Tax on rental income
According to a recent Stats Canada report, almost 1.4 million Canadian households reported having property rental income. That’s a significant portion of the population.. Given that rents increased on average across Canada by 11% in 2022 (and by considerably more in big cities, such as Toronto and Vancouver), it’s understandable why investing in property is so popular.
However, there are a lot of tax implications to consider when deciding to rent out a property, particularly one that used to be your primary residence. How much income tax will you pay on rental income? What tax deductions on rental property are available? And how does capital gains tax on rental property work? Knowing the answers to these questions is important so you don’t fall foul of the CRA, and also so that you can get a good idea of the margins of profitability involved in renting out properties.