage Rate

Non-Resident Rate Premium

Amortization

years

Monthly Payment as Non-Resident

CA$3,235/mo

Minimum down: CA$280,000 (35%) | Effective rate: 5.70% | LTV: 65.0%

Minimum Down Payment

CA$280,000

35% of purchase price

NRST (Speculation Tax)

CA$200,000

25% of purchase price

Total Upfront (down + NRST)

CA$480,000

vs resident: CA$55,000

Extra Cost vs Resident

+-CA$1,183/mo

Rate premium impact per month

NRST applies: Foreign nationals purchasing in ON are subject to NRST at 25%.

Advanced

NRST by Province, Down Payment Rules & Income Qualification

Full NRST comparison table, residency-based down payment requirements, foreign income qualification

Non-Resident Speculation Tax (NRST) is a significant additional cost in Ontario and BC. Other provinces do not currently have this tax, making them more accessible for foreign buyers.

Province	NRST Rate	On CA$800,000
Ontario (selected)	25%	CA$200,000
British Columbia	20%	CA$160,000
Alberta	None	—
Québec	None	—
Manitoba	None	—
Saskatchewan	None	—
Nova Scotia	None	—
New Brunswick	None	—
Prince Edward Island	None	—
Newfoundland	None	—

Key exemptions: Canadian citizens and permanent residents are exempt from NRST regardless of where they live. Work permit holders may be exempt in Ontario and BC — confirm with a real estate lawyer before purchasing. NRST rates and rules change — always verify with current provincial legislation before finalizing a purchase.

Pro

Rental Tax Obligations, Entity Structure & Sale Process (Section 116)

25% withholding on rent, NR6 to reduce, personal vs corporation, clearance certificate on sale

If you rent out your Canadian property as a non-resident, you have significant tax obligations. The default withholding rate is 25% of gross rent — which can be reduced by filing Form NR6.

Annual Gross Rental Income

Default Withholding (25% gross)

CA$9,000

Your tenant or property manager must withhold this

Tax on Net Income (NR6)

CA$4,950

Estimated tax after filing T1 with net income

Annual Saving with NR6

CA$4,050

By filing NR6 and annual T1

NR6 Process:

File Form NR6 with CRA before the start of each calendar year (or before first rental payment)
NR6 approval allows your property manager/tenant to withhold 25% of net rent (after expenses) instead of 25% of gross rent
File a Section 216 T1 return by June 30 each year to report actual net rental income and claim any refund
Deductible expenses: mortgage interest, property management fees, maintenance, property tax, insurance

Penalty risk: If you rent the property and do not have NR6 approval, but your property manager or tenant fails to withhold the required 25%, both you and the withholding agent may be liable to CRA for penalties and interest. Always set up withholding obligations before the first rental payment.

How to Use This Canadian Non-Resident Mortgage Calculator

Select your residency status, choose the province, and enter the property price. The calculator shows the minimum down payment required for your status, whether Non-Resident Speculation Tax (NRST) applies, your effective mortgage rate including any premium, and the monthly payment. The Advanced and Pro sections cover income qualification with foreign income, rental tax obligations, and the Section 116 clearance certificate process when you sell.

Key Non-Resident Rules at a Glance

Down payment: Foreign nationals typically need 35% minimum (vs 5–10% for Canadians)
NRST: Ontario charges 25% and BC charges 20% on foreign national purchases — citizens and PRs are exempt
Rate premium: Non-residents typically pay 0.25–1.0% above resident mortgage rates
Rental income: 25% withholding on gross rent by default — file Form NR6 to reduce this to 25% of net rent

Non-Resident Speculation Tax (NRST) by Province

The NRST is a one-time tax on the purchase price of residential property by foreign nationals. It applies at closing and is one of the largest additional costs for foreign buyers in Ontario and BC.

