If you are renting property in British Columbia, whether that is a separate property or one or more rooms in your home, there are many expenses that can be deducted when doing your personal tax planning and calculating your rental income.
Some of the basic expenses you can claim are:
• Mortgage interest
• Property taxes
• Utility costs
• House insurance
• Maintenance costs
• Property management fees
Here are a few more deductions that you will want to know about:
If you have to travel to collect rents, supervise repairs, and/or manage your properties, you may be able to claim expenses if you meet these requirements:
For one rental property:
• Receiving income from only one rental property in the general area where you live
• Doing part, or all, of the necessary repairs and maintenance
• Having moving expenses to transport tools and materials
• You CANNOT deduct motor vehicle expenses to collect rent for one property
For two or more rental properties:
• In addition to what was listed above, you can also claim expenses when travelling to:
o Claim rent
o Supervise repairs
o Generally manage the properties
These can generally be used to reduce income from other sources. However, if the loss exceeds the income, and cannot be deducted in the current year, if becomes a non-capital loss.
Capital Cost Allowance
Capital Cost Allowance (the depreciation that can be expensed) may be claimed based on the purchase price of the building, furniture, fixtures, etc, but not the land. Be careful when claiming this because it may result in the recapture of the CCA when the property is sold.
Another expense that you can claim is any accounting fees charged to oversee your rental properties and help make sense of the tax laws. It’s highly recommended for anyone looking for tax services in Port Moody to contact Naicker and Associates.