First year as landlord

[swak]

Did not want to hijack the other thread on COVID19 mortgage benefits/deferrals...

But, 2019 was my first year as a landlord, I am told i can write off (mortgage, prop tax, condo fee, home insurance, and any other associated expenses). Is this just mortgage interest or all expenses?
Is there truly a benefit to deferring mortgage payments for tax purposes? Don't really see the benefit of incurring interest...

[Disoblige]

I am curious on this too and found this helpful. But any real world tips and advice would be nice.

https://rentals.ca/blog/tax-deductio...aim-but-should

[arcticcat522]

You can only write off the mortgage interest. Not the principal portion of the payment. Also, keep any receipts for repairs/maintenance. You can claim them. Most likely you can write off a potion of your vehicle expenses/fuel, but it's typically not worth tracking it. (Only whats used to collect rent) condo fees, if you have them are also a good write off. Office supplies/advertising/cleaning expense, yep write that off too. Lots of little things.

Edit...the above article talks about pretty much everything I just said....

[Disoblige]

Wonder how many people are taking a loss for rental income.. I mean depending on your mortgage interest and condo fees, it could very well be over your monthly rent income

[arcticcat522]

Depends how you think about it. I am cash flow negative for the past few years. But I gain more equity than I am negative cash flow.....well, maybe. With how much the value of the unit has gone down. I'm in too deep and I have no problem holding until things turn around. Just hope it's in my lifetime.

[dirtsniffer]

Can claim ptax as well

[Disoblige]

This quote is hidden because you are ignoring this member. Show Quote

Depends how you think about it. I am cash flow negative for the past few years. But I gain more equity than I am negative cash flow.....well, maybe. With how much the value of the unit has gone down. I'm in too deep and I have no problem holding until things turn around. Just hope it's in my lifetime.

Negative cash flow and claiming a rental loss is 2 different things though. I am saying how many people actually taking a rental loss on taxes. Seems difficult unless you are paying a ton of condo fees/mortgage interest as well as utilities.

[arcticcat522]

This quote is hidden because you are ignoring this member. Show Quote

Negative cash flow and claiming a rental loss is 2 different things though. I am saying how many people actually taking a rental loss on taxes. Seems difficult unless you are paying a ton of condo fees/mortgage interest as well as utilities.

Right, misunderstood. I think I had a loss for tax purposes 1 or 2 years. Very minor tho.

[msommers]

This quote is hidden because you are ignoring this member. Show Quote

Negative cash flow and claiming a rental loss is 2 different things though. I am saying how many people actually taking a rental loss on taxes. Seems difficult unless you are paying a ton of condo fees/mortgage interest as well as utilities.

I was putting in almost $400/month because of the change in the rental market. Condo fees have really been going up mainly from condo insurance going through the roof (expected +45% next year!).

If you've owned the property for awhile and/or refinance to get your monthly payments lower it's easy to see how everything could be covered. Bit between property taxes and condo fees, coupled with a significantly depressed rental market, it's not hard to see how when all said and done, some landlords are putting in their own dollars.

If I had to buy all over again, I'd buy a house and suite the basement. Apparently paying $1,000-1,200 is reasonable for a basement suite

[killramos]

This has always made me wonder, does a financial mortgage product exist to still secure aggressive interest rates but never pay the principal?

I mean there really is no incentive (from a tax perspective) to pay down principal on a rental?

[Disoblige]

This quote is hidden because you are ignoring this member. Show Quote

I was putting in almost $400/month because of the change in the rental market.

You were claiming $400/month rental income tax loss?
Seems like a lot, which means your negative cash flow would be even more than $400?

Anywho, I don't mean to derail. Current landlords should list what you are actually deducting to make it useful for first year landlords. Give examples if possible.

[arcticcat522]

This quote is hidden because you are ignoring this member. Show Quote

This has always made me wonder, does a financial mortgage product exist to still secure aggressive interest rates but never pay the principal?

I mean there really is no incentive (from a tax perspective) to pay down principal on a rental?

Don't think something like that exists, but, HELOC/re finance when enough equity is there.

[sabad66]

2019 was first year for my rental. I am using the following expenses:
- mortgage interest
- condo fees
- utilities while it was vacant
- insurance
- property tax
- rentfaster listing fee
- bathtub reglazing
- window replacement (yes I know this is borderline CCA but I was replacing a window that was leaking and it was very basic picture window that I don’t think will add value to property so I’m hoping this won’t be an issue for only $800 cost)
- unfortunately didn’t save receipts for paint and other materials while I was prepping it for rent but I did would definitely use these
- considering adding my tax software fee. Anyone else do this???

All in all I’m looking at a rental loss this year but next year it will be in the black barring any unexpected maintenance costs.

[ExtraSlow]

You can claim tax preparation fees on personal income tax anyway, rentals or not.

[sabad66]

This quote is hidden because you are ignoring this member. Show Quote

You can claim tax preparation fees on personal income tax anyway, rentals or not.

Are you sure about that? According to this link it’s only allowed for self employed or rental income (guess this answers my question)
https://www.google.ca/amp/s/turbotax...enses-5421/amp

[ExtraSlow]

This quote is hidden because you are ignoring this member. Show Quote

Are you sure about that? According to this link it’s only allowed for self employed or rental income (guess this answers my question)
https://www.google.ca/amp/s/turbotax...enses-5421/amp

Well fuck me, looks like I was wrong.

[msommers]

This quote is hidden because you are ignoring this member. Show Quote

You were claiming $400/month rental income tax loss?
Seems like a lot, which means your negative cash flow would be even more than $400?

Anywho, I don't mean to derail. Current landlords should list what you are actually deducting to make it useful for first year landlords. Give examples if possible.

Total cost of everything (mortgage, condo fees, insurance, property taxes) = rental income + my $$ to cover it all. Even still I was positive when it came to tax time so the government is happy.

It sucked, let me tell you. But I felt ever so slightly fine with it because I knew I wasn't alone. And now I live back in my rental again so it doesn't much matter

[Disoblige]

This quote is hidden because you are ignoring this member. Show Quote

Total cost of everything (mortgage, condo fees, insurance, property taxes) = rental income + my $$ to cover it all. Even still I was positive when it came to tax time so the government is happy.

Oh ok. This thread was about income tax so I was only talking about rental income net positive or loss.

So with your situation you were negative cash flow but you were not doing rental loss on your taxes as your rental income > claimable expenses

[gwill]

You can write off lots of stuff for your main residence that you would use for your rental. Theres a lot of overlap with items that would be required for both. I'd write off "gifts" or "dinners" with your tenants.

You should be chatting with whoever is doing your taxes as you should maximize every expense possible.

[Disoblige]

This quote is hidden because you are ignoring this member. Show Quote

You should be chatting with whoever is doing your taxes as you should maximize every expense possible.

Lotta people use tax software... way cheaper.