You lot claim rental income and expenses on Form T776. Include rent collected from tenants every bit rental income in the electric current tax year. Merits taxation deductions for any expenses related to your rental belongings. Mutual rental belongings expenses include habitation insurance, rut, hydro, water, and mortgage insurance. Merits the total amount of expenses if information technology is for a rental holding, simply merely a percentage if it is for part of your principal residence.

Rental belongings income tax

Electric current or uppercase expenses

Some expenses can exist deducted in full if information technology is spent to maintain the rental property, these expenses are chosen current expenses. for example, if you lot spend money to restore your property to its original condition, these expenses can be deducted in full. Other expenses which enhance the value of the property and has a long-lasting life has to be added to the value of the rental property and claim a majuscule cost assart on them over the business years, these expenses are called capital expenses. for example, if you upgraded the floors from carpet to hardwood to increase the value of your property, the expenses have to exist added to the value of the property and depreciated in time. For a ameliorate agreement of the differences between current or capital letter expenses, visit this TurboTax link.

Home Insurance

Deduct property insurance premiums paid towards coverage on your rental property. Deduct only the current twelvemonth's coverage, even if your premiums provide coverage for over a year. Deduct the remaining premiums in the year they provide insurance coverage for. Claim the full amount if yous are renting out a separate property or only a portion of information technology is part of your principal residence. If you paid $2,000 a year in insurance premiums for your rental property, you could merits the total amount on your tax render as long equally the rental holding is not your principal residence.

Advertising

Claim a tax deduction for fees paid towards advertising your rental property. Newspapers, websites, and merchandise publications are all good places to advertise and claim a tax deduction. Dissimilar belongings insurance and utilities, merits the total amount of advert since it relates fully to your rental holding. If yous spend $500 to advertise your vacant apartment in the newspaper for a month, yous can merits the full amount as an advertising expense on your revenue enhancement return.

Interest and Bank Charges

Deduct mortgage interest or loan interests yous borrow to finance the buy of your rental holding or to improve the belongings. Do not merits a taxation deduction for mortgage principal. Deduct funds borrowed to help finance improvements to your dwelling. Only merits a deduction for soft costs. The Canada Revenue Bureau defines soft costs as funds you borrow for structure, renovations, and upgrades to your rental suite to make it more suitable.

As well deduct fees related to obtaining your mortgages, such as the mortgage awarding, appraisement, and legal fees paid to your real estate lawyer. If y'all paid $two,000 to your real estate lawyer for closing costs, claim it on your revenue enhancement return to help commencement your rental income.

Property Taxes

Belongings taxes are determined past your province and nerveless by your municipality. Deduct property taxes paid to your municipality in the current year. Claim just the portion that relates to your rental property. For example, if you paid $3,000 in property taxes on your principal residence and yous rent out your basement apartment (representing 40 percent of the square footage of your abode), claim $one,200 on your revenue enhancement return.

Utilities

Utilities are a major expense for landlords. You tin claim a tax deduction for the portion of utilities related to your rental belongings or suite. Claim the total amount if you lot hire out the full belongings, or claim a portion if you rent out a suite in your master residence. Deduct the following utilities related to your property, if you pay for them: rut, hydro, water, and cablevision.

Office Expenses

Office expenses are pens, pencils, paper clips, stationery, etc. you cannot deduct uppercase expenses such as role equipment: computers, printers, chairs, desks, etc. Capital expenses should be claimed equally  CCA.

Repairs and Maintenance

You tin can deduct the cost of repairs in your rental belongings including labour. The expenses have to be current expenses such as repairing the belongings to the original status not improving the value of the holding. You cannot deduct a value for your own labour.

Salaries and Direction Fees

You can deduct amounts paid to your employees. you cannot deduct a salary for yourself. If you are an employer, you should deduct your contributions to the CPP and EI plans. Y'all can also deduct amounts paid to a tertiary party to manage your holding and amounts paid to a realtor to sell your property.

Travel

If your rental holding is in another municipality, y'all can deduct travel expenses you paid to collect the rent or to maintain the property. You can only deduct expenses related to your rental property simply not boarding and lodging.

TurboTax software offers an easy step-by-step process to claim your rental income and expenses. The software helps you lot fill the T776 form with your income tax render. Consider TurboTax Alive Assist & Review if you need further guidance, and become unlimited aid and communication as you do your taxes, plus a terminal review before yous file. Or, choose TurboTax Live Full Service* and take one of our tax experts do your render from start to stop.

*TurboTax Alive™ Full Service is not available in Quebec.