Every Deductible Rental Property Expense in Canada

Canadian landlords can deduct dozens of expenses against their rental income. The problem is that most only claim the obvious ones and miss the rest.

This is the complete list. Every deductible rental property expense recognized by the CRA, organized by T776 line number and category. Bookmark it, share it with your accountant, and use it as a checklist every tax season.

How rental expense deductions work

The CRA allows you to deduct any “reasonable expense” you incur to earn rental income. You report these on Form T776 (Statement of Real Estate Rentals), which attaches to your T1 personal tax return.

There are two types of deductible expenses:

1. Current expenses are fully deductible in the year you incur them. These are recurring costs that keep your property running: insurance, repairs, property tax, utilities.

2. Capital expenses provide a lasting benefit (typically beyond one year) and must be depreciated over time through Capital Cost Allowance (CCA). A new roof, a kitchen renovation, or a replacement furnace are capital expenses.

The distinction matters. Current expenses reduce your rental income immediately. Capital expenses are spread out over years. We cover the decision guide for borderline cases later in this article.

For a full walkthrough of how the T776 form works section by section, see our Complete T776 Guide.

Property expenses (Lines 8690-9180)

These are the recurring costs directly tied to owning and maintaining your rental property.

Line 8690: Insurance

Deduct premiums you pay to insure your rental property.

What qualifies:

• Landlord property insurance
• Landlord liability insurance
• Flood, earthquake, or sewer backup riders
• Boiler and machinery insurance
• Rental guarantee or loss-of-rent insurance

What doesn’t qualify: Tenant insurance (that’s their expense, not yours). Personal home insurance on a property you don’t rent out.

Tip: Many landlords claim basic property insurance but forget about their liability policy. Also check Line 8710 for CMHC mortgage insurance premiums — those are deductible too, but under interest and bank charges.

Line 8710: Interest and bank charges

This is often the largest single deduction for landlords. You can deduct interest on money borrowed to buy, build, or improve your rental property.

What qualifies:

• Mortgage interest (not principal)
• Interest on a line of credit used for rental property expenses or improvements
• Interest on a loan to buy appliances or equipment for the property
• Bank fees on an account used for rental transactions
• Mortgage penalty for early payoff or refinancing (prorated over the remaining original term)
• CMHC mortgage default insurance premiums (deducted over 5 years at 20% per year)
• Interest paid to tenants on rental deposits
• Fees to reduce your mortgage interest rate (prorated over the remaining original term)

What doesn’t qualify: The principal portion of your mortgage payment. This is the most common mistake landlords make. Only interest is deductible. Your mortgage statement breaks this out for you.

Line 8960: Repairs and maintenance

Any expense that restores your property to its original condition is a current expense, fully deductible in the year you pay it.

What qualifies:

• Plumbing repairs (fixing leaks, unclogging drains, replacing faucets)
• Electrical repairs (outlet replacement, wiring fixes, light fixture repair)
• Painting and patching drywall
• Replacing broken windows (same quality)
• Furnace and A/C repair and servicing
• Roof repairs (patching, replacing shingles, fixing leaks)
• Appliance repair
• Replacing door hardware and locks between tenants
• Fixing or replacing flooring (same quality)
• Pest control and extermination
• Cleaning between tenants
• Chimney cleaning and repair
• Gutter cleaning and repair

What doesn’t qualify: Work that improves the property beyond its original condition. That’s a capital expense (see the decision guide below). Replacing wood steps with wood steps is a repair. Replacing wood steps with concrete steps is a capital improvement.

Line 9180: Property taxes

Deduct the municipal and school property taxes you pay on your rental property.

What qualifies:

• Annual municipal property taxes
• School taxes (in provinces where billed separately, like Quebec)
• Local improvement charges (portion that is a recurring annual levy)

What doesn’t qualify: Land transfer taxes paid when you purchased the property (these get added to the property’s cost base instead). Special assessments for capital improvements to the property.

