Neither did I until recently.
If you pay or collect rent as agent for some one who is a non-resident, YOU are obliged to deduct 25% and send it to Revenue Canada!
At least that's what someone told me and that's what it seems to state HERE.
I am certainly no tax expert - but I do know of people collecting rent and managing apartments who may not know this. One is doing it for a buddy who has gone to Singapore for a few years.
If you file a special form, you can reduce the 25% deduction from Gross rent to Net rent (which I guess is after strata and expenses and property taxes), but you have to file a tax return for the year.
Like I said I am not a tax expert by any means, but if you know of someone either paying rent to someone who has moved or lives elsewhere or is managing their property, send them the link above, as they should get professional advice.
Ignorance of the law is not a defense.
Here it is in full:
International and Non-resident taxes > Common Topics > Rental income and non-resident tax
Filing and reporting requirements When you receive rental income from real property in Canada, the payer, such as the tenant or a property manager, has to withhold non-resident tax at the rate of 25% on the gross rental income paid or credited to you. The payer has to send the tax to the CRA on or before the 15th day of the month following the month the rental income is paid or credited to you.
The payer has to give you two copies of an NR4 slip showing the gross amount of rental income paid or credited to you during the year, and the amount of non-resident tax withheld. The payer also has to send us an NR4 return, as explained in Guide T4061, NR4 - Non Resident Tax Withholding, Remitting, and Reporting.
Generally, the non-resident tax withheld is considered your final tax obligation to Canada on the rental income. However, if you elect under section 216 of the Income Tax Act, you may pay less tax, and you may also receive a refund of some or all of the non-resident tax withheld. For more information, see Guide T4144, Income Tax Guide for Electing Under Section 216.
If you intend to elect under section 216, you may also want to consider having non-resident tax withheld on the net rental income instead of the gross amount. To do this, you and your agent (a resident of Canada who acts on your behalf regarding your Canadian rental income) have to complete Form NR6, Undertaking to File an Income Tax Return by a Non Resident Receiving Rent From Real Property or Receiving a Timber Royalty, and send it to us for approval.
If we approve your Form NR6, your agent has to withhold non resident tax at the rate of 25% on your net rental income (i.e., the amount of rental income available after the rental expenses have been paid). Your agent must send us the tax on or before the 15th day of the month following the month the rental income is paid or credited to you. If we approve your Form NR6, you must also file a section 216 income tax return for that year, even if you have no tax payable or you are not expecting a refund.
You should send us Form NR6 on or before January each year, or before the first rental payment is due. For more information, read the Important reminder about Form NR6, and see Guide T4144