Personal Finance

tax - rental loss - CLAIMING against zero rental income

  • Last Updated:
  • Apr 26th, 2021 9:56 pm
[OP]
Newbie
Apr 16, 2021
16 posts
6 upvotes

tax - rental loss - CLAIMING against zero rental income

Hi everyone,

My GTA condo rental unit was empty last year. Am I allowed to claim rental loss with zero rental income ?

Thanks
10 replies
Deal Addict
Mar 3, 2018
2166 posts
2177 upvotes
GTA
AreWeThereyet wrote:
My GTA condo rental unit was empty last year. Am I allowed to claim rental loss with zero rental income ?
Only if you were trying to rent it out like advertising for tenants or using a management company. Otherwise the costs get added to your cost base of the condo to be used when determining capital gains tax.
Deal Guru
User avatar
Jan 9, 2011
11452 posts
14201 upvotes
Vancouver
DaveTheDude wrote: Only if you were trying to rent it out like advertising for tenants or using a management company. Otherwise the costs get added to your cost base of the condo to be used when determining capital gains tax.
Even then it's YMMV. If the property is left vacant for a longer period of time because you aren’t able to locate any tenants, not as a result of renovation, this can pose a problem with the CRA. I have gone through an audit whereby it took an investor three months to find a tenant. We produced all the reports, including Kijiji ads receipts, FB ad receipts, but the CRA auditor took an aggressive stand to disallow the three months of expenses. Yep, not fair, but if we object, the cost of fighting is higher than the tax bill. https://realestatetaxtips.ca/how-to-ded ... right-way/
Deal Addict
Mar 3, 2018
2166 posts
2177 upvotes
GTA
Kