Companies such as Vacation Rental by Owners, AirBnB and others have made it easy to rent out your vacation home to travellers, but the Canada Revenue Agency requires that you report revenue you earn from renting out your home as income. However, the CRA also allows you to deduct business expenses from the revenue you report. For example, if you earn $200 from a renter, but you spend $15 to advertise the property to potential renters, you have a profit of $185. You can write off all kinds of expenses, such as mortgage payments, utility bills, furnishings, cleaning fees and any costs related to maintaining the property as a rental. If you use the vacation home for personal use, you cannot deduct expenses related to personal use. To explain, imagine you rent out your home to travellers for half the year and use it for yourself the other half of the year. Your annual water bill is $600. In this case, you can write off $300 as a business expense against your rental income, but the other $300 is a personal expense that’s not eligible for a write off. When you first get started, you may be able to track your income and expenses with a simple spreadsheet or even in a notebook. As you welcome more guests and grow your business, you may want to use real estate accounting software to stay on top of the numbers and streamline the process at tax time.
2017-02-08 00:00:002017-02-08 00:00:00https://quickbooks.intuit.com/ca/resources/taxes/tax-obligations-holiday-rental-propertyTaxesEnglishCheck out your tax obligations when you rent out a property on AirBnB, VRBO or a similar site. Review the basics of rental income and...https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/Holiday-rental-property-with-for-sale-sign-in-front-yard.jpgUnderstanding Tax Obligations for Your Holiday Rental Property
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