Rental income tax calculator for BC and Alberta
In 2026, rental income is taxed like your other income. Take gross rents, subtract deductible costs (mortgage interest but not principal, property tax, insurance, repairs), remove the personal-use share, apply your ownership share and add the result to your income. On an $85,000 salary, each $1,000 of net rent adds about $282 of tax in BC and $305 in Alberta.
2026 ratesBC and AlbertaRuns in your browserSummary free, no sign-upSources checked 28 Oct 2026Estimate only
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Your 2026 estimate
$3,390
Estimate only. It leaves out CCA, principal residence issues, non-resident rules, corporations, other provinces and many credits.
Your $12,020 of net rental income adds about $3,390 of income tax in BC, about 28 cents of each dollar.
- Owing over $3,000: instalments may follow. Your net tax owing is about $3,390. If it is over $3,000 again in 2027, CRA can ask for quarterly instalments. If you also owed over $3,000 for 2025 or 2024, they were already due for 2026.
General information, not tax advice. Based on 2026 figures; your return may differ.
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Renting by the night: four more things to check
- GST: once your short-term rental revenue passes $30,000 in a 12-month period, you register and charge 5% GST. Until then, a registered booking platform generally collects GST on stays booked through it.
- BC: 8% PST plus up to 3% MRDT on stays under 27 days (plus 2.5% in Vancouver). A registered platform collects them on its bookings; you stay jointly liable.
- Alberta: a 6% tourism levy on stays under 28 days booked after March 31, 2026 (4% if booked earlier). Whoever collects the guest's payment remits it.
- Local rules: on days a short-term rental breaks provincial or city rules, such as having no required licence or registration, its expenses can't be deducted (Income Tax Act s.67.7). This calculator assumes you comply.
2026 rates used in this estimate2026 tax year (return filed in spring 2027). From our tax engine; each figure links to its source, checked 28 Oct 2026.
| Figure | 2026 value | Source, checked |
|---|---|---|
| Tax on net rent | Your marginal rate, from the federal and provincial brackets below. No separate rental rate, no CPP or EI | CRA Guide T4036, 28 Oct 2026 |
| Basic personal amounts and credit rates | Federal $16,452 (less from $181,440 of net income); BC $13,216; Alberta $22,769. Credits at 14%, 5.6% and 8% | CRA 2026 rates, B.C. credits, Alberta, 28 Oct 2026 |
| BC tax reduction | $690, less 3.56% of net income over $25,570 | B.C. credits, 28 Oct 2026 |
| Age and pension income amounts | Federal $9,208 less 15% of net income over $46,432; BC $5,927 over $44,119; Alberta $6,345 over $47,234. Pension income amount up to $2,000 federal, $1,000 BC, $1,753 Alberta | CRA TD1, TD1BC, TD1AB 2026, 28 Oct 2026 |
| CPP and EI on a job (credits) | CPP 5.95% of pay from $3,500 to $74,600, CPP2 4% to $85,000; EI 1.63% to $68,900; Canada employment amount $1,501. None on rent | CRA CPP, CRA EI, 28 Oct 2026 |
| Instalments | May be needed when net tax owing is over $3,000 in 2026 and in 2025 or 2024 | CRA Who has to pay, 28 Oct 2026 |
| Dates for the 2026 return | File and pay by April 30, 2027; self-employed file by June 15, 2027 | CRA important dates, 28 Oct 2026 |
| Keeping records | 6 years from the end of the tax year they relate to | CRA Keeping records, 28 Oct 2026 |
| Mortgage and loan fees | Deducted over 5 years (20% a year), not in this estimate | CRA Guide T4036, line 8710, 28 Oct 2026 |
| Capital cost allowance (CCA) | Not claimed here. Optional: buildings usually Class 1 (4%), furniture and appliances Class 8 (20%); can’t create or increase a rental loss | CRA Guide T4036, chapter 4, 28 Oct 2026 |
| Short-term rental | Rented or offered for rent for less than 90 consecutive days | CRA Guide T4036, ITA s.67.7, 28 Oct 2026 |
