Services
Rental Property Tax Services for Ottawa Landlords
Whether you rent out a basement apartment, a few condos or a cottage on a booking platform, rental income comes with its own forms and rules. BBA Tax handles rental property tax for Ottawa landlords: we prepare your T776, separate repairs from capital improvements, decide when claiming CCA makes sense and plan ahead for a sale. You get a return where every claim is documented, and a clear view of what each property earns.
How We Help Landlords
Rental income goes on Form T776 with your personal return: gross rent on line 12599 and net income or loss on line 12600. Co-owners report their share based on ownership. For 2026, file and pay by April 30, 2027; if you or your spouse are self-employed, filing moves to June 15 but payment does not.
We track rent and expenses by property: mortgage interest, property tax, insurance, utilities, repairs and management fees. Interest is deductible but principal repayments are not, and land transfer tax paid on purchase is added to the property’s cost. Keep records six years after the year they relate to, and purchase and improvement records indefinitely.
Long-term residential rents of a month or more are exempt from GST/HST, but short-term stays can be taxable. We check whether you have crossed the registration threshold, register you when needed and file your returns. Once registered, you charge HST on every taxable stay, including bookings that come through a platform.
Rental income in a corporation usually doesn’t qualify for the small business rate unless the company has more than five full-time employees, and it counts as passive income for the small business limit. Moving a property you own into a corporation for shares also brings Ontario land transfer tax on its fair market value.
If you have collected rent without reporting it, acting before the CRA contacts you matters. An unprompted Voluntary Disclosures Program application can relieve 100% of penalties and 75% of interest when its conditions are met, including paying the estimated tax or requesting a payment arrangement. We rebuild the missing years and prepare the disclosure.
One File for Every Property
Each property gets its own file: the purchase price split between land and building (only the building can be depreciated), a capital cost allowance schedule and a running list of improvements. When you spend money, we apply the CRA’s tests. Repainting is a current expense, while new vinyl siding, or replacing wooden steps with concrete ones, is a capital cost.
Short-term rental hosts get extra checks. We track nights rented against nights you used the place yourself, watch the GST/HST threshold, and confirm you hold any permit or registration your city or province requires, because expenses for a non-compliant short-term rental (under 90 consecutive days) are not deductible for the days it was out of compliance.
Support From Purchase to Sale
We handle the full life of a rental: setting up the CCA schedule when you buy, preparing your T776 each spring, GST/HST registration and returns for short-term rentals, instalment planning when rent leaves you owing tax, and the capital gain and recapture calculations when you sell. If your properties sit in a corporation, we also prepare its T2 and the T5 slips for any dividends it pays you.
Why Rental Income Is Easy to Get Wrong
Rent in, expenses out sounds simple. The harder part is that many rental decisions carry forward for years: how improvements are treated, whether CCA is claimed and how you use the property yourself. A wrong call can stay hidden until you sell or the CRA reviews a return. These four areas deserve the closest attention.
CCA and Recapture
Capital cost allowance spreads a building’s cost over time, at 4% a year for a Class 1 building, but it is optional, cannot create or increase a rental loss and never applies to land. When you sell, the CCA you claimed is generally added back to income as recapture, which is fully taxable rather than taxed like a capital gain.
Personal Use and Family Tenants
If you rent part of your home, expenses for the whole property are split between your space and the rental, for example by square metres or number of rooms. A cottage you use yourself for part of the year is split between personal and rental use too. Renting to a relative or friend below market rent can mean no rental loss is allowed.
Principal Residence Rules
Renting part of your home generally doesn’t change its use if the rental is secondary to your own use, you make no structural changes and you claim no CCA. Turning the whole home into a rental is treated as a sale at fair market value, but a subsection 45(2) election can keep it your principal residence for up to four years if no CCA is claimed.
Selling a Rental Property
In 2026, half of a capital gain is taxable; the proposed move to two-thirds was cancelled. Recapture is added on top. A family can designate only one principal residence for each year, and a housing unit, including a rental, sold within 365 days of buying it is generally taxed as business income unless a life event such as a death, separation or job loss applies.
Rental Returns and Filing for Landlords
Rent arrives with no tax withheld, which can leave you with a balance owing at filing time. If your net tax owing is more than $3,000 this year and in either of the two previous years, the CRA expects quarterly instalments, due March 15, June 15, September 15 and December 15. We help with:
T776 statements for each property you own or co-own
Instalment estimates when rental income leaves tax owing
Schedule 3 and principal residence designations when you sell
Why Ottawa Landlords Choose BBA Tax
Rental files at BBA Tax are prepared by a team that includes bookkeepers, led by Karim Bitar, our Lead Accountant and an ELITE Certified QuickBooks ProAdvisor. If you own several units, we can keep each property’s income and expenses in QuickBooks through the year, so tax season becomes a review of finished numbers rather than a hunt through bank statements.
Our office is at 203-307C Richmond Road in Westboro, and we also work remotely with landlords elsewhere in Canada. Each rental property adds from $100 to a personal return, so you can see your cost up front with our 5-minute instant quote.
What We Handle for Landlords
Whether you own one basement unit or a handful of properties, these are the pieces we take care of.
T776 rental income statements
CCA schedules and recapture tracking
Short-term rental HST returns
Capital gains when you sell
T2 returns for rental corporations
Rental Property Tax FAQ
Can I deduct my mortgage payments on a rental property?
Only the interest. You can deduct interest on money borrowed to buy or improve a rental property, but not the principal portion of your payments. Property taxes for the period the property was available for rent, insurance premiums for the year, and minor repairs and maintenance are deductible too. Land transfer tax paid when you bought is not deducted; it is added to the property’s cost.
Do I have to charge HST on an Airbnb in Ontario?
Only if you are registered, or required to register, for GST/HST. Short-term accommodation, meaning stays of less than one month at more than $20 a night, is taxable. You must register once your taxable sales pass $30,000 in a single calendar quarter or over four consecutive quarters, then charge 13% HST. If you aren’t registered, an accommodation platform that handles the booking may have to collect the tax instead.
What tax do I pay when I sell a rental property?
You pay tax on the capital gain, which is the sale price minus your adjusted cost base and selling costs, and half of that gain is taxable in 2026. If you claimed CCA, the amount recovered on the sale is added to income as recapture and fully taxed. A property held less than 365 days is generally taxed as business income instead. You report the sale on Schedule 3 of your return.
Can a rental loss reduce my other income?
Yes. If you incurred the expenses to earn rental income, a rental loss can be deducted from your other income, such as employment income. Two limits apply: capital cost allowance cannot be used to create or increase the loss, and if you rent to someone you know for less than you would charge a stranger, you may not be able to claim a loss at all.
Guides for Property Owners
Go deeper with these guides from the BBA Tax blog:
- Step-by-Step Guide to Filing Personal Taxes in Canada
- CRA Tax Instalments in 2026: Who Has to Pay and How to Avoid Interest
- 2026 Guide to GST/HST Registration: When You Must Register & How to File
- How to Separate Personal and Business Expenses: A Beginner’s Guide
- How Far Back Can the CRA Audit You? What Canadians Need to Know
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