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

Secondary Suite

A secondary suite is a self-contained residential unit within a single-family home, often in a basement or accessory building, designed for rental or. more

Unpermitted Work

Unpermitted work refers to construction or renovations done without obtaining the necessary approvals or permits from the local municipality.. more

Absorption Cost

Absorption cost in real estate refers to the total cost per unit or square foot of space, including direct and indirect costs, that is recovered. more

Walkability

Walkability refers to how friendly an area is to walking, measured by the accessibility of amenities, safety, sidewalk infrastructure, and overall. more

Urban Planning

Urban planning is the process by which municipalities and regional governments design and regulate land use, infrastructure, and community. more

Transfer of Ownership

Transfer of ownership is the legal process by which the title of a property is passed from one party to another, typically through sale, inheritance,. more

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