The two basic types of expenses are:

• current expenses
• capital expenses

Expenses you can deduct:

Line 8521 – Advertising: You can deduct expenses for advertising, including advertising in Canadian newspapers and on Canadian television and radio stations. You can also include any amount you paid as a finder's fee.

Line 8690 – Insurance: You can deduct the premiums you pay on your rental property for the current year. If your policy gives coverage for more than one year, deduct only the premiums related to the current year. Deduct the remaining premiums in the year(s) to which they relate.

Line 8710 – Interest and bank charges: You can deduct the interest charge on money you borrow to buy or improve your rental property. If you have interest expenses that relate to the construction or renovation period, see Construction soft costs.

Line 8810 – Office expenses: You can deduct the cost of office expenses. These include small items such as pens, pencils, paper clips, stationery and stamps. Office expenses do not include capital expenditures to acquire capital property such as calculators, filing cabinets, chairs and a desk. These are capital items.

Line 8860 – Professional fees (includes legal and accounting fees): You can deduct fees for legal services to prepare leases or collect overdue rents. If you incur legal fees to buy your rental property, you cannot deduct them from your gross rental income. Instead, divide the fees between land and building and add them to their respective cost.

Line 8871 – Management and administration fees

You can deduct the amounts paid to a person or a company to manage your property. You can also deduct amounts paid or payable to agents for collecting rents or finding new tenants.

Line 8960 – Repairs and maintenance: You can deduct the cost of labour and materials for any minor repairs or maintenance done to property you use to earn income. You cannot deduct the value of your own labour. You cannot deduct costs you incur for repairs that are capital in nature. However, you can claim CCA.

Line 9060 – Salaries, wages and benefits: You can deduct amounts paid or payable to superintendents, maintenance personnel and others you employ to take care of your rental property. You cannot deduct the value of your own services.

Line 9180 – Property taxes: You can deduct property taxes you incurred for your rental property for the period it was available for rent. For example, you can deduct property taxes for the land and building where your rental property is situated.

Line 9200 – Travel: You can deduct travel expenses you incur to collect rents, supervise repairs and manage your properties. Travel expenses include the cost of getting to your rental property but do not include board and lodging, which we consider to be personal expenses. To claim the travel expenses you incur, you need to meet the same requirements discussed at Line 9281 – Motor vehicle expenses.

Line 9220 – Utilities: You can deduct expenses for utilities, such as gas, oil, electricity, water and cable, if your rental arrangement specifies that you pay for the utilities of your rental space or units.

Line 9281 – Motor vehicle expenses (not including capital cost allowance): You can deduct motor vehicle expenses in the following circumstances:

If you own one rental property:

You can deduct reasonable motor vehicle expenses if you meet all of the following conditions:

• you receive income from only one rental property that is in the general area where you live
• you personally do part, or all, of the necessary repairs and maintenance on the property
• you have motor vehicle expenses to transport tools and materials to the rental property

You cannot deduct motor vehicle expenses you incur to collect rents. These are personal expenses.

If you own two or more rental properties:

In addition to the expenses listed above, you can deduct reasonable motor vehicle expenses you incur to do any of the following:

• collect rents
• supervise repairs
• manage the properties

This applies whether your rental properties are located in or outside the general area where you live. Your rental properties have to be located in at least two different sites, away from your principal residence. The motor vehicle expenses that we consider to be reasonable depend on the circumstances of your situation.

Line 9270 – Other expenses

Capital Cost Allowance (CCA)

You might acquire a depreciable property, such as a building, furniture or equipment, to use in your rental activities. You cannot deduct the cost of the property when you calculate your net rental income for the year.

However, since these properties may wear out or become obsolete over time, you can deduct their cost over a period of several years. The deduction is called capital cost allowance (CCA).

Amount of CCA you can claim

The CCA you can claim depends on the type of property you own and the date you acquired it. Group the depreciable property you own into classes. A specific rate of CCA generally applies to each class.

Frequent Classes:

Class 1 (4%)

A rental building may belong to Classes 1, 3, 6, 31 or 32, depending on what the building is made of and the date you acquire it. You also include in these classes the parts that make up the building, such as:

• electric wiring
• lighting fixtures
• plumbing
• sprinkler systems
• heating equipment
• air-conditioning equipment (other than window units)
• elevators
• escalators

Class 8 (20%)

Class 8 with a CCA rate of 20% includes certain property that is not included in another class. Examples include furniture, household appliances, a tool costing $500 or more, some fixtures, machinery, outdoor advertising signs, refrigeration equipment and other equipment you use in your rental operation.

Photocopiers and electronic communications equipment, such as fax machines and electronic telephone equipment are also included in Class 8.

Class 10 (30%)

Class 10 with a CCA rate of 30% includes general-purpose electronic data processing equipment (commonly called "computer hardware") and systems software for that equipment, including ancillary data processing equipment, if you acquired them either:

• before March 23, 2004
• after March 22, 2004, and before 2005, and you made an election

Class 10 also includes motor vehicles, as well as some passenger vehicles.

Class 10.1 (30%)

Your passenger vehicle can belong to either Class 10 or Class 10.1.

To determine the class your passenger vehicle belongs in, you have to use the cost of the vehicle before you add the GST/HST or the provincial sales tax (PST).

Include your passenger vehicle in Class 10.1 if you bought it in 2022 and it cost more than $34,000. List each Class 10.1 vehicle separately.

Class 31 (5%) and Class 32 (10%)

Class 31 and Class 32 include multiple-unit residential buildings (MURB) certified by the Canada Mortgage and Housing Corporation to which all of the following conditions apply:

• they are located in Canada
• they contain two or more units
• they provide their occupants with a relatively permanent residence

For more information, visit CRA website at

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4036/rental-income.html#P632_58016