Rental Income Tax Calculator
Calculate the tax on your rental property income after deducting operating expenses, mortgage interest, and Capital Cost Allowance (CCA).
Rental Property Details
Rental Income Tax Summary
CCA restricted: $16,000 was available on the building, but Regulation 1100(11) does not let CCA create or increase a rental loss, so the claim stops at $5,800. The remaining $10,200 stays in the Class 1 pool and can be claimed in a later year.
Effective Tax Rate
0.0%After-Tax Cash Flow
$5,800How it works: Rental income is added to your other income and taxed at your marginal rate. You can deduct operating expenses, mortgage interest, and Capital Cost Allowance (CCA). CCA is 4% of the building value (excluding land) for Class 1 residential properties, but CCA can only reduce net rental income to zero — it cannot create or increase a rental loss (Regulation 1100(11)). Rental losses from your other expenses can still offset other income in Canada.
Rental Income Tax in Canada
Rental income in Canada is taxed at your marginal rate. You can deduct reasonable expenses incurred to earn the rental income, including property taxes, insurance, repairs, management fees, mortgage interest, and CCA.
Capital Cost Allowance (CCA): Residential rental buildings fall under Class 1 with a 4% declining balance rate. CCA is calculated on the building value only — land is not depreciable. Note that CCA is a non-cash deduction that reduces your tax but does not affect actual cash flow.
Rental losses: If your deductible expenses exceed rental income, the loss can be used to offset your other income sources, reducing your overall tax bill.
Frequently asked questions
How is rental income taxed in Canada?
Rental income is added to your total income and taxed at your marginal federal and provincial tax rate. You can deduct reasonable expenses incurred to earn rental income, including property taxes, insurance, repairs, management fees, and mortgage interest.
What is Capital Cost Allowance (CCA) on rental property?
CCA is a non-cash tax deduction for the depreciation of your rental building. Residential rental buildings fall under Class 1 with a 4% declining balance rate. CCA is calculated on the building value only — land is not depreciable. Claiming CCA reduces your tax but does not affect actual cash flow.
Can I deduct a rental loss from my other income?
Yes. If your deductible rental expenses exceed your rental income, the resulting loss can be used to offset other income sources such as employment or business income, reducing your overall tax bill for the year.
Sources
Last updated April 2026. Reflects 2026 tax year rates.
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