Real Estate Taxes in Canada: Guides to Selling, Renting and Owning Property

This hub covers the income tax rules for owning, renting out and selling real estate in Canada, plus the speculation, vacancy and underused housing taxes. Each guide below owns one topic; the rules they quote come from the Income Tax Act, Canada Revenue Agency (CRA) guides and the governments that run each tax, and each page lists its sources.

Taxes paid when you buy (land transfer tax, GST/HST on a new home) are covered in the closing costs guides; financing a rental is covered in the investment property guides.

Your home

• Principal residence exemption: how the exemption works, designating a home and the formula when it wasn’t your principal residence every year.
• The exemption when you rent part of your home: when renting a suite or room keeps the whole home exempt.
• Turning your home into a rental: the change in use and the 45(2) election, and moving back in.
• Renting out part of your home: reporting the rent, splitting expenses and what it means for the exemption.
• Cottage and vacation property taxes: selling or renting a cottage, and choosing which property to designate.

Rental income

• Landlord tax guide: an overview of a landlord’s tax obligations.
• How to report rental income (Form T776): filling in the form line by line.
• Rental property expenses you can deduct: current versus capital expenses and each deductible expense.
• Renting to family: below-market rent and when a rental loss is denied.
• Rental income tax calculator: an estimate of the tax on your net rental income.

Capital cost allowance

• CCA on rental property: classes, rates, the first-year rules and the limit on creating a loss.
• Undepreciated capital cost (UCC): how the UCC changes and what happens to it when you sell.
• CCA depreciation schedules: worked schedules for buildings, equipment and vehicles.

Selling

• Capital gains on rental property: the capital gain, CCA recapture and losses when you sell a rental.
• Flipping houses tax rules: the residential property flipping rule and when profit is business income.

Short-term rentals and corporations

• Airbnb tax rules: rental or business income, GST/HST, non-compliant rentals and platform reporting.
• Holding rentals in a corporation: how a corporation’s rental income is taxed and when it pays.

Vacancy and ownership taxes

• BC speculation and vacancy tax
• Vacant home taxes in Canada: Toronto, Vancouver and Ottawa compared.
• Toronto vacant home tax
• Underused Housing Tax: the federal tax that applied for 2022 to 2024.

Related guides elsewhere on the site

• Capital gains tax calculator and the capital gains inclusion rate
• Adjusted cost base and the lifetime capital gains exemption
• Tax when you sell your home
• City short-term rental rules
• Property owned by non-residents
• EI and rental income