Rent is income and the sale is a gain. Here is how each is taxed.
Rental property is taxed twice over its life: on the income while you own it, and on the gain when you sell. These guides cover both, plus the traps that catch new investors.
These guides explain the rules. They do not calculate depreciation (capital cost allowance) or recapture, so ask an accountant to run those numbers.
Your reading list
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1Start here 2 min read
Rental Property Tax in 2 Minutes
How rental income, depreciation and the sale are taxed, in two minutes.
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2Step 2 2 min read
Capital Gains Tax in 2 Minutes
How the gain when you sell is taxed, and why only half counts.
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3Step 3 2 min read
Adjusted Cost Base in 2 Minutes
Work out what you really paid, which sets the size of your gain.
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4Step 4 Calculator
Capital Gains Tax Calculator
Estimate the tax on a sale in your province.
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5Step 5 2 min read
Selling Your Home: Tax in 2 Minutes
Read the part on the 365-day flipping rule, which applies to rentals too.
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6Step 6 7 min read
How to Trace HELOC Interest for the CRA
If you borrow against one property to buy another, keep the paper trail.
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7Step 7 2 min read
Cash Damming in 2 Minutes
Advanced: pay rental costs from a HELOC and use rent to pay down your own mortgage.
What these guides do not cover
- Capital cost allowance and recapture calculations
- GST/HST on property sales and short-term rentals
- Non-resident owners and owning through a corporation
This is education, not tax, legal or investment advice. Talk to a licensed Canadian chartered professional accountant or certified financial planner before you act.
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