Operational expenses (Lines 8521-8871)

These are costs related to running your rental business.

Line 8521: Advertising

Deduct the cost of advertising for tenants.

What qualifies:

• Online listing fees (Kijiji, Facebook Marketplace, Zumper, RentFaster)
• “For Rent” signs
• Professional photography for listings
• Rental listing platform subscriptions
• Tenant screening service fees
• Print advertising

Line 8810: Office expenses

Deduct supplies and services you use to manage your rental business.

What qualifies:

• Pens, paper, printer ink, envelopes, postage
• Software subscriptions for rental management (including RentBase)
• Accounting software
• Phone charges (rental-use portion)
• Internet charges (rental-use portion)

Line 8860: Professional fees

Deduct fees paid to professionals for services related to your rental properties.

What qualifies:

• Accountant fees for preparing your T776 or rental tax return
• Legal fees for lease preparation, review, or tenant disputes
• Legal fees for eviction proceedings
• Bookkeeping fees
• Appraisal fees (if incurred to obtain financing for the rental property)
• Tax consultation fees related to your rental income

What doesn’t qualify: Legal fees to buy or sell the property (added to cost base or deducted from sale proceeds). Legal fees for personal matters unrelated to the rental.

Line 8871: Management and administration fees

Deduct fees paid to a property manager or management company.

What qualifies:

• Property management company fees (typically 8-12% of collected rent)
• Superintendent or on-site manager wages (if paid as a contractor)
• Condo management fees (the portion that covers building maintenance, not the reserve fund)

Salaries, travel, and vehicle expenses (Lines 9060-9281)

If you have employees or travel to manage your rental properties, those costs are deductible.

Line 9060: Salaries, wages, and benefits

Deduct amounts paid to employees who help with your rental properties.

What qualifies:

• Superintendent or caretaker wages
• Maintenance staff wages
• Employer’s share of CPP and EI contributions for those employees
• Workers’ compensation premiums

Line 9200: Travel

If your rental property is far enough away that you need to travel (not just drive locally), you can deduct travel costs.

What qualifies:

• Airfare to your rental property location
• Hotel or accommodation while managing your property
• Meals while travelling (50% deductible)
• Car rental during property visits

Important: The CRA requires that travel be “reasonable” and directly related to earning rental income. A week at the beach with one afternoon checking on your rental won’t qualify.

Line 9220: Utilities

Deduct utilities you pay as the landlord. If your tenant pays their own utilities, you can’t claim them.

What qualifies:

• Electricity (hydro)
• Natural gas or oil heating
• Water and sewer charges
• Garbage collection fees (if billed separately)

What doesn’t qualify: Utilities paid by the tenant. If you and a tenant share a utility account, only deduct the rental portion.

Line 9270: Other expenses

Line 9270 captures expenses that don’t fit neatly into the lines above. Many of the deductions landlords miss fall into this category.

What qualifies:

• Condo fees (the portion covering operating expenses, not the reserve fund contribution)
• Landscaping and lawn care
• Snow removal and salting
• Amounts paid to tenants to cancel their lease (prorated)
• Strata fees
• Security system monitoring
• Fire extinguisher and safety equipment
• Key cutting and locksmith services
• Appliance rental (washer/dryer, water heater)
• Water heater rental

Line 9281: Motor vehicle expenses

Deduct the cost of using your vehicle for rental property management.

What qualifies:

• Fuel
• Insurance (rental-use portion)
• Maintenance and repairs (rental-use portion)
• Licence and registration (rental-use portion)
• CRA mileage rate ($0.73/km for the first 5,000 km, $0.67/km after that for 2026)

You can claim vehicle expenses using either the detailed method (track all costs and apply your rental-use percentage) or the simplified method (CRA mileage rate per kilometre).

Critical requirement: You must keep a mileage log. Record the date, destination, kilometres driven, and purpose of every trip. The CRA requires a contemporaneous log, meaning you record it when it happens, not at tax time.