| GST on short-term stays | 5% GST once short-term rental revenue is over $30,000 in any 12-month period | CRA platform threshold, 28 Oct 2026 |
| BC PST and MRDT | 8% PST plus up to 3% MRDT in participating areas; 2.5% Major Events MRDT in the City of Vancouver to January 31, 2030; not on stays of 27 days or more with the same guest | gov.bc.ca Accommodation (21 May 2026), 28 Oct 2026 |
| Alberta tourism levy | 6% tourism levy on stays booked after March 31, 2026 (4% if booked earlier); not on stays of 28 days or more with the same guest | alberta.ca Tourism levy, 28 Oct 2026 |
| Taxable income | Rate |
|---|---|
| Up to $58,523 | 14% |
| $58,523 to $117,045 | 20.5% |
| $117,045 to $181,440 | 26% |
| $181,440 to $258,482 | 29% |
| Over $258,482 | 33% |
| Taxable income | Rate |
|---|---|
| Up to $50,363 | 5.6% |
| $50,363 to $100,728 | 7.7% |
| $100,728 to $115,648 | 10.5% |
| $115,648 to $140,430 | 12.29% |
| $140,430 to $190,405 | 14.7% |
| $190,405 to $265,545 | 16.8% |
| Over $265,545 | 20.5% |
| Taxable income | Rate |
|---|---|
| Up to $61,200 | 8% |
| $61,200 to $154,259 | 10% |
| $154,259 to $185,111 | 12% |
| $185,111 to $246,813 | 13% |
| $246,813 to $370,220 | 14% |
| Over $370,220 | 15% |
Brackets: CRA 2026 federal rates, B.C. 2026 rates and Alberta 2026 rates, checked 28 Oct 2026. The same engine runs our income tax calculator.
Estimate only, general information, not tax advice. Your situation may differ; book a free 15-minute call before acting. The calculator uses the 2026 federal, BC and Alberta brackets and the basic personal, Canada employment, age and pension income amounts from our income tax engine. It leaves out capital cost allowance (CCA), mortgage fees spread over five years, the short-term rental non-compliance rule, GST, PST and levy amounts, loss carry-overs, other credits and deductions, and other provinces. Box 16 and box 18 are taken as the 2026 amounts on your pay.
Your 2026 rental income, line by line
From your rents to your balance: Form T776, the personal-use share, your share as a co-owner and the income tax the rent adds, with the CRA line number where there is one and a sentence on why each figure is there. It follows every change you make above.
| Line | Amount |
|---|---|
| Rental income (Form T776) | |
| Gross rentsAll rent for the whole property, before costs. | $21,600 |
| Costs for the whole propertyInterest, property tax, insurance, repairs, utilities, fees and other shared costs. | −$29,600 |
| Personal-use share added back70% of $29,600 is your own use, so it isn’t deductible. | +$20,720 |
| Costs for the rented part onlyDeducted in full: they relate only to the rented part. | −$700 |
| Net rental income, whole propertyGross rents less deductible costs, before CCA. | $12,020 |
| Your share100% ownership: each co-owner reports their own share. | $12,020 |
| Income tax | |
| Income tax without the rentalOn your other income alone, at 2026 rates. | $14,627 |
| Income tax with the rentalThe same 2026 engine, with your share of the rent added. | $18,017 |
| Federal partFrom the federal brackets, 14% to 33%. | +$2,464 |
| BC partFrom the BC brackets. | +$926 |
| Extra income taxThe difference. There’s no CPP or EI on rent. | $3,390 |
| Marginal tax rateTax on your next dollar of rent. | 28.2% |
| Your 2026 return | |
| Income tax on all your incomeFederal plus BC, with your share of the rent. | $18,017 |
| Tax deducted from your job (T4 box 22)Estimated: the tax on your pay alone. Enter box 22 to replace it. | −$14,627 |
| Estimated balance owingDue April 30, 2027. | $3,390 |
What this means
- 70% of the whole-property costs ($20,720) is personal and isn't deductible. Costs only for the rented part are deductible in full.
- No one takes tax off rent, so the tax it adds is due with your return.
- Rental income has no CPP or EI, so only income tax goes up.
