Real estate is a big deal here in Vancouver. Tax accountants can help you whether you rent out a room in your home, rent your basement, or you have a rental property empire. Here are some common deductible expenses:
- Property taxes,
- Utility costs,
- Maintenance and repairs (see below),
- Management and strata fees,
- Mortgage interest (Principle payments are not deductible),
- Capital cost allowance (CCA).
Be careful with maintenance and repairs. Major repairs that are considered significant improvements to the land or building cannot be deducted in one year. They must be capitalized and claimed as Capital Cost Allowance (CCA).
Capital Cost Allowance (CCA) represents the depreciation expense on assets that you are allowed to claim for tax purposes. Different types of assets are added to separate CCA classes. Each class has a rate that is allowed to be deducted as an expense each year. In the first year, 50% of the regular CCA is allowed to be deducted.
Check out our Rental Income Tax Checklist which gives an overview of everything you need to claim rental income and expenses on your tax return.
For more information on rental property tax deductions in Canada, contact us to book a free consultation with the Cahillpro team.