Rental Income Tax Calculator
Calculate the tax on your rental property income after deducting operating expenses, mortgage interest, and Capital Cost Allowance (CCA).
Rental Property Details
Rental Income Tax Summary
CCA restricted: $16,000 was available on the building, but Regulation 1100(11) does not let CCA create or increase a rental loss, so the claim stops at $5,800. The remaining $10,200 stays in the Class 1 pool and can be claimed in a later year.
Tax as % of Rent Collected
After-tax cash flow
How it works: Rental income is added to your other income and taxed at your marginal rate. You can deduct operating expenses, mortgage interest, and Capital Cost Allowance (CCA). CCA is 4% of the building value (excluding land) for Class 1 residential properties, but CCA can only reduce net rental income to zero — it cannot create or increase a rental loss (Regulation 1100(11)). Rental losses from your other expenses can still offset other income in Canada.
Rental Income Tax in Canada
Rental income in Canada is taxed at your marginal rate. You can deduct reasonable expenses incurred to earn the rental income, including property taxes, insurance, repairs, management fees, mortgage interest, and CCA.
Capital Cost Allowance (CCA): Most rental buildings acquired after 1987 fall under Class 1 with a 4% declining balance rate. CCA is calculated on the building value only — land is not depreciable. Note that CCA is a non-cash deduction that reduces your tax but does not affect actual cash flow, and you cannot use it to create or increase a rental loss.
Rental losses: If your rental expenses exceed your rental income, you can deduct the loss against your other sources of income, reducing your overall tax bill (CCA cannot be claimed to create or increase the loss).
Frequently asked questions
How is rental income taxed in Canada?
Rental income is added to your total income and taxed at your marginal federal and provincial tax rate. You can deduct reasonable expenses incurred to earn rental income, including property taxes, insurance, repairs, management fees, and mortgage interest.
What is Capital Cost Allowance (CCA) on rental property?
CCA is a non-cash tax deduction for the depreciation of your rental building. Most rental buildings acquired after 1987 fall under Class 1, a 4% declining balance rate. CCA is calculated on the building value only — land is not depreciable. Claiming CCA reduces your tax but does not affect actual cash flow, and you cannot use it to create or increase a rental loss.
Can I deduct a rental loss from my other income?
Yes. If your rental expenses exceed your gross rental income and you incurred them to earn income, you can deduct the rental loss against your other sources of income. The one exception is CCA: you cannot claim CCA to create or increase a rental loss.
Sources
Reflects 2026 tax year rates.
Related Calculators
Related Calculators
Land transfer tax
LTT/PTT by province including first-time buyer rebates
Ontario land transfer tax
Ontario LTT + Toronto MLTT with first-time buyer rebates
BC property transfer tax
BC PTT with the first time home buyers' exemption
Quebec welcome tax
Droits de mutation with Montreal and other city rates
All calculators
Browse all Canadian tax and property calculators