Prepare the information used for Form T776, Statement of Real Estate Rentals, by organizing records for each property. Keep income summaries, receipts and ownership documents together.
Identify any personal use and keep major purchases separate from everyday expenses. Your adviser will confirm which amounts apply to your rental activity and how they should be reported.
Property identification and ownership
- Property profile
The complete civic address, including postal code, and the number of rental units in the building.
- Ownership structure
Each owner’s percentage, including any share held by a spouse, common-law partner or business associate.
- Personal use
If you occupy a unit or rent part of your principal residence, record the space and periods used personally so expenses can be allocated appropriately.
Gross rental income
- Gross rents
Rent records for January 1 to December 31, including amounts received and amounts owing. Rental income is generally reported using the accrual method; your adviser can confirm whether the limited cash-method exception applies.
- Other related income
Utility reimbursements, laundry revenue, parking or storage fees and other amounts received from tenants.
- Special payments
Lease-cancellation payments and non-refundable advance deposits received during the year, with agreements showing what each payment covers.
Current operating expenses
Organize receipts and summaries of costs incurred to earn rental income. Include the following categories where applicable:
- Mortgage interest
Annual mortgage statements separating interest from principal. Principal repayments are not deductible; interest eligibility depends on the use of the borrowed funds.
- Property and school taxes
Annual municipal and school tax bills for the property.
- Insurance
Landlord or commercial-property insurance invoices.
- Utilities
Electricity, gas, oil, water and other utilities you pay under the rental arrangement.
- Repairs and maintenance
Routine plumbing repairs, painting, snow removal, lawn care and minor repairs. Exclude the value of your own labour and identify possible capital improvements separately.
- Management and condominium fees
Property-management, rental-agent and condominium or strata fees. Identify special assessments or amounts relating to capital work for separate review.
- Professional fees
Legal fees for preparing leases or collecting overdue rent, and accounting fees for preparing rental statements. Keep purchase and sale legal fees with the transaction documents.
- Advertising
Online rental listings, newspaper advertisements and local flyers used to find tenants.
Vehicle and travel records
Keep receipts and a mileage log showing total kilometres, rental-related kilometres and the purpose of each trip. Eligibility depends on the properties and the work performed.
- One rental property
Vehicle expenses generally require that the property is in the area where you live, that you personally perform some or all necessary repairs and maintenance, and that you transport tools or materials for that work. Trips only to collect rent do not qualify.
- Two or more rental properties
Reasonable trips to collect rent, supervise repairs or manage properties may also qualify when the properties are at least two different sites away from your principal residence.
Keep travel receipts for review. Rental travel does not include meals or accommodation, which the CRA treats as personal expenses in this context.
Major purchases, improvements and sales
- Renovations and appliances
Invoices for roofs, windows, furnaces, refrigerators, stoves, washers, dryers and other significant work or purchases. The facts determine whether a cost is a current repair or a capital expenditure; an improvement is not treated the same way as every replacement. Capital assets may be subject to capital cost allowance (CCA).
- Purchase and sale documents
The lawyer’s or notary’s closing agenda or settlement statement for any purchase or sale during the year, plus original purchase documents. These support the cost base, capital-gain calculation and other adjustments.
Discuss with your adviser
- Are any properties short-term rentals, such as Airbnb or Vrbo? Bring details of the rental periods and applicable registration, licensing and local compliance; non-compliance can affect deductions.
- Did you purchase or sell a property during the tax year?