June 30, 2019
Tax on cottage rental income never takes a holiday
Renting out a cottage for extra income should be an easy process when claiming the income made on your taxes unless, however, you live in the property part-time. Deductions and expenses can only be applied for the time that you are actually renting out the property and should be carefully recorded. Larger expenses are considered capital costs in many cases. If you decide to make it your full time residence, you don’t have to pay a capital gains tax nut the CRA has to know it’s no longer a rental income. It’s best to seek professional help if you are unsure what to do.
“Things can get complicated when cottage owners use the property for part of the year.”