What to do next
- Report the rent on Form T776 with your 2026 return, by April 30, 2027.
- Keep receipts and statements for six years, with how you worked out the personal-use share.
- CCA is optional. It can’t create or increase a rental loss, and it can be taxed back as recapture when you sell.
- Want it done for you? Have us prepare your 2026 return.
Want a second look before you file? See the personal membership.
Key figures for 2026
The rules and rates the calculator and this page use for the 2026 tax year (returns filed in 2027). Net rental income is taxed at your ordinary rates; there is no separate rental tax rate.
| Figure | Rule or rate | Source, checked |
|---|---|---|
| Tax on net rental income | Your marginal rate: 14% to 33% federal, plus 5.6% to 20.5% in BC or 8% to 15% in Alberta | CRA, gov.bc.ca, alberta.ca 2026 rates; 28 Oct 2026 |
| Mortgage | Interest is deductible; principal is not. Loan fees are deducted over 5 years (20% a year) | CRA Guide T4036, line 8710; 28 Oct 2026 |
| HELOC or refinancing | Interest is deductible only on the money used for the rental, not on money taken out for personal use | CRA Guide T4036, line 8710; 28 Oct 2026 |
| Personal use | Deduct only the rented share of whole-property costs, by floor area or rooms; costs only for the rented part in full | CRA Guide T4036, personal portion; 28 Oct 2026 |
| Co-owners | Each reports their ownership share of the net rental income or loss | CRA Guide T4036, line 9369; 28 Oct 2026 |
| Travel | One rental near home: only to carry tools and materials for your own repairs. Two or more at different sites: also to collect rent and manage | CRA Guide T4036, lines 9200 and 9281; 28 Oct 2026 |
| Capital cost allowance (CCA) | Optional. Buildings usually 4% a year (Class 1), furniture and appliances 20% (Class 8). Can't create or increase a rental loss | CRA Guide T4036, chapter 4; 28 Oct 2026 |
| Records | Keep receipts and statements for six years from the end of the tax year | CRA Guide T4036; CRA Keeping records; 28 Oct 2026 |
| Instalments | May be needed when net tax owing is over $3,000 in 2026 and in 2025 or 2024 | CRA Who has to pay; 28 Oct 2026 |
| Short-term rental | Rented or offered for less than 90 days in a row. Expenses denied for days it breaks local rules | Income Tax Act s.67.7; CRA Guide T4036; 28 Oct 2026 |
| GST on short-term stays | Register once revenue passes $30,000 in any 12-month period; platforms collect for hosts who aren't registered | CRA platform-based short-term accommodation; 28 Oct 2026 |
| BC PST and MRDT | 8% PST plus up to 3% MRDT; 2.5% Major Events MRDT in Vancouver until January 31, 2030 | gov.bc.ca Accommodation (21 May 2026); 28 Oct 2026 |
| Alberta tourism levy | 6% for stays booked after March 31, 2026 (4% before) | alberta.ca Tourism levy; 28 Oct 2026 |
How it's calculated
The steps follow Form T776, Statement of Real Estate Rentals, which goes with your 2026 return.
- Gross rents. All the rent for the whole property for the year.
- Whole-property costs, less the personal part. Mortgage interest, property tax, insurance, repairs, utilities you pay, condo or strata fees and other shared costs are added up. Your personal-use share of them comes off, because it isn't deductible.
- Rented-part costs. Management, advertising, legal and accounting, interest on a loan used only for the rented part, travel and other costs that relate only to the rented part are deducted in full.
- Net rental income or loss. Gross rents minus the deductible costs, for the whole property, before CCA.
- Your share. If you co-own the property, multiply by your ownership share.
- The tax it causes. Your 2026 income tax is worked out twice with the same engine as our income tax calculator: once with your other income alone and once with your share of the rental added. The difference is the extra income tax. A loss makes it negative: your tax goes down.
- Marginal rate. The tax on one more dollar of income, with the rental included.
