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Rental Income

Explore rental income in Canadian real estate - how it’s earned, reported, and managed for tax and investment purposes.

Rental Income

June 06, 2025


What is Rental Income?

Rental income is the revenue received by a property owner from tenants who occupy residential or commercial space under a lease or rental agreement.

Why Rental Income Matters in Real Estate

In Canadian real estate, rental income is considered taxable and must be reported to the Canada Revenue Agency (CRA).


Sources of rental income include:
  • Monthly rent payments
  • Additional fees (e.g., parking, utilities)
  • Short-term or vacation rentals



Landlords may deduct eligible expenses such as mortgage interest, property taxes, insurance, and maintenance costs to determine net income.



Understanding rental income is essential for investors, landlords, and homeowners generating income from secondary suites or short-term leases.

Example of Rental Income in Action

A homeowner reports rental income from a basement suite and deducts utility and repair expenses when filing their tax return.

Key Takeaways

  • Earned from residential or commercial leases
  • Must be reported as taxable income
  • Eligible expenses reduce net income
  • Applies to long- and short-term rentals
  • Key to property investment strategy

Related Terms

Additional Terms

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Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

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