Real Estate

Can I Deduct Full Cost of Roof on Rental Property?

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  • Aug 8th, 2020 3:39 pm
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[OP]
Newbie
Aug 5, 2020
4 posts

Can I Deduct Full Cost of Roof on Rental Property?

The shingles on my roof are so bad after only 14 years that I have to replace them this year. Normal life is 25 years. There was a class action lawsuit against this particular brand because of poor quality materials. It’s that bad.

1. Can I deduct the full amount as expense considering the circumstances?

2. Just wondering, will it be ok to NOT deduct the cost at all from my tax return? I figure, if I claim the expense, the income tax payable will be reduced by the same amount as the HST I have to pay the supplier. This way, I reduce the charge to my credit card.
Last edited by Sophie88 on Aug 7th, 2020 11:44 am, edited 1 time in total.
Thread Summary
This is a rental property.
14 replies
Deal Addict
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Dec 10, 2008
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wut? You can't claim home renos on your income tax (for the most part).
Let's hug it out
Sr. Member
Mar 28, 2011
799 posts
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Toronto
Is the house a rental property?
If so then there are ways to do this...

Otherwise no, you can just deduct expenses from your regular job income....
Deal Addict
Mar 3, 2018
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GTA
If this is a business or rental property the new roof would be added to the cost of the building. You can then take a CCA claim (depreciation) on the building. However if the building is eventually sold for more then you paid for it you will have to recapture all years of that CCA claim. That will have to be reported as income in your tax return in the year of sale.
Sr. Member
Feb 19, 2019
847 posts
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Stouffville ON
DaveTheDude wrote: If this is a business or rental property the new roof would be added to the cost of the building. You can then take a CCA claim (depreciation) on the building. However if the building is eventually sold for more then you paid for it you will have to recapture all years of that CCA claim. That will have to be reported as income in your tax return in the year of sale.
If the roof is replaced with the same quality and not an upgrade (ei asphalt shingles with new asphalt shingles) it can be expensed in the year, if it's an improvement over the original roof it would be a capital expenditure.
Here is the link which will help OP determine if this is a current expense or capital.
https://www.canada.ca/en/revenue-agency ... enses.html
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Mar 3, 2018
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senasena wrote: If the roof is replaced with the same quality and not an upgrade (ei asphalt shingles with new asphalt shingles) it can be expensed in the year, if it's an improvement over the original roof it would be a capital expenditure.
Here is the link which will help OP determine if this is a current expense or capital.
https://www.canada.ca/en/revenue-agency ... enses.html
There is a difference in roof repairs that are expensed and a new roof which has a lasting benefit. New roofs are capitalized.

There was one rare case of a half roof put on where the judge did allow it as an expense.

https://turbotax.community.intuit.ca/co ... /00/915511
Sr. Member
Feb 19, 2019
847 posts
923 upvotes
Stouffville ON
DaveTheDude wrote: There is a difference in roof repairs that are expensed and a new roof which has a lasting benefit. New roofs are capitalized.

There was one rare case of a half roof put on where the judge did allow it as an expense.

https://turbotax.community.intuit.ca/co ... /00/915511
No, cra is pretty clear on it.
In the link I have provided explains pretty well.

The cost of repairing a property by replacing one of its parts is usually a current expense. For instance, electrical wiring is part of a building. Therefore, an amount you spend to rewire is usually a current expense, as long as the rewiring does not improve the property beyond its original condition.

replace wire with shingles and it's exactly the same situation.
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[OP]
Newbie
Aug 5, 2020
4 posts
This is a rental property.
Last edited by Sophie88 on Aug 7th, 2020 1:13 pm, edited 2 times in total.
[OP]
Newbie
Aug 5, 2020
4 posts
Thanks for your responses.

Can anybody give their opinion on question no. 2 above? Thanks.
Sr. Member
Feb 19, 2019
847 posts
923 upvotes
Stouffville ON
Sophie88 wrote: Thanks for your responses.

Can anybody give their opinion on question no. 2 above? Thanks.
Can you clarify why you don't want to claim it? is it because you paying cash and they are not charging you hst?
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May 12, 2003
330 posts
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GTA
A lot of times this depends on your own personal preference.

First and foremost, if I was you, i'd recommend you pay pay HST on something like a roof on a house. It's one of the key pieces keeping your house safe. Go with a reputable company that can handle proper warranty. Don't go with the cheapest company out there. a lot asian/indian companies out there will do a roof for $5-6k, claiming 25 year warranty and they completely disappear after.

2nd, as someone has mentioned that unless you are "upgrading" your roof, you are allowed to claim this as an current expense, rather than capital expense.

So if had regular builder grade shingles before, you'd have to get similar grade shingles to be able to claim this amount.

If you get shingles that are better grade, or metal, they will not be considered "original equipment", therefore you'd have to capitalize and do a CCA over the life of the building.

IMO, i'd always recommend to capitalize large expenses such as a roof, primarily because if this claim brings forth an audit, I wouldn't want to deal with it.

But, its your preference.
[OP]
Newbie
Aug 5, 2020
4 posts
senasena wrote: Can you clarify why you don't want to claim it? is it because you paying cash and they are not charging you hst?


I estimate the amount of Income tax savings will be approximately same as the HST savings. If I deduct the whole amount, I might be audited and I have to justify my reasons. I am minimizing the hassle of an audit

This replacement is purely maintenance because the shingles lasted only 14 years, not the warrantied 25 years. I have pictures and documents to prove this is the case. Based on your explanation, I believe I have a strong case that this is pure repairs and maintenance. Still, who wants to speak with those friendly auditors?

Just curious, what will be the downside of not deducting the roof cost when I eventually sell the house?
Sr. Member
Feb 19, 2019
847 posts
923 upvotes
Stouffville ON
Sophie88 wrote: I estimate the amount of Income tax savings will be approximately same as the HST savings. If I deduct the whole amount, I might be audited and I have to justify my reasons. I am minimizing the hassle of an audit

This replacement is purely maintenance because the shingles lasted only 14 years, not the warrantied 25 years. I have pictures and documents to prove this is the case. Based on your explanation, I believe I have a strong case that this is pure repairs and maintenance. Still, who wants to speak with those friendly auditors?

Just curious, what will be the downside of not deducting the roof cost when I eventually sell the house?
That's common, shingles never last as long as advertised.

It's not going to be a full blown audit, cra may simply request copies of the repairs and maintenance invoices and description of what it was, is it an upgrade or not, it really is not as big of a deal as people make it out to be.
It will have no effect on selling a house, no buyer cares about how you handled your taxes.
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Jr. Member
Aug 5, 2018
137 posts
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senasena wrote: That's common, shingles never last as long as advertised.

It's not going to be a full blown audit, cra may simply request copies of the repairs and maintenance invoices and description of what it was, is it an upgrade or not, it really is not as big of a deal as people make it out to be.
It will have no effect on selling a house, no buyer cares about how you handled your taxes.
But a buyer does weigh major costs like a roof replacement when making the big decision. If this is true is there economic benefit (improvement)? Wiring behind the walls is something that buyer would not notice until they broke the surface.
Sr. Member
Feb 19, 2019
847 posts
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Stouffville ON
Staffah wrote: But a buyer does weigh major costs like a roof replacement when making the big decision.
I didn't say that new roof has no impact.
I said that when the seller replaced the roof, what they have done with it for tax purposes has no interest to the buyer, they just don't care what the sellers tax return looks like. ;-)
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