- Refund or balance owing. Income tax on all your income, minus T4 box 22, tax deducted on other slips and instalments paid. Blank boxes are taken as the tax on your other income alone, so the balance is what the rent adds. Net tax owing over $3,000 brings the instalment warning.
| Taxable income | Rate |
|---|---|
| Up to $58,523 | 14% |
| $58,523 to $117,045 | 20.5% |
| $117,045 to $181,440 | 26% |
| $181,440 to $258,482 | 29% |
| Over $258,482 | 33% |
| Taxable income | Rate |
|---|---|
| Up to $50,363 | 5.6% |
| $50,363 to $100,728 | 7.7% |
| $100,728 to $115,648 | 10.5% |
| $115,648 to $140,430 | 12.29% |
| $140,430 to $190,405 | 14.7% |
| $190,405 to $265,545 | 16.8% |
| Over $265,545 | 20.5% |
| Taxable income | Rate |
|---|---|
| Up to $61,200 | 8% |
| $61,200 to $154,259 | 10% |
| $154,259 to $185,111 | 12% |
| $185,111 to $246,813 | 13% |
| $246,813 to $370,220 | 14% |
| Over $370,220 | 15% |
The personal-use rule
When you rent out part of the home you live in, you can deduct only the share of whole-property costs that belongs to the rented part. CRA accepts splitting by floor area or by number of rooms: rent 3 of 12 rooms and you deduct 25% of the property tax, power and insurance. Costs that relate only to the rented part, such as advertising for a tenant or repairs inside the suite, are deductible in full. If you use a property yourself for part of the year, such as a cabin rented out in summer, split the shared costs on a reasonable basis, such as the time it is rented compared with the time you use it.
Renting below market rent to family or a roommate who chips in for groceries is usually a cost-sharing arrangement, not a rental: there's no rental income to report and no expenses or loss to claim.
Two worked examples for 2026
Example 1: a basement suite in BC, with a personal-use share
You earn a $85,000 salary and rent the basement suite of your BC home for $1,800 a month ($21,600 a year). The suite is 30% of the home's floor area, so your personal-use share is 70%. Whole-home costs are $29,600: mortgage interest $18,000, property tax $4,500, insurance $2,000, utilities $3,600 and repairs $1,500. You can deduct 30% of them, $8,880. Suite-only costs are $700 (an ad for $100 and $600 of repairs inside the suite), deductible in full.
Net rental income is $21,600 − $8,880 − $700 = $12,020. Your taxable income rises from $83,873 to $95,893, which stays in the 20.5% federal and 7.7% BC brackets, so the rent adds 28.2% of $12,020: $3,390 of income tax ($2,464 federal and $926 BC).
| Line | Amount |
|---|---|
| Gross rents | $21,600 |
| Whole-home costs, 30% deductible | −$8,880 |
| Suite-only costs | −$700 |
| Net rental income (100% yours) | $12,020 |
| Income tax without the rent | $14,627 |
| Income tax with the rent | $18,017 |
| Extra income tax | $3,390 |
| Marginal tax rate | 28.2% |
| Balance owing on the return, if box 22 covers the salary | $3,390 |
Because the suite is a small part of the home, there are no structural changes and no CCA is claimed, CRA usually lets the whole home keep its principal residence status.
No tax is taken off rent. If your employer deducted the tax on your salary alone, about $3,390 is due with your return by April 30, 2027. That's over $3,000, so if it happens again in 2027, CRA can ask for quarterly instalments.
Example 2: a condo in Alberta co-owned 50/50
You and your spouse each own half of an Alberta condo rented to a long-term tenant for $2,200 a month ($26,400 a year). Costs are $27,900: mortgage interest $15,600, condo fees $6,000, property tax $2,700, repairs $1,500, accounting $1,500 and insurance $600. Neither of you uses it, so there's no personal-use share.
