Topic hub · 23 pages
Real estate and rental income
Rental income, property sales, the principal residence exemption and capital gains explained for Ontario owners, with guides, articles and a rental expense checklist.
A side-by-side view of the tax questions that come with renting out a property and with selling one.
Visual labels: Rental income; Rental costs; Sale or change of use.Property creates tax questions at several points: when you earn rent, when you claim costs of owning a rental, when you sell and when you decide whether a home qualifies as your principal residence. The rules differ for each, and the paperwork you keep at the start determines how easily you can answer later.
This hub collects the pages that deal with property from a tax and records point of view. Definitions explain capital gains and the principal residence exemption. Articles and guides cover what rental expenses people commonly claim, how a sale is reported and what to keep for the years you owned the property. The checklist and calculator help you organize figures before a conversation. They are simplified and cannot account for every detail, such as shared ownership or a change of use. Bring purchase and sale documents, repair receipts and a rent ledger to your accountant so the numbers can be checked properly.
General information, not advice for your situation. How these pages are written and checked.
Guides (4)
Step-by-step checklists and plain-language walkthroughs.
Buying a rental property: a tax checklist for Ontario buyers
What to settle before and after you buy a rental property in Ontario: ownership, land transfer tax, closing costs, GST/HST on rent, record keeping, the flipping rule and first-year filing.
Read the guide Personal taxHome purchase tax checklist: from offer to tax return
Step through the tax-related decisions and records of a Canadian home purchase: FHSA and HBP withdrawals, Ontario land transfer tax refund, new home rebates and your next return.
Read the guide Personal taxSelling your home: reporting the principal residence exemption
Why a home sale must be reported on Schedule 3 and Form T2091(IND), how partial designation, rental conversions and the flipping rule work, and which records to keep.
Read the guide Personal taxRental income: what you can claim
How rental income is reported on Form T776, which expenses are deductible, how current and capital expenses differ and why capital cost allowance deserves caution.
Read the guideTools (2)
Free calculators and checklists that run in your browser.
Articles (6)
Longer explanations of the decisions behind the numbers, newest first.
- Personal tax
Capital gains reserve explained: spreading a gain over years
How a capital gains reserve lets you report a gain over several years when you are paid over time: who can claim, the four-year and nine-year periods, Form T2017 and an example.
Read the article - GST/HST
GST/HST for short-term rentals in Ontario: when to charge it
Does your Airbnb or short-term rental need GST/HST? The one-month rule, the $30,000 small supplier test, platform rules, input tax credits and the records to keep.
Read the article - Personal tax
Reporting foreign income and property to the CRA
How Ontario residents report foreign income and foreign property: converting to Canadian dollars, the foreign tax credit, Form T1135, the $100,000 test and the penalties.
Read the article - Personal tax
Selling a cottage or second property: tax in Ontario
Selling a cottage or other second property in Canada: why you choose which home to designate as a principal residence, how the gain is worked out, no loss claims, reserves and reporting.
Read the article - Personal tax
Selling a rental property: capital gains and recapture
How tax works when you sell a rental property in Canada: the capital gain, recapture of capital cost allowance, terminal losses, the land and building split and reporting.
Read the article - Personal tax
Tax tips for real estate agents in Ontario
How real estate agents are taxed in Ontario: commission income, GST/HST on commissions, deductible expenses, instalments and the records worth keeping all year.
Read the article
Encyclopedia terms (11)
Definitions with examples, in alphabetical order.
- Capital gains
Understand how a capital gain is calculated in Canada, what the inclusion rate means, and how capital losses can be used, with a worked example.
- Capital property
Capital property is property you buy to hold for investment or to earn income, and its sale produces a capital gain or loss. Learn what counts and what does not.
- Fixed assets
Fixed assets are long-lived items a business uses to earn income, such as equipment and vehicles. Learn how to record them and what separates them from expenses.
- GST/HST on real property
Understand how GST/HST applies to real property in Canada: why commercial sales are generally taxable, used homes usually exempt, and where builders and mixed-use property differ.
- Lifetime capital gains exemption
The lifetime capital gains exemption can shelter gains on qualifying small business shares or farm and fishing property. Learn the limit, the tests and the form.
- Listed personal property
Listed personal property covers art, jewellery, rare books, stamps and coins. Learn how gains are taxed and why losses only offset other LPP gains.
- Personal-use property
Personal-use property is what you own mainly for personal enjoyment, such as a car or cottage. Learn the $1,000 rule and why most losses cannot be claimed.
- Principal residence exemption
Learn how the principal residence exemption works in Canada, how to designate a home, why the sale must be reported, and where partial exemptions apply.
- Residential property flipping rule
Learn what the residential property flipping rule is, how the 365-day test works, which life events are exceptions, and why a flip is taxed as business income.
- T1135 (Foreign Income Verification Statement)
Learn when Canadian residents must file Form T1135, what counts as specified foreign property, the $100,000 cost test and the simple Part A option.
- T776 (Statement of Real Estate Rentals)
What Form T776 is, what it reports, how co-owners and part-home rentals use it, and what to gather before an Ontario landlord’s accountant completes it.
Who this affects (3)
Industries where this topic comes up often.
Personal tax
Your personal return done right, whether it’s simple or includes self-employment, rental or investment income.
What it involvesTalk it through with an accountant
Reading helps you ask better questions. When the rules meet your own records, a conversation settles what applies. Sora’s personal tax service is the closest match to this topic.
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