Tax Accountant for Rental Property Owners in Ontario and Across Canada

It depends on the size and purpose of your portfolio. Most landlords report rentals personally on Form T776 at their marginal rate, and a corporation only helps once the rental profit you are keeping and reinvesting is large enough to matter. A corporation gives you limited liability against tenant claims, but rental income inside it is a specified investment business taxed at roughly 50% with no small-business deduction, so the deferral is smaller than owners expect. Moving properties in is not free either: Ontario land transfer tax applies on the transfer, and although a section 85 rollover on Form T2057 can defer the capital gain and recapture, the land transfer cost and legal fees can outweigh the benefit. Refinancing existing mortgages into the corporation can also trigger new lender and appraisal costs. For a multi-property owner building a real business, incorporation can add liability protection, estate-planning flexibility and the $1.25M Lifetime Capital Gains Exemption where the shares qualify. We model the break-even on your actual numbers and handle the incorporation, the rollover and the CRA accounts only when the answer is clearly yes.

Net rental income is fully taxable at your personal marginal rate, added to your other income on your T1 return. You report gross rent and deduct eligible expenses such as mortgage interest, property tax, insurance, repairs and property management fees on Form T776, and whatever is left is taxed like employment income, which in Ontario can reach 53.53% at the top. There is no separate low rate for rental income unless it is earned in a corporation. If you own foreign rental property, you also report it on Form T1135 once its total cost exceeds $100,000.

Yes. Individuals report rental income and expenses on Form T776, the Statement of Real Estate Rentals, filed with your personal T1 return, and a separate T776 is completed for each property or co-ownership. Only a rental corporation files on a T2 instead. We prepare the T776 so every current-versus-capital and CCA figure is correct.

Not always. Capital cost allowance on the building lowers this year’s tax, but it cannot create or increase a rental loss, it is recaptured as fully taxable income when you sell, and claiming it on a property that was once your home can reduce your principal residence exemption. For many landlords the deferral is not worth the recapture, so we run the numbers before claiming a dollar.

Mortgage interest (not the principal), property tax, insurance, utilities you pay, repairs and maintenance, condo and property management fees, advertising for tenants, and professional fees. Capital improvements are not deducted immediately; they are added to the building or the correct CCA class and depreciated over time. The key is the current-versus-capital line, which is where CRA reviews most rental files.

A repair that restores something to its original condition, like fixing a furnace or patching a section of roof, is a current expense you deduct now. Work that betters the property or replaces an asset with something superior, like a full new roof, a renovated kitchen or an addition, is capital and is depreciated over time. Getting this wrong is the single most common trigger for a CRA rental reassessment.

When you sell, 50% of the capital gain is taxable and added to your income that year. Your gain is the sale price less your adjusted cost base and selling costs, so tracking capital improvements over the years matters, and any CCA you claimed is recaptured and taxed separately in full. A former principal residence may shelter part of the gain through the principal residence exemption.

Long-term residential rent is exempt, so you do not charge HST on it. Commercial rent is taxable at 13% in Ontario, and short-term rentals under 30 days are taxable supplies. If your taxable rents pass the $30,000 threshold you must register, charge and remit HST, and you can then claim input tax credits on related costs.

Yes. Short-term rental income is fully taxable and reported on Form T776, and because stays under 30 days are taxable supplies for HST, crossing $30,000 in Airbnb and other taxable revenue forces HST registration. You can deduct a fair share of expenses and claim input tax credits once registered. Ignoring the HST side is where most hosts get caught.

Under the rule in ITA 12(13), a residential property sold within 365 days of buying it is deemed flipped, so the entire profit is taxed as business income with no 50% capital gains treatment and no principal residence exemption. Limited exceptions apply for life events such as death, disability, divorce or a job relocation. We document your circumstances to defend the correct treatment.

A non-resident owner faces a 25% withholding tax on gross rent, remitted by the tenant or agent. By filing an NR6 undertaking the withholding can instead be based on net rental income, and by filing a section 216 return each year you report the rent on a net basis and claim mortgage interest, property tax and CCA, usually recovering most of the withholding. We handle the NR6 and the section 216 filings.

Possibly. The Underused Housing Tax is a 1% annual federal tax on vacant or underused residential property, aimed mainly at non-resident non-Canadian owners, but many Canadian owners such as certain corporations, partnerships and trusts must still file Form UHT-2900 even when no tax is owed. Penalties for not filing start high, so we confirm whether you must file and prepare the return.

Book a free consultation and you will know your exact fees within two minutes. Call 647-212-9559 or email info@gondaliyacpa.ca.