The condo has a net rental loss of $1,500, and each of you reports half: −$750. You earn a $70,000 salary, so your taxable income falls from $69,335 to $68,585, still in the 20.5% federal and 10% Alberta brackets. Your income tax goes down by 30.5% of $750: $229 ($154 federal and $75 Alberta). Your spouse works out their own half the same way at their own rate.
| Line | Whole condo | Your 50% |
|---|---|---|
| Gross rents | $26,400 | $13,200 |
| Deductible costs | −$27,900 | −$13,950 |
| Net rental loss | −$1,500 | −$750 |
| Your income tax without the condo | – | $10,813 |
| Your income tax with the condo | – | $10,584 |
| Change in your income tax | – | −$229 |
A loss like this is allowed because the condo is rented at market rent with a reasonable expectation of profit. CCA can't be claimed this year: it can't create or increase a rental loss.
If your employer deducted the tax on your salary alone, that $229 comes back as a refund after you file.
What landlords can deduct, and what they can't
The five areas where landlords most often get it wrong, from CRA Guide T4036 and CRA's current or capital expenses page. Keep the receipts for each: CRA can refuse expenses you can't support.
Interest
- Interest on money borrowed to buy or improve the rental, from your lender's annual mortgage statement
- HELOC interest, only for the money used for the rental
- Principal repayments, and interest on money refinanced for personal use, such as a down payment on your own home
Appraisal, broker and other loan fees are deducted 20% a year over five years.
Repairs or improvements
- Repairs that restore: painting, fixing wooden steps, re-shingling a worn roof with similar shingles
- Improvements and separate assets: a new fridge, vinyl siding, concrete steps, a roof that's better than the original
Improvements are added to the property's cost and claimed over time as CCA. Not sure? Use the three-question helper in the calculator.
Utilities
- Gas, oil, electricity, water and cable, if the rental arrangement says you pay them
- Utilities the tenant pays, and your own share of a home you also live in
Travel
- One rental in your area: only trips to carry tools and materials for repairs you do yourself
- Two or more rentals at different sites away from home: also to collect rent, supervise repairs and manage
- Collecting rent from one property, and board and lodging on any trip
A home office for a landlord
Generally limited. CRA's rental guide allows office supplies such as pens, paper and stamps, a separate phone line for the rental and the rental share of cellphone airtime. Desks, chairs, filing cabinets and computers are capital items, claimed as CCA. The guide has no line for a share of your home's costs as an office, so talk to us before claiming one.
If you rent by the night
For income tax, a short-term rental works the same way as a long-term one: rents minus deductible costs, with the personal-use split if you also stay there. Four extra sets of rules apply on top.
- GST and the booking platform. A stay of less than a month is generally taxable for GST. Once your revenue from short-term stays is more than $30,000 in any 12-month period, you register for GST and charge 5% on your stays, including those booked through a platform. While you're not registered, a booking platform registered under CRA's accommodation platform rules charges and collects GST on the stays booked through it. Direct bookings have no GST until you register.
- BC: PST and MRDT. Short-term accommodation in BC carries 8% PST and, in participating areas, up to 3% Municipal and Regional District Tax (MRDT). The City of Vancouver adds a 2.5% Major Events MRDT until January 31, 2030. Stays of 27 days or more with the same guest are exempt. If every booking goes through an online marketplace facilitator registered to collect PST and MRDT, you generally don't register yourself, but you remain jointly liable for tax it doesn't collect.
- Alberta: the tourism levy. Alberta charges a 6% tourism levy on accommodation booked after March 31, 2026 (4% on bookings made earlier). Since October 1, 2024, whoever collects payment from the guest, the host or the online broker, registers and remits it. Stays of 28 days or more with the same guest are exempt.
- Local rules and section 67.7. Since the 2024 tax year, the Income Tax Act denies the expenses of a short-term rental for the days it's non-compliant: where the province or city doesn't allow it, or requires a registration, licence or permit you don't have. The non-compliant amount is the short-term rental's expenses × non-compliant days ÷ days it was a short-term rental. The rent stays fully taxable. This calculator assumes your rental complies.
Local short-term rental rules are general information here, not legal advice; we work alongside your lawyer where a bylaw or strata rule is in question. For the detail, see our guides to GST, PST and levies, deductions and CCA and BC and Alberta short-term rental rules, or the GST/HST and PST calculator.
Five things this calculator leaves out
Each of these can change your rental tax. They depend on facts a quick calculator can't see, so they're left for your return.