Capital expenses (CCA, Area A of T776)

Capital expenses are not deductible all at once. Instead, you claim them over time as Capital Cost Allowance (CCA) on Area A of the T776.

CCA Class	Rate	Assets
Class 1	4%	Rental building (not land)
Class 8	20%	Appliances, furniture, fixtures, equipment
Class 10	30%	Motor vehicles
Class 12	100%	Small tools under $500
Class 17	8%	Parking lots, driveways, sidewalks
Class 50	55%	Computer equipment

Common capital expenses for landlords:

• The building itself (not the land)
• New roof
• New furnace, A/C, or boiler
• Kitchen or bathroom renovation
• New appliances (fridge, stove, washer, dryer, dishwasher)
• New flooring (upgrade, not same-quality replacement)
• Deck, patio, or balcony addition
• Parking lot paving
• Structural additions (new rooms, extensions)
• Laptop or computer used for rental management

Key rules:

• The half-year rule limits your first-year CCA to half the normal amount
• CCA cannot create or increase a net rental loss
• When you sell, you may face recapture (CCA gets added back to income)

For the full breakdown of how CCA works, see our Capital Cost Allowance guide.

The deductibility checklist: 30+ common items

Here is a quick-reference table for the items landlords ask about most. “Current” means fully deductible in the year paid. “Capital” means deductible over time through CCA. “No” means not deductible at all.

Expense	Deductible?	Where to claim
Mortgage interest	Current	Line 8710
Mortgage principal	No	Never deductible
Property tax	Current	Line 9180
Landlord insurance	Current	Line 8690
CMHC premium	Current (20%/yr over 5 years)	Line 8710
Condo/strata fees	Current (operating portion)	Line 9270
Plumber call (repair)	Current	Line 8960
Electrician call (repair)	Current	Line 8960
Painting between tenants	Current	Line 8960
Lawn mowing / landscaping	Current	Line 9270
Snow removal	Current	Line 9270
Pest control	Current	Line 8960
Cleaning between tenants	Current	Line 8960
New roof	Capital	CCA Class 1
New furnace	Capital	CCA Class 8
Kitchen renovation	Capital	CCA Class 1
New appliance (fridge, stove)	Capital	CCA Class 8
Appliance repair	Current	Line 8960
Accounting fees	Current	Line 8860
Legal fees (tenant dispute)	Current	Line 8860
Legal fees (property purchase)	No	Added to cost base
Property management fees	Current	Line 8871
Advertising for tenants	Current	Line 8521
Tenant screening fees	Current	Line 8521
Mileage to property	Current	Line 9281
Home office (rental mgmt)	Current	Line 9270
Utilities (landlord-paid)	Current	Line 9220
Land transfer tax	No	Added to cost base
Replacing locks	Current	Line 8960
New deck or patio	Capital	CCA Class 1
Driveway repaving (same)	Current	Line 8960
Driveway repaving (upgrade)	Capital	CCA Class 17
Security system install	Capital	CCA Class 8
Security monitoring fees	Current	Line 9270
Water heater rental	Current	Line 9270
Bank fees (rental account)	Current	Line 8710
Rental management software	Current	Line 8810

Capital vs. repair: how to decide

This is the question that trips up landlords more than any other. The CRA’s test comes down to three questions:

Question 1: Does it restore the property to its original condition, or make it better than before?

If you’re putting something back to the way it was, that’s a repair (current expense). If you’re improving it, that’s a capital expense.

• Fixing the old furnace = repair (Line 8960)
• Replacing the furnace with a new one = capital (CCA)
• Patching 10 shingles = repair (Line 8960)
• Replacing the entire roof = capital (CCA)

Question 2: Does the expense provide a lasting benefit beyond one year?

Recurring maintenance that keeps things running is current. A one-time expense that provides years of benefit is capital.

