Rental Property Expenses

Rental Property Expenses You Can Deduct

Every landlord knows the property costs money. The tax question is which of those costs come off the rent this year, which wait until later, and which never come off at all. Getting that sort right is most of what separates a clean rental return from one CRA adjusts. Here's the list, line by line.

Deductible Expenses, by T776 Line

Line	Expense	Notes
8521	Advertising	Listings, signs, finder's fees
8690	Insurance	This year's portion of the premium; spread multi-year policies
8710	Interest and bank charges	Interest on money borrowed to buy or improve the rental; mortgage fees over 5 years
8810	Office expenses	Stationery, postage; furniture goes through CCA
8860	Professional fees	Accounting, leases, rent collection; legal fees to buy the property are added to its cost
8871	Management and administration fees	Property manager, rent collection agent
8960	Repairs and maintenance	Labour and materials for repairs, not improvements; not your own labour
9060	Salaries, wages and benefits	A superintendent or maintenance worker, plus your employer CPP and EI
9180	Property taxes	For the rental period
9200	Travel	To collect rent or supervise repairs (rules below)
9220	Utilities	If you pay them under the lease
9281	Motor vehicle expenses	Only in limited cases (below)
9270	Other expenses	Condo fees, landscaping, lease cancellation payments you make (spread over the lease)
9936	Capital cost allowance	Optional; can't create a loss

How each line flows through the form is on form T776 explained.

Repair or Improvement?

Usually a repair (deduct now)	Usually an improvement (capital)
Patching a roof leak, replacing some shingles	A full new roof with better materials
Repainting between tenants	A kitchen or bathroom renovation
Fixing a furnace	Replacing a working furnace with a high-efficiency system
Replacing a broken window with a similar one	Replacing all windows with upgraded ones
Routine fixes after a tenant moves out	Fixing problems that existed when you bought the property
Replacing a few damaged floorboards	Additions, finishing a basement, a new suite

CRA's questions: does it restore the property, or improve it beyond its original condition? Is it a separate asset? Is the cost large relative to the property's value? Repairs to fix problems that existed when you bought the property are generally capital. When in doubt, CRA tends to see capital; keep the invoice description specific ("replace 12 damaged shingles" beats "roof work"). More examples are on repairs vs improvements.

Capital Cost Allowance on a Rental

• Buildings bought after 1987 are usually class 1, at 4% a year on the declining balance. Each rental property costing $50,000 or more goes in its own class.
• For a building acquired in 2025 or later and available for use before 2030, the reaccelerated investment incentive allows 1.5 times the rate in the first year (6% instead of the usual 2%); see CCA on rental property.
• Land is never depreciable: split the purchase price between land and building.
• Appliances and furniture you supply are class 8 (20%); see capital cost allowance explained.
• CCA can reduce net rental income to zero but not create or increase a loss (combined across all your rentals).
• Claiming CCA on a unit in your own home can cost you part of your principal residence exemption.

What You Can't Deduct

• Land transfer tax and legal fees on purchase: added to the property's cost.
• Mortgage principal: only the interest is deductible.
• Your own labour, even if you're a contractor.
• Penalties on your notice of assessment, and interest CRA charges you.
• Personal-use share of costs when you live in part of the property or use it yourself.
• Interest and property tax on vacant land, beyond the income it earns; the rest is added to the cost.
• Soft costs during construction or renovation (interest, property tax, legal and accounting fees attributable to the construction period) are added to the building's cost.
• Expenses of a non-compliant short-term rental, since 2024; see Airbnb taxes.

Driving and Travel

You own	Vehicle expenses allowed
One rental property in your area	Only if you collect rent personally and do repairs yourself, transporting tools and materials (not just to collect rent)
Two or more rental properties	Reasonable costs to collect rent, supervise repairs and manage, at locations other than your home
A rental outside your general area	Generally not, except travel to supervise repairs or to transport tools and materials

Keep a log, as for any vehicle claim; see the mileage log guide.

Interest: The Biggest Line

Interest is deductible on money borrowed to buy or improve the rental. What counts is how the borrowed money was used, not what secures the loan. Refinancing your rental to take cash out for a family vacation makes that share of the interest non-deductible. Borrowing against your home to buy a rental can make that interest deductible. Track the use of every borrowed dollar. Mortgage arrangement costs are spread over five years; if you pay off the loan early, the rest is deducted then.

Records to Keep

Keep invoices, the closing documents (to split land and building and to add the purchase costs to the cost base), mortgage statements showing interest, and a list of capital improvements with dates and amounts. You'll need that list when you sell. See what receipts to keep.

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Roughly how much is at stake?Under $2,000$2,000 to $10,000$10,000 to $50,000Over $50,000Not sure

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Report the income side correctly too: see rental income tax. The overview is on rental property tax, and Return Check flags repairs that look like improvements before you file.

Rental Expense Questions

Sources: CRA, Rental expenses you can deduct; Rental expenses you cannot deduct; Guide T4036. Checked October 2026. Repair versus improvement depends on the facts; the examples show CRA's usual approach, not a guarantee.

Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.