Rental Expenses You Can Deduct in Canada
The original version of this post was written for a US audience. We rewrote it for Ontario, kept only facts we could source, and linked each one. Everything below comes from the CRA's rental income guide (T4036). This is general information, not legal or tax advice.
The CRA's rental income guide lists the expenses a landlord can deduct against rental income. Here they are in plain words, with a link to the source for each.
Deductible expenses
All quoted from the CRA guide:
- Mortgage interest: the interest on money you borrow to buy or improve your rental property. The principal isn't an expense.
- Property taxes for the period the property was available for rent.
- Insurance premiums on your rental property for the current year.
- Maintenance and repairs: labour and materials for minor repairs or maintenance.
- Utilities, such as gas, oil, electricity, water and cable, if you pay them.
- Advertising for your rental.
- Legal and accounting fees, for example to prepare leases or collect overdue rent.
- Management fees paid to a person or company to manage the property.
- Travel to collect rents, supervise repairs and manage your properties.
- Office expenses.
Current or capital
The big rule: current expenses (a short-term benefit, like painting) are deducted in the year, while capital expenses (a benefit lasting several years, like new siding) are claimed over time through capital cost allowance. And you can't use CCA to create or increase a rental loss. (Source)
Keep the receipts
You generally must keep your records for six years from the end of the tax year they relate to. (Source) Recording each expense against the right property, with its receipt, as it happens, is the easiest way to claim everything you're entitled to.
This is general information from the CRA's guide, not tax advice. Rules change; check the current guide or talk to an accountant.