Personal portion of expenses
If you rent part of the building where you live, you can claim the amount of your expenses that relate to the rented area of the building. You have to divide the expenses that relate to the whole property between your personal part and the rented area. You can split the expenses using square metres or the number of rooms you are renting in the building.
For example, if you rent 4 rooms of your 10-room house, you can deduct:
- 100% of the expenses that relate only to the rented rooms, such as repairs and maintenance of the rooms; plus
- 40% (4 out of 10 rooms) of the expenses that relate to the whole building, such as taxes and insurance.
If you rent rooms in your home to a lodger or roommate, you can claim all of the expenses for the part you are renting. You can also claim a portion of the expenses for the rooms in your home that you are not renting that both you and your lodger or roommate use. You can use factors such as availability for use or the number of persons sharing the room to calculate the allowable expenses. You can also calculate these amounts by estimating the percentage of time the lodger or roommate spends in these rooms (for example, the kitchen and living room).
Fill in "Part 4 – Expenses" on Form T776 as follows:
- enter the full amount of each expense under "Total expenses"
- enter the part of each expense that was for personal use under "Personal portion"
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add up the amounts in each column and enter the result for"Total Expenses" on amount A, and enter the "Personal portion" on line 9949
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subtract the personal portion total from the total expenses to get your total deductible expense. Enter this result on amount 7
If you are a co-owner or partner in a partnership, enter the personal portion of the expenses for all co-owners or partners at line 9949.
You cannot claim the expenses for renting part of your property if you have no reasonable expectation of making a profit.
You can read more here : https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/rental-income/rental-expenses...
