Tax Write-Offs that You don't Want to Miss as a Landlord

Disclaimer: this article is written for informational purposes only. Noble Homes is not a tax service and all tax related inquiries should be reviewed by a certified tax accountant.

Landlords with rental properties in British Columbia are entitled to several tax write-offs, which enable them to create huge financial savings. This comes from the government allowing property owners to deduct reasonable expenses associated with their property in order to earn more rental income.

Essentially, the two types of expenses involved here are:

  1. Current expenses
  2. Capital expenses

Current expenses refer to the costs incurred to keep or improve the property continuously.

Capital expenses refer to costs incurred as a one-off to improve the property permanently.

It is worth stating that some expenses are non-deductible. For this reason, check with the tax body or experts to understand what is deductible vs non-deductible. Otherwise, you could find yourself in hot legal soup with the Canada Revenue Agency (CRA) for doing the wrong thing.

Continue reading for more details.

List of Write-Offs

What tax write-offs should landlords in British Columbia be taking advantage of?

Below is a list of available tax write-offs and deductions.

  • Advertising
  • Insurance
  • Interest accrued
  • Office expenses
  • Travel associated with the property
  • Utilities
  • Motor vehicle expenses associated with the property
  • Maintenance and repairs
  • Legal and accounting fees
  • Property taxes
  • Salaries/wages/benefits
  • Administration and management fees
  • Prepaid expenses
  • Other expenses

All expenses incurred when advertising the availability of your rental property are tax deductible. The premiums you pay insurance coverage on the rental property are also deductible. However, you can only deduct premiums for the current year. Expenses incurred in the form of legal fees paid for preparing leases are also eligible for tax deductions.

The cost of labor and the money you pay to buy materials for maintenance, repairs, or replacements on the property also qualify for tax write-offs. Deductions do not apply if you work on the building yourself without hiring any professional contractor to perform the maintenance or repairs.

The law also allows you to write off any amount paid to a property management agency. The expenses you incur to run your office can be deducted from your taxes as well. Landlords who travel a lot to collect the rent from their tenants, supervise repairs and maintenance services, or manage the property can also deduct the expenditure from their taxes.

Travel expenses are limited to what you actually pay to travel to the property.

Money you pay for lodging or boarding do not qualify as travel expenses.

You can only make claims regarding rental income as well as expenses using Form T776.

Using the tax benefits noted above along with partnering with a professional property management company can create huge benefits you didn’t even know were available! So speak with your accountant to make sure you fully understand the available write-offs.