What expenses you can deduct from rental income

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You can deduct any reasonable expenses you incur to earn rental income. The following is a list of expenses that are deductible:

  • Advertising - You can usually deduct amounts for advertising that your rental property is available for rent.
  • Insurance - deduct the premiums for the current year. If your policy gives coverage for more than one year, you can deduct only the premiums that relate to the current year. Deduct the remaining premiums in the year or years to which they relate.
  • Interest - you can deduct mortgage interest but repayments of principle are not deductible. You can also deduct certain fees you have when you get a mortgage or loan to buy or improve your rental property.
  • Office expenses - small items such as pens, pencils, paper clips, stationery, stamps, etc.
  • Legal, accounting, and other professional fees - fees paid for bookkeeping or tax return preparation are deductible. You can deduct fees for legal services to prepare leases or collect rents. However, legal fees related to purchase of your rental property are not deductible from your gross rental income. Instead, they should be added to the cost of the property.
  • Management and administration fees - you can deduct the amounts paid to a person or a company to manage your property or agents for collecting rents or finding new tenants.
  • Maintenance and repairs - you can deduct the cost of labour and materials to repair your property.
  • Salaries, wages, and benefits - if you hire employees such as superintendents, maintenance personnel to take care of your rental property.
  • Property tax - deduct the property tax for the period when it was available for rent.
  • Travel expenses - you might travel to collect rents, supervise repairs, and manage your properties. Need to meet certain conditions.
  • Utilities - gas, oil, electricity, water, cable, and etc.
  • Other expenses - condominium fees, landscaping costs, lease cancellation payments, and etc.

Additional information