When you own a rental property, you are required to report all rental revenue on the Statement of Real Estate Rentals schedule on your personal tax return. However, you are also able to deduct a variety of landlord expenses from your gross rental revenue and then pay tax only on the amount remaining. Here’s a list of some of the allowable deductions for B.C. landlords.
Types of tax deductions for B.C. landlords
The rental income tax deductions are the same for all of Canada’s provinces and territories. The following is a list of tax deductions that are available to all Canadian landlords.
- Home insurance
You can deduct the insurance premiums you pay for rental insurance. You can claim the full insurance amount if your rental home is separate from your primary residence, or you may claim the appropriate portion if its part of your primary residence. Contact your insurance provider to provider for assistance if needed.
- Costs
If you recently purchased the Property as a Rental Home, you may deduct some of the costs related to the Purchase. Fees like closing costs, condo fees, fees related to obtaining a mortgage and fees paid to your real estate lawyer.
- Property taxes
You can deduct the property taxes you paid to your municipality for the current year. If the rental property is part of your primary residence (e.g. Upper suite) you can deduct a portion of the Taxes only.
- Utility fees
You can deduct the full amount of the utility payments if they are paid by you as the landlord. Utilities include heat, hydro, water, cable, and internet. If the unit is part of your primary residence, you may deduct only a percentage of the Utility costs.
- Property management
You can deduct fees paid to property managers, maintenance personnel (gardeners, painters etc.) and others that you employed over the tax year to care for your rental property.
- Advertising
You can deduct the cost of advertising your rental properties as well as finders’ fees if you hired a Tenant-find service.
How to claim rental property tax deductions
Its easier to deduct these than you may think! All are included on Form T776 which is the Statement of Real Estate Rentals.
We suggest getting in touch with an Accountant or Tax Expert to assist with the filing of your taxes.
Pemberton Holmes was rated the #1 Property Management company in the Greater Victoria Area. If you have any questions regarding the process of renting out your property, give us a call. One of our licensed managers would be happy to assist. 250-478-9141. Are you looking for a new place to call home? Contact our Relocation Department at Ilanap@thepropertymanagers.ca – These are stressful times and looking for a new rental home is already challenging; it doesn’t need to be more hectic. We’ve created a new service to help you find the right home or apartment that meets your personal and financial needs. Let us take some of the stress off you. Get in touch today and let us advocate on your behalf. Sources:
https://naickercpa.ca/resource/personal/what-you-should-know-about-rental-property-tax-deductions-in-bc/ https://www.canadianrealestatemagazine.ca/expert-advice/how-do-rental-property-tax-deductions-work-in-canada-335159.aspx Photo Credit: Markus Wrikler (Unsplash)
