If you earn money from renting out property in Canada, understanding CRA rental income guidelines in 2024 is essential for staying compliant and maximizing your tax deductions. Whether you’re a new landlord or a seasoned investor, reporting your rental earnings accurately can help you avoid audits and penalties from the Canada Revenue Agency (CRA).
In this guide, we’ll walk through everything you need to know about rental income reporting, including what qualifies as rental income, allowable expenses, common mistakes, and helpful tips for filing your 2024 return.
What Is Considered CRA Rental Income?
The CRA considers rental income as any amount earned from leasing out real estate properties such as apartments, homes, or commercial spaces. This income can come from:
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Long-term residential tenants
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Vacation rentals (e.g., Airbnb)
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Commercial tenants
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Shared accommodations
Whether you rent out one room or an entire property, any money you collect from tenants—excluding your principal residence—is taxable.
Types of Rental Income
It’s important to differentiate between gross rental income and net rental income:
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Gross rental income includes all payments received from tenants: rent, deposits used as rent, fees for parking, laundry, etc.
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Net rental income is your income after deducting eligible expenses like mortgage interest, repairs, and utilities.
Knowing this distinction helps you file your T776 (Statement of Real Estate Rentals) form accurately during tax season.
CRA Rental Income: What You Must Report
For 2024, landlords are required to declare:
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Total rental revenue collected
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Property expenses
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Capital cost allowance (CCA), if applicable
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Any rental losses incurred
These figures must be filed using the T776 form, which becomes part of your T1 General Tax Return.
Additionally, if you’re using online platforms (like Airbnb or VRBO), CRA receives reports from these services, so underreporting income could trigger an audit.
Allowable Expenses You Can Deduct
To lower your taxable rental income, the CRA permits deductions of reasonable expenses directly related to earning rental income. These include:
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Mortgage interest
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Property taxes
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Repairs and maintenance
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Insurance
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Advertising for tenants
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Management fees
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Utilities paid by you
It’s crucial to keep all invoices, receipts, and contracts to support these claims in case of a CRA review.
What About Capital Cost Allowance (CCA)?
Capital Cost Allowance (CCA) allows you to claim depreciation on your rental property. However, claiming CCA reduces your property’s adjusted cost base (ACB), potentially increasing your capital gains tax when you sell.
Many landlords consult with a tax advisor to assess whether claiming CCA is advantageous in the long run. If you’re unsure, it’s often better to avoid claiming it unless your rental business consistently generates losses.
Common Mistakes Landlords Make
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Failing to report all rental income
CRA cross-references rental platforms and banking records, making unreported income a risky mistake. -
Mixing personal and rental expenses
Only expenses directly related to earning rental income are deductible. -
Incorrectly claiming CCA
Claiming too much CCA can lead to large tax bills when the property is sold. -
Not keeping adequate records
CRA may audit past returns up to six years back. Keep detailed records of income and expenses.
Tax Implications for Co-Owners and Partnerships
If two or more people own a rental property, each must report their share of the income and expenses according to ownership percentage. Partnerships should file accordingly, and joint ownership must be clearly documented with both parties reporting rental earnings.
GST/HST Considerations
Residential rental income is usually exempt from GST/HST. However, commercial rentals and short-term stays may require GST/HST registration and remittance. Landlords offering furnished vacation rentals should check CRA rules or consult a tax advisor.
How to Report CRA Rental Income in 2024
Follow these steps to report rental income correctly:
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Complete Form T776
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Include the total gross income and deduct eligible expenses
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Transfer the net income/loss to your T1 General return
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Keep supporting documentation for at least six years
E-filing through CRA MyAccount or using certified tax software is the easiest way to submit.
Filing Deadlines and Late Penalties
The deadline to file personal income tax returns is April 30, 2025. If your rental activities are considered a business, and you’re self-employed, the deadline extends to June 15, 2025, but any balance owed is still due by April 30.
Late filings may result in a 5% penalty on unpaid taxes, plus 1% interest per month (up to 12 months). It’s best to file early and correctly to avoid these penalties.
Final Tips for Landlords
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Track income and expenses monthly
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Separate business and personal bank accounts
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Consult with a tax professional yearly
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Review CRA rental guidelines at least annually
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Use rental property accounting software
Conclusion
Understanding how CRA rental income works is vital for every landlord in Canada in 2024. From reporting requirements to deducting eligible expenses and navigating CCA decisions, keeping informed can help you stay compliant and reduce your tax burden. For those who want peace of mind and professional guidance, Tax Headaches offers specialized support for landlords navigating complex CRA rules.