• Annual furnace tune-up = current
• New furnace that lasts 15 years = capital

Question 3: Is it a separate, identifiable asset?

A new fridge is a separate asset you could sell on its own. That makes it capital (CCA Class 8). Cleaning supplies are consumables that get used up. That’s current.

Decision flow:

Is the property restored to its original condition?
  YES --> Current expense (Line 8960)
  NO  --> Does it provide lasting benefit beyond one year?
            YES --> Capital expense (CCA)
            NO  --> Current expense (appropriate line)

The wood steps test (from the CRA): Replacing wood steps with wood steps is a repair. Replacing wood steps with concrete steps is a capital improvement. Same material, same quality = repair. Better material, higher quality = capital. The CRA uses this example in their official guidance on current vs. capital expenses.

When in doubt, ask your accountant. The classification affects your taxes for years.

Expenses you cannot deduct

For completeness, here are expenses the CRA explicitly does not allow as deductions:

• Mortgage principal repayments. Only interest is deductible.
• Land transfer taxes. Added to the property’s cost base.
• The value of your own labour. If you paint a unit yourself, you can’t pay yourself and deduct it.
• Personal portion of expenses. If you live in part of the property, only the rental portion of shared expenses is deductible. Use the square footage or number of rooms method to calculate the split.
• Legal fees to buy or sell the property. These are added to (or deducted from) the cost base for capital gains purposes.
• Income tax on rental income. Provincial and federal income taxes are never deductible.
• Fines and penalties. Municipal fines, CRA penalties, or other fines are not deductible.

For more details, see the CRA’s page on rental expenses you cannot deduct.

Short-term rental restriction (2024 onward)

Starting with the 2024 tax year, the CRA introduced new rules for short-term rentals. If your short-term rental does not comply with local municipal registration, licensing, or permit requirements, the CRA will limit or deny your expense deductions for the non-compliant period.

This applies to properties rented for fewer than 90 consecutive days. If your province or municipality requires a short-term rental licence, registration, or permit and you don’t have one, you could lose all your deductions for those non-compliant days.

Long-term residential landlords (leases of one year or more) are not affected by this rule.

Personal use: the proration rule

If you use part of your rental property personally (for example, you live in one unit of a duplex), you must prorate shared expenses. Only the rental portion is deductible.

How to calculate your rental portion:

• By area: If the rental unit is 60% of the total floor space, deduct 60% of shared expenses (property tax, insurance, utilities, mortgage interest).
• By rooms: If you rent 3 out of 5 rooms, deduct 60% of shared expenses.

The T776 has a dedicated “Personal portion” column for each expense line. The total of your personal-use adjustments goes on Line 9949.

How to track all of this

The list of deductible expenses is long. The T776 has over a dozen line items. Every expense needs a receipt, a date, a property, and a category.

This is exactly why most landlords miss deductions. Not because they don’t exist, but because tracking them across receipts, bank statements, and spreadsheets all year is exhausting. By April, you’ve forgotten half of them.

RentBase was built around the T776 from day one. Every expense you log is automatically categorized to the correct T776 line. Upload a receipt, and AI extracts the details for you. When tax time comes, you export a report that maps directly to the form.

Start free and stop leaving deductions on the CRA’s table.

Complete T776 line reference

For quick reference, here is every expense line on the T776:

T776 Line	Category
8521	Advertising
8690	Insurance
8710	Interest and bank charges
8810	Office expenses
8860	Professional fees (legal, accounting)
8871	Management and administration fees
8960	Maintenance and repairs
9060	Salaries, wages, and benefits
9180	Property taxes
9200	Travel
9220	Utilities
9270	Other expenses
9281	Motor vehicle expenses
9949	Total for personal portion
Area A	Capital Cost Allowance (CCA)

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This article is for educational purposes and does not constitute tax advice. Consult a qualified tax professional for advice specific to your situation. For official CRA guidance, see the T4036 Rental Income Guide.