Capital cost allowance (CCA)
CCA is the tax version of depreciation. You can't deduct the cost of the building, furniture or appliances in the year you buy them; instead you deduct part of the cost each year: usually 4% a year for a building (Class 1) and 20% for furniture and appliances (Class 8). Land never qualifies.
It's optional: any amount up to the maximum, or none. It can't create or increase a rental loss. And when you sell, CCA you claimed can come back into your income as recapture, if the building sells for more than the cost left on your books. On your own home, claiming CCA on a suite can also cost you part of the principal residence exemption.
Repairs or capital costs
A repair (a current expense) restores the property to how it was and usually comes back after a while: painting the outside of a wooden house, or fixing wooden steps. It's deducted in the year you pay it. A capital cost gives a lasting benefit or makes the property better than it was: vinyl siding, concrete steps to replace wooden ones, a new fridge (a separate asset). It's added to the property's cost and claimed over time as CCA.
Repairs to make a used property you just bought ready to rent are capital, even if they'd otherwise be repairs. Enter only current repairs in the calculator.
The principal residence exemption
When you sell the home you live in, the principal residence exemption can make the gain tax-free. Renting part of it doesn't usually change that if the rented part is small, you make no structural changes and you claim no CCA on it. A rental property you don't live in has a taxable capital gain when you sell it; see our capital gains tax guide.
Changing your home to a rental is treated as selling it at fair market value. You can elect under subsection 45(2) to avoid that and keep designating it as your principal residence for up to four years, but then you can't claim CCA on it.
Non-residents
If you don't live in Canada, different rules apply: 25% non-resident tax is withheld from the gross rents, and you can choose to file a separate return on the net rental income under section 216 (CRA guide T4144). This calculator is for residents of BC and Alberta.
Losses carried to other years
A rental loss first reduces your other income for the same year. If the loss is bigger than all your other income, the unused part generally becomes a non-capital loss that can be carried back 3 years or forward 20 years. This calculator only looks at 2026 and tells you when part of a loss isn't used.
| Test | Capital cost (claimed as CCA) | Repair (deducted this year) |
|---|---|---|
| Lasting benefit? | Vinyl siding on a wooden house | Painting the outside of a wooden house |
| Improves or restores? | Wooden steps replaced with concrete steps | Repairing the wooden steps |
| Part of the building or a separate asset? | A new refrigerator | Rewiring, if it doesn't improve the building |
| Cost compared with the property's value | Large compared with the property's value | Ordinary upkeep, even if it was put off and done at once |
Source: CRA, Current expenses or capital expenses, checked 28 Oct 2026. The value test is used only when the first three don't decide it.
Who this is for and what it leaves out
Who this is for
- Residents of BC or Alberta who rent out a suite, a room, a condo or a house and report it as rental income on Form T776.
- Co-owners, such as spouses who own a rental 50/50, who want to see their own share and their own tax.
- Landlords with a job or a pension who want to know what they'll owe or get back at tax time.
- Short-term rental hosts who want the income tax and a checklist of the GST, PST, MRDT and levy rules.
What it leaves out
- CCA, recapture and terminal losses, the principal residence exemption and capital gains on a sale.
- Non-residents, rentals run as a business (with meals, cleaning or other services), and rentals held in a corporation or partnership.
- Loss carry-overs, the short-term rental non-compliance rule, GST, PST and levy amounts, and credits other than the basic, age and pension ones.
- Other provinces, self-employment income, RRSP and other deductions (use the income tax calculator), and CPP or EI overpaid.
Sources, checked 28 Oct 2026
- CRA: Guide T4036, Rental Income, Rev. 25 (expenses, interest, travel, office, utilities, personal portion, co-owners, losses, CCA, records, principal residence and change in use)
- CRA: Current expenses or capital expenses
- CRA: Form T776, Statement of Real Estate Rentals
- Income Tax Act, section 67.7: non-compliant short-term rentals (current to 30 Sep 2026)
- CRA: Platform-based short-term accommodation threshold amounts ($30,000)
- CRA: Platform-based short-term accommodation, who charges and collects
- CRA: Line 25200, non-capital losses of other years
- CRA: Guide T4144, electing under section 216 (non-residents)
- CRA: Required tax instalments, who has to pay
- CRA: Important dates for individuals
- CRA: Keeping records, how long
- B.C.: PST and MRDT on accommodation (publication date 21 May 2026)
- Alberta: Tourism levy
- CRA: 2026 tax rates and income brackets
- B.C.: personal income tax rates
- Alberta: personal income tax
Rental on your return? Talk it through.
