Rental Income Tax Calculator Canada

This rental income tax calculator for Canada works out net rental income after expenses, mortgage interest and CCA, and the federal and provincial tax.

Rental Income Tax Calculator Canada
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Advanced options
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Income tax on the rental —
Net rental income (T776 line) —
After-tax rental income —
Gross rental income —
Total deductible expenses —
Deductible mortgage interest —
Net rental income before CCA —
Capital cost allowance claimed —
Capital cost allowance available —
Tax deferred by the CCA claim —
Federal tax on the rental —
Provincial tax on the rental —
Total tax without the rental —
Total tax with the rental —
After-tax rental income per month —
Marginal rate on the rental —

We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.

What it does

The Rental Income Tax Calculator works out the tax you owe on a Canadian rental property: gross rent less deductible expenses and mortgage interest, the optional capital cost allowance on the building, and the federal and provincial tax the resulting net rental income adds to your return.

Data sources & parameters

The figures below drive this calculator. We keep them aligned with the latest official guidance, and each result recalculates automatically whenever a value changes.

ParameterValueSourceLast updated
Federal personal income tax brackets and rates for 2026.Rate schedulecanada.caEffective 2026-01-01Verified unchanged at CRA; citation replaced, it previously named a fund manager rather than a government page and carried no URL.
Provincial and territorial personal income tax brackets and rates for 2026.Rate schedulecanada.ca, revenuquebec.caEffective 2026-01-01BC lowest rate corrected 5.06 to 5.6 pct; PE fourth band to 142520 with a new 20 pct band over 200000. MB kept at 47000/100000: its indexation is paused, and CRA payroll tables confirm it.
Maximum federal basic personal amount for 2026.16,452canada.caEffective 2026-01-01Verified 16452 at the CRA indexation page; the citation was the bare text CRA 2026 with no URL a reader could follow.
Provincial and territorial basic personal amounts for 2026, claimed at each jurisdiction lowest rate.Rate schedulecanada.ca, revenuquebec.caEffective 2026-01-01NL raised from 11188 to 13094, retroactive to 1 January 2026 (CRA T4127 July 2026, 123rd edition; payroll applies a prorated 15000 from July). Other 12 amounts unchanged. audit 2026-09-23
Common CCA class declining-balance rates {class: rate} (Class 13 is straight-line over lease term; Class 12 is 100%)Rate schedulecanada.caEffective 2026-01-01Common CCA class declining-balance rates {class: rate} (Class 13 is straight-line over lease term; Class 12 is 100%)
Half-year (first-year) rule: only 50% of the net additions are subject to CCA in the year of acquisition0.5canada.caEffective 2026-01-01Updated dead Canada.ca CRA URL to verified 200 OK official publication
Quebec abatement of basic federal tax0.165canada.caEffective 2026-01-01Quebec refundable federal tax abatement (reduces federal tax for Quebec residents)
Ontario surtax for 2026: 20 pct of basic Ontario tax over 5818 plus 36 pct over 7446. Prince Edward Island has no surtax.Rate schedulecanada.caEffective 2026-01-01Label names the year in the auditor format. Thresholds 5818 and 7446 unchanged (CRA T4032ON effective 2026-01-01). audit 2026-09-23
Minimum federal basic personal amount for 2026, reached at net income of 258,482 and above. Between 181,440 and 258,482 the amount falls in a straight line from the maximum. The Yukon amount follows the same formula.14,829canada.caEffective 2026-01-01
Manitoba basic personal amount phase-out for 2026: full amount at net income up to 200,000, falling in a straight line to zero at 400,000.Rate schedulecanada.caEffective 2026-01-01
Ontario tax reduction for 2026 (no dependants): tax and surtax are reduced by the lesser of that amount and twice the basic reduction amount minus it.Rate schedulecanada.caEffective 2026-01-01
British Columbia tax reduction for 2026 (BC announcement of 17 February 2026): up to 690 at taxable income to 25,570, then falling at 3.56 percent of the excess until it reaches zero at 44,952.Rate schedulecanada.caEffective 2026-01-01Corrected from the January 2026 payroll table (575, ending 41,722) to the July 2026 edition's annual (Option 2) formula: maximum 690, 3.56 percent, zero above 44,952.

