Rental property · Expenses
A new roof and a fresh coat of paint are not deducted the same way. The test is not the dollar amount.
The test
The CRA chart asks: "Does the expense provide a lasting benefit? A capital expense generally gives a lasting benefit or advantage." Its own example: "the cost of putting vinyl siding on the exterior walls of a wooden house is a capital expense", while "the cost of painting the exterior of a wooden house is a current expense" because a current expense "usually recurs after a short period".
Second question in the chart: does the expense maintain or improve the property? "The cost of a repair that improves a property beyond its original condition is probably a capital expense."
The deductible lines on the T776
Each has its own line: advertising (8521), insurance (8690), interest and bank charges (8710), office expenses (8810), professional fees (8860), management and administration fees (8871), repairs and maintenance (8960), salaries and wages (9060), property taxes (9180), travel (9200), utilities (9220), motor vehicle expenses (9281).
Two limits owners run into
- Refinancing for personal use. The CRA answers the question directly: where money from refinancing a rental property is used for personal purposes, "you cannot deduct the interest expenses".
- Vacant land. Interest and property taxes on land are limited to the rental income left after all other expenses. They cannot create or increase a rental loss, though they can be added to the cost of the land.
Condominium fees
Worth knowing for anyone renting out a condo: the CRA allows the deduction of "condominium fees that represent your share of the upkeep, repairs, maintenance, and other current expenses of the common property".
Where this actually lands: at purchase, not after
These rules have one thing in common. They are not discovered while managing a building, they are discovered while buying one. A lease carrying a void clause, a deposit that was never lawful, a dwelling occupied by a succession, a subdivision project the law has suspended: each of those is sold along with the building.
That is why we read the leases, the building's tax position and the history of notices before making an offer on a plex, never after acceptance.
Three habits before buying a rental property
- Ask for every lease and its schedules, not just the rent roll. The clauses hide in the schedules.
- Have the tax modelled before the offer, including the seller's CCA position and what you intend to do with your own.
- Check what the law still permits for your plan. Repossession, eviction and conversion rules have changed and keep changing.
Related
Frequently asked
Is a major renovation deductible in the year?
Usually not. If it gives a lasting benefit or improves the property beyond its original condition, the CRA treats it as a capital expense.
Does a rise in market value settle the question?
No. The CRA states that the increase in market value after the expense is not an important factor.
Are condo fees deductible on a rented condo?
Yes, the share representing upkeep, repairs, maintenance and other current expenses of the common property.
Sources: the official English version of the Civil Code of Quebec (legisquebec.gouv.qc.ca), the Administrative Housing Tribunal (tal.gouv.qc.ca), Canada Revenue Agency guide T4036 Rental Income and Revenu Quebec, consulted 11 September 2026. This page informs; it is neither legal nor tax advice. For a specific situation, consult a notary, a lawyer or an accountant.
Published by the Loaa & Manseur team, number one team at RE/MAX Platine in 2024 and 2025. Tell us about your project.