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.
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.
| Parameter | Value | Source | Last updated |
|---|---|---|---|
| Federal personal income tax brackets and rates for 2026. | Rate schedule | canada.ca | Effective 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 schedule | canada.ca, revenuquebec.ca | Effective 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. | 16,452 | canada.ca | Effective 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 schedule | canada.ca, revenuquebec.ca | Effective 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 schedule | canada.ca | Effective 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 acquisition | 0.5 | canada.ca | Effective 2026-01-01Updated dead Canada.ca CRA URL to verified 200 OK official publication |
| Quebec abatement of basic federal tax | 0.165 | canada.ca | Effective 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 schedule | canada.ca | Effective 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. | 14,829 | canada.ca | Effective 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 schedule | canada.ca | Effective 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 schedule | canada.ca | Effective 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 schedule | canada.ca | Effective 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?
Should I claim capital cost allowance on a rental building?
Can capital cost allowance create a rental loss?
How is a rental loss treated?
How do co-owners split rental income?
Is my data private?
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