We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.

The formula

Net rental income = rent − expenses − mortgage interest − CCA; tax = tax(other income + net rental) − tax(other income)

How it works

It subtracts your deductible operating expenses and mortgage interest from the rent, prorated for your ownership share and any personal use, then applies a Class 1 capital cost allowance if you ask for one. It stacks the net rental income on top of your other taxable income and reports the difference in federal and provincial tax, which is the true marginal cost of the rental.

Where it is used

  • Estimating the tax bill on a rental before filing form T776
  • Seeing how much of a rental profit capital cost allowance can shelter
  • Splitting rental income and tax between co-owners
  • Checking the effect of a rental loss on your other income

Worked example

An Ontario landlord earning CA$85,000.00 from employment collects CA$34,800.00 of rent, deducts CA$9,000.00 of operating costs and CA$14,000.00 of mortgage interest, and reports … of net rental income. Stacked on top of their salary that income is taxed at a marginal rate of …, costing … federally and … in Ontario tax — … in total, leaving … a year or … a month.

What the rental income tax calculator does

The calculator takes a Canadian rental from gross rent to the tax it adds to your return. It subtracts deductible operating expenses and the interest part of your mortgage payments, applies an optional capital cost allowance on the building, and adds the net rental income on top of your other taxable income, so the tax it reports is the real marginal cost.

Rental income has no special rate. It is added to employment income, pensions, interest and everything else on your T1 and taxed at whatever bracket the total reaches. A landlord earning $45,000 and one earning $250,000 pay very different tax on the same $12,000 of rental profit.

A worked example

An Ontario landlord with $85,000 of other income collects $34,800 of rent a year and pays $9,000 of operating expenses and $14,000 of mortgage interest. Net rental income is $11,800. Added to the $85,000, it raises the year’s tax from about $16,230 to about $19,763, so the rental adds about $3,533: about $2,419 federal and $1,114 provincial, a combined rate of about 29.9%. The landlord keeps about $8,267 of the rental profit, about $689 a month.

What you can deduct

Current expenses of earning the rent are deductible in the year incurred. The main lines on form T776 are:

  • Property tax charged by the municipality.
  • Insurance on the building.
  • Condo or strata fees, excluding any portion allocated to the reserve fund for a capital project.
  • Utilities you pay rather than the tenant.
  • Repairs and maintenance that restore rather than improve. Replacing a broken pane is a repair; replacing every window with triple glazing is a capital improvement that goes into the CCA class.
  • Property management and advertising.
  • Professional fees for accounting and legal work on the tenancy.
  • Mortgage interest, and only the interest.

Enter the interest from your lender’s annual statement, not your total payments. As the amortization advances, more of each payment is non-deductible principal, which is why taxable rental income drifts up while cash flow stays flat.

Capital cost allowance on the building

A rental building is Class 1 property with a 4% declining-balance rate. Land is never depreciable, so only the building part of the price goes into the class, and the split usually follows the municipal assessment. Two rules shape the claim, and the calculator models both.

The half-year rule applies in the year the building is added to the class: only half the addition counts that year, so a $320,000 building produces a first-year claim of $6,400 instead of $12,800. Buildings that become available for use from 2024 to 2027 normally qualify for the Accelerated Investment Incentive, which suspends the half-year rule; tick the box in the advanced options only for a building that does not qualify.

The rental loss restriction caps CCA at net rental income before CCA. With $11,800 of net rental income and $16,000 of CCA available, only $11,800 can be claimed and the rest of the undepreciated capital cost stays in the class for a later year.

Should you claim it at all

CCA defers tax rather than removing it. Each dollar claimed lowers the undepreciated capital cost, and on sale the gap between the building proceeds and the reduced UCC is recaptured and taxed as ordinary income in that one year, on top of the separately taxable capital gain. Claiming makes most sense when your marginal rate is high now and expected to be much lower at sale, or when you plan to hold indefinitely. It rarely makes sense on a former principal residence, because CCA can put part of the principal residence exemption at risk. Speak to an accountant before you start a claim; not starting is easier than unwinding one.

Ownership shares and personal use

Rental income follows legal ownership. If you own a duplex jointly with your spouse, each reports their share of rent and expenses and pays tax at their own rate. Set the ownership percentage and the tool prorates everything.

If you rent out the basement of the home you live in, only the rented share of shared expenses is deductible, usually apportioned by floor area or rooms. Enter a personal-use percentage and the calculator reduces the deductible expenses while keeping the rent you collected.

Reading the results

The headline is the tax the rental adds, split federal and provincial. Net rental income is the figure that goes from form T776 to your T1. The marginal rate on the rental is the combined rate the rental income actually attracted, often higher than landlords expect because it sits on top of everything else. Tax deferred by the CCA claim shows what CCA saved this year, remembering that it is paid back in the year you sell.

All figures are estimates from the numbers you enter and are general information only, not tax, legal or investment advice. Provincial surtaxes, health premiums, other credits and Quebec’s separate return are not modelled. Check your figures against your lender’s interest statement and your records, and speak to a qualified Canadian accountant before filing.

About This Rental Income Tax Calculator

Use this rental income tax calculator to get an instant, accurate estimate. The figures follow official CRA guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.

Tax year 2026 · Data last reviewed 2026-10-19

Frequently asked questions

Is the whole mortgage payment deductible against rental income?
No. Only the interest is deductible. The principal repays your own borrowing, so it never appears on form T776. That is why a property can show taxable rental income while producing little cash: late in an amortization most of each payment is principal, so taxable income rises even though your bank balance does not.
Should I claim capital cost allowance on a rental building?
It depends on your plans. CCA reduces taxable rental income now, but it also reduces the undepreciated capital cost, and when you sell, the CCA previously claimed is added back as recaptured depreciation and taxed as ordinary income that year. It is a deferral, not a saving. It works best when your income is high now and expected to be lower at sale, and it is usually a poor idea on a property that was, or may become, your principal residence.
Can capital cost allowance create a rental loss?
No. The Income Tax Act prevents CCA from creating or increasing a rental loss. The claim is capped at net rental income before CCA, so at most it takes taxable rental income to zero. The calculator applies that cap, which is why the amount claimed can be less than the amount available.
How is a rental loss treated?
A real rental loss from a property held with a reasonable expectation of profit can be deducted from your other income for the year, which is why the calculator shows negative tax when expenses exceed rent. The CRA looks closely at repeated losses, at properties rented to family below market rent and at properties with heavy personal use, so keep records that show the rental is a commercial undertaking.
How do co-owners split rental income?
Each owner reports income and expenses in proportion to their ownership interest, not by whose account the rent lands in. Set your ownership share in the advanced options and the calculator prorates rent, expenses and CCA together. Each owner pays tax at their own marginal rate, which is why co-owning with a lower-income spouse can reduce the family's total tax.
Is my data private?
Yes. Every figure is calculated in your browser. Nothing you type is uploaded, stored or shared, and no account is needed.

About the author

Taha Kheirandish

Written and reviewed by

Taha Kheirandish

Economics student and independent researcher

Taha Kheirandish reads tax codes the way other people read maps — to find out where a system actually leads, not where it claims to go.

He is an economics student, and his work here is comparative by design. A pension deferral bonus in Quebec, a commuting allowance in Germany, a rent-increase ceiling in the Netherlands: each is a decision a government made about how money should move, and each reads differently once you set it beside eight others. He builds and checks these calculators across nine markets from primary sources — the regulation rather than a summary of it, the ministry’s own circular rather than a news item quoting it.

That is the editorial standard of the site as well as his habit. Every rate, threshold and bracket here carries the document it was read from and the date it takes effect, and gets re-checked when the law moves rather than when someone happens to notice.

He is a researcher, not a licensed adviser, and nothing on this site is personal financial advice. It is arithmetic done carefully with its sources shown — so that you can check it, and take it to someone who is.

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