Understanding Income Tax and Rentable Space in Primary Residence

[alexx3]

Hi community, 

If I purchase a property and live in a the basement suite, and rent out the upstairs to get some additional income, how much income tax do I need to claim on this? How much profit would I actually make once the tax is deducted? Assuming $2000 per month rental. 

thanks

[TurboTaxBrenda1]

 You will claim the rent you receive. Then you will claim expenses.  You can make a mock income tax return- with the numbers and see what your result will be. 

The CRA lets landlords claim certain expenses that are related to the rental property. Expenses such as the following can be claimed:

• advertising
• home insurance
• mortgage interest
• property taxes
• heat
• hydro
• water

If you rent out a portion of your principal residence, such as a room or a basement apartment, you can only claim the percentage attributed to your rental property. The CRA bases the percent on the square footage you rent out of your total home. For example, if your basement apartment is 800 square feet and the total square footage of your home is 2,000, you can claim only 40 percent of the expenses.

If you are a first time home buyer- you can also claim the first time home-buyers credit.