Quote:
Originally Posted by Frequitude
-Depreciation (CCA) if you commit to selling it one day as a revenue property (i.e. pay capital gains if there are any)
-uhhh, property taxes?!? (forget)
-other general expenses and maintenance
Depreciation is the lesser known one. I didn't realize that until this year after 3 years of renting, so I should be getting a decent return once I go claw it back.
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You can only claim depreciation if you have a positive rental income, depreciation cannot be used to create or increase a loss on a rental property. So in this case, if he's already losing 150 a month, he probably will have a loss. (Granted mortgagep principal isn't tax deductible, but it's doubtful that is 150 a month initially.)
Property taxes are deductible on your statement of rental income.
Maintenance is deductible, but you have to be a bit careful with that one, since some things that you might consider maintenance the CRA considers as a capital improvement to the property. Direct replacements of things that have worn out are ok, but if you are upgrading to a "better" version, then its a capital expenditure that you have to put it into the correct CCA class and claim it over time.