Book a free 15-minute call by video or phone. We'll look at your rental, the costs you have and what applies to you, such as CCA or the personal-use split. Pricing is explained on the personal membership page. We confirm your price before any work starts.
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Rental income tax, answered
How is rental income taxed in Canada?
Net rental income is added to your other income and taxed at your normal federal and provincial rates; there is no separate rental tax rate. Net rental income is your gross rents minus deductible expenses, less any personal-use share, times your ownership share. In 2026, on an $85,000 salary, each $1,000 of net rent adds about $282 of income tax in BC and $305 in Alberta. There's no CPP or EI on rental income.
Can I deduct my mortgage payments on a rental property?
Only the interest. Interest on money borrowed to buy or improve the rental property is deductible; the part of each payment that repays principal is not. Fees to get the mortgage, such as appraisal and broker fees, are deducted over five years. Interest on money you took out of the property for personal use isn't deductible.
How do I split expenses when I rent part of my home?
Deduct the rented share of costs for the whole home, such as property tax, insurance, utilities and mortgage interest, using floor area or the number of rooms. Costs that relate only to the rented part, like advertising or repairs inside the suite, are deductible in full. Your personal share isn't deductible. Enter the part you use yourself as the personal-use share.
How do co-owners report rental income?
Each co-owner reports their share of the net rental income or loss, based on their share of ownership, and the share normally stays the same each year unless ownership changes. Each co-owner's return also shows the gross rents for the whole property. Only an owner can deduct the interest on the mortgage. Enter your ownership share, such as 50%, and the calculator works out your part.
Can a rental loss reduce my other income?
Yes, if you rent at market rates and expect to make a profit, a rental loss reduces your other income, such as your salary, and so your tax. Renting to family for less than market rent doesn't allow a loss. CCA can't create or increase a loss. If the loss is more than your other income, the rest can generally be carried to other years.
Should I claim CCA on my rental property?
It depends. Capital cost allowance (CCA) lets you deduct the cost of the building, furniture and appliances over several years. It's optional, it can't create or increase a rental loss, and CCA you claim can be taxed back as recapture when you sell. Claiming CCA on part of your own home can also affect your principal residence exemption. We look at these before any claim.
What's the difference between a repair and a capital expense?
A repair restores the property to its original condition and usually recurs, such as painting or fixing wooden steps; it's deducted in the year you pay it. A capital expense gives a lasting benefit or improves the property, such as new vinyl siding, concrete steps or a new fridge; it's added to the cost and claimed over time as CCA.
Do I charge GST on a short-term rental?
Once your short-term rental revenue is more than $30,000 in any 12-month period, you register for GST and charge 5% on stays of less than a month. Until then, a registered booking platform generally collects GST on stays booked through it. In BC, short-term stays also carry 8% PST and up to 3% MRDT; Alberta charges a 6% tourism levy on stays booked after March 31, 2026.
Will I owe tax at tax time because of my rental income?
Usually, yes. No one takes tax off rent, so the tax on your net rental income is generally due with your 2026 return, by April 30, 2027. If your net tax owing is more than $3,000 in 2026 and was also more than $3,000 in 2025 or 2024, CRA expects quarterly instalments. With a job, you can ask your employer on Form TD1 to deduct extra tax from each pay.
Is a new roof or a new fridge a repair or a capital expense?
A new fridge is capital: CRA treats it as a separate asset, so its cost is claimed over time as CCA. A roof is part of the building, so it depends on the work. Replacing worn shingles with similar ones restores the roof and is usually a repair. A roof that lasts much longer or is better than the original is usually capital. Repairs to get a used property you just bought ready to rent are capital.