Tax on Rental Income in Canada

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Rental Income Tax Calculator for 2024

Alberta

BC

Manitoba

New Brunswick

Newfoundland

Nova Scotia

Ontario

PEI

Quebec

Saskatchewan

Rental Income Information

- Ontario

ProvinceAlbertaBritish ColumbiaManitobaNew BrunswickNewfoundland and LabradorNorthwest TerritoriesNova ScotiaNunavutOntarioPrince Edward IslandQuébecSaskatchewanYukon

Monthly Rental Gross Income

XMonth

=

$ 20,000 / year

Your Rental Property is Part of a:

Sole Proprietorship

Partnership

Other Income

Employment Income

Other Income

Deductions for Eligible Expenses

Property Expenses

Condominium Fees

/ year

Property Taxes

/ year

Utilities

/ year

Insurance Premiums

/ year

Management & Financing Expenses

Office Expenses

/ year

Professional Fees

/ year

Property Management Costs

/ year

Advertising

/ year

Interest Charges

/ year

Repairs/Maintenance

/ year

Other Expenses

/ year

Add Rent Guarantee

YesNo

/ year

For 5% of your rental income, you can get:

Guaranteed Rental Income

Your rent is guaranteed for up to 12 months - even if your tentants do not pay!

Automatic Rent Collection

Rent is collected via pre-authorized debit directly to your bank account.

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Rent Protection

with

Property Damage Protection

Covers damage to your property due to vandalism by tenants for up to $10,000.

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Rent Protection

with

Your Rental Income Tax is ›

$221

Note: For this calculator, tax on your rental income is calculated using your highest tax bracket.

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If you are operating your rental property as a sole proprietorship, your rental income is taxed as personal income at your personal tax rate. You will need to complete Form T776 (Statement of Real Estate Rentals) when filing your personal income tax return.

Your taxable rental income is your gross rental income minus the expenses for operating your rental property. To learn more about deductible expenses, visit CRA’s website.

This calculator estimates the tax on your rental income by using your highest personal income tax bracket. For example, if we were to look at just the federal personal income tax brackets for 2024, the first $55,867 of income is taxed at 15%, while income between $55,867 and $111,733 is taxed at 20.50%.

If your employment income is $40,000 and you have a rental income of $20,000, then your rental income tax is:

Your federal portion of the rental income tax would be $3,227.32 on a rental income of $20,000 for the year 2024. Additionally, you will also have to pay a provincial income tax on the rental income, which would be calculated in a similar way.

Rental income for partnerships is still taxed as personal income, but operating your rental property as a partnership means that you will be sharing your profits and losses with your partner(s). The above calculator asks for your percentage of the partnership, which will change the rental income added to your personal income. You would then add your portion of the rental income to your personal tax return.

For example, let’s consider a joint partnership with Partner A owning 50% and Partner B owning 50%. The partnership’s rental income is $40,000, Partner A’s employment income is $40,000, and Partner B’s employment income is $100,000.

For personal income, the first $55,867 of income is taxed at 15%, while income between $55,867 and $111,733 is taxed at 20.50%, and $111,733 to $173,205 is taxed at 26% federally.

Partner A’s share of the partnership’s rental income is 50%, which is $20,000. The federal tax on their rental income can be calculated as:

Partner B’s personal income is higher. This puts Partner B in a higher personal income tax bracket. Partner B’s federal rental income tax would be:

Even though both partners received the same amount of rental income from the partnership, Partner B will pay more tax on the rental income that they received since their personal employment income puts them into a higher marginal tax bracket.

Rental properties owned by corporations will have their rental income taxed at their corporate income tax rate. If your corporation has an annual income of less than $500,000 and taxable capital of $15 million or less, your rental income may qualify for the small business deduction. This will reduce your corporate income tax rate both federally and provincially. For corporations in Saskatchewan, your annual income must be less than $600,000 to qualify for a small business deduction.

Tax Rate on Rental Income

Ontario's corporate income tax rate is 11.5%. This means that if you are a corporation, Ontario’s rental income tax rate is 11.5%. If you qualify for the small business deduction, your Ontario rental income tax rate is 3.2%. If you are operating as a sole proprietorship or partnership, visit our Ontario personal income tax calculator to find your personal tax bracket. Each province has their own tax brackets and tax rates.

If you are a resident of Canada for tax purposes please include your employment and other income from all sources. If you are a non-resident of Canada for tax purposes include your employment and other income only from Canadian sources.

You can save tax on rental income by deducting eligible expenses from your rental income.

Deductible expenses include:

• Advertising
• Insurance Premiums
• Interest Charges
• Office Expenses
• Professional Fees
• Repairs and Maintenance
• Salaries
• Property Taxes
• Utilities

If you are currently operating your rental property as a sole proprietorship or partnership, you could save tax on your rental income by running your property as a corporation instead. Depending on your employment income, your personal tax rate could be higher than corporate tax rates. However, incorporating may come with additional expenses, such as accounting and reporting requirements.