If you own a property that is not your primary residence, this is considered to be an investment property. Read below to learn more about filing your taxes if you have an investment property.
Rental income is any income you earn from renting out property that you own. If you have rental income, you will need to report this on your return. Specifically, for rental income for an investment property, you will need to fill out a T776 form.
To calculate your rental income, follow the steps outlined in this section of the CRAs Rental income guide.
Foreign rental property
If you own a foreign rental property, you may still need to claim this on your Canadian tax return. Specifically, you must fill out a T1135 if you own foreign property totaling more than $100,000 CAD.
To claim a foreign tax credit for my foreign rental income, follow the instructions in this article.
Changes to your property
Changes to your property can include:
- Changing your primary residence to either a rental property or a business property
- Changing either a rental property or business property to your primary residence
If you change the way you use a property, you are considered to have deemed a disposition. For tax purposes, this means that you would have sold the property at its fair market value and to have immediately reacquired the property for the same amount. The deemed disposition may result in a capital gain. For more information, check out this article.
Owning an investment property with another person
If you own an investment property with someone else, you will need to determine what kind of ownership you have (either a partnership or co-ownership). Once you know whether you are in a rental partnership or co-ownership, you will need to report this on your tax return.