Ontario NRST: 25% of purchase price
→ Exempt: Canadian citizens, permanent residents, work permit holders (qualifying)
→ Applied to: foreign nationals buying residential property in Ontario

British Columbia NRST (Additional Property Transfer Tax): 20%
→ Exempt: Canadian citizens, permanent residents
→ Applied to: foreign nationals, certain foreign corporations

Other provinces: No NRST currently
→ Alberta, Québec, Manitoba, Saskatchewan, Atlantic provinces have no NRST
→ Foreign buyers face significantly lower upfront costs in these provinces

Down Payment Requirements by Status

Down payment requirements differ dramatically based on your residency status. Canadian citizens and permanent residents can buy with 5% down; foreign nationals need 35%.

Down payment comparison for an $800,000 property

Status	Min Down Payment	Mortgage Insurance	Typical Rate
Canadian Resident (citizen/PR)	$40,000 (5%)	CMHC insured	Market rate
Canadian Citizen Abroad	$40,000 (5%)	CMHC insured	Market rate
PR Living Abroad	$40,000 (5%)*	CMHC with conditions	Market rate
Work Permit (2+ yr)	$40,000–$280,000	CMHC eligible	Market ±0.25%
Foreign National	$280,000 (35%)	Not available	Market +0.25–1.0%

* Some lenders require PRs abroad to have Canadian income or plan to return to Canada within 12 months for CMHC-insured financing.

Rental Income Tax Obligations for Non-Residents

If you rent out your Canadian property while living abroad, the Income Tax Act requires withholding on rental income. Filing Form NR6 is the most important step to reduce this obligation.

Annual rental income of $36,000 — default vs NR6

Approach	Basis	Withholding	Net Received
Default (no NR6)	25% of $36,000 gross	$9,000/yr	$27,000 (before expenses)
With NR6 approved	25% of ~$19,800 net*	$4,950/yr	$31,050 (after expenses)
After T1 filing (actual)	Tax on actual net income	Varies	Potential refund from overpayment

* Estimated net income after $16,200 in typical expenses (mortgage interest, property management, maintenance, property tax, insurance). Actual amounts will vary.

Frequently Asked Questions

Yes. All major Canadian banks have non-resident mortgage programs. Foreign nationals typically need a 35% minimum down payment and will pay a rate premium of 0.25–1.0% above resident rates. You must qualify under the stress test, provide foreign income documentation, and pass a Canadian credit assessment. Canadian citizens and permanent residents living abroad face fewer restrictions and can access the same rates as Canadian residents.

No. Canadian citizens are exempt from NRST in both Ontario and BC regardless of where they live. Permanent residents are also generally exempt. The NRST applies specifically to foreign nationals — people who are not Canadian citizens or permanent residents. Work permit holders may be exempt in Ontario and BC under specific conditions — confirm with a real estate lawyer before purchasing.

Form NR6 is a CRA form that allows non-residents to have rental income tax withheld on the net amount (after expenses) rather than the gross rent. Without NR6, your property manager or tenant must withhold 25% of every rent payment. With NR6 approved, withholding is 25% of the estimated net income — typically much less than 25% of gross. You must also file an annual Section 216 T1 return by June 30. File NR6 before the first rental payment each year.

Under Section 116 of the Income Tax Act, when a non-resident sells Canadian property, the buyer is required to withhold 25% of the gross sale price and remit it to CRA unless the seller provides a clearance certificate. To get a clearance certificate, the seller applies to CRA (Form T2062) at least 90 days before closing, pays estimated tax on 50% of the capital gain, and CRA issues the certificate. Without this certificate, 25% of the entire sale price — not just the gain — is withheld, which can be many hundreds of thousands of dollars.

Generally, no — not at the time of purchase, because you do not yet have a rental history on the property. Some lenders may allow a rental offset approach where estimated rental income offsets some of the carrying cost for qualification purposes, but you still need to demonstrate personal income sufficient to service the debt. After the first year with a documented rental history, some lenders will include rental income in income qualification for subsequent refinancing.