Know your Real Estate tax deductions!

Know Your Deductions

Now be careful with this… don’t go buying all sorts of personal things and then trying to fit them in a business deductions later, without knowing what you can deduct.

In fact, that’s part of the trick… knowing what deductions you have available to you, depending on how you’re holding your real estate portfolio. CRA actually distinguishes between quite a few different methods, and they allow different deductions for each…

  • Held personally, 2 or more properties
  • Held personally, 1 property only (limited travel costs)
  • Held in a corporation, 5 or less employees (full corporate tax rates apply)
  • Held in a corporation, 6 or more employees (small business tax rates apply)
  • and more

As you can see, the rules can get complicated (that’s why I recommend an accountant). If you’re like most people, you’ll be holding properties personally and for that situation, unfortunately, your options are limited compared to your properties being held in a corporation and treated as a ‘full business’.

For more details on personally held properties, I recommend you check out the CRA Rental Income tax guide to see what deductions you have available for you, and then maximize your deductions by trying to find a ‘personal’ element to them.

-Paul Blacquiere Spirepoint Real Estate

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