Real Estate

2nd property purchase

  • Last Updated:
  • Sep 6th, 2020 5:17 pm
[OP]
Newbie
Nov 5, 2013
15 posts
10 upvotes

2nd property purchase

Good afternoon all,
I have a question that I'm sure some of you might to able to answer.
My wife and I bought a second house and property in a rural area this past June.
We are letting my son, his future wife and our 2 little grandsons live there.
They are paying for our small mortgage, taxes and insurance for the house.
It's a hell of a lot better and cheaper for them than the ever increasing rents in our area.
As an added bonus it builds up equity for us (them) with every payment.
We are aware of the Capital Tax rules for non principal residences but don't really care, because we will eventually gift the house and property to them.
My question is this..... Do I have to claim their payments as our income even though I make no profit of any kind.
Every cent they pay goes for the mortgage, taxes and insurance.
I think I could claim the mortgage, taxes and insurance as investment expenses, however, I would rather just not claim any income or expenses, which have a net balance of Zero anyway.
I haven't even looked at the CRA website yet, just putting my feelers out for some thoughts.
3 replies
Sr. Member
Dec 8, 2003
926 posts
8 upvotes
Technically it is income and should be reported. Also, just because you are not making cash doesn’t mean you have no income as only the interest component of your mortgage is deductible as an expense.
Sr. Member
May 29, 2012
511 posts
177 upvotes
Southern Ontario
ptxpress wrote: Technically it is income and should be reported. Also, just because you are not making cash doesn’t mean you have no income as only the interest component of your mortgage is deductible as an expense.
This guy is correct. You need to claim the rent as income. You can also recognize the mortgage interest, insurance, utilities(if you pay), property tax, and repairs as expenses to offset your rental income.
Sr. Member
Oct 22, 2016
586 posts
456 upvotes
Comox Valley
Claim it, in the long run I think you will be happier.
As above post state, claim everything that is a suitable expense.

I suggest get a good accountant, if you are not use to these income/expanses. You do not have to go to a high priced firm for that. I have even got 2 good accountants (USA & Canada taxes),from Craigslist, and they were better than the Canadian wide firm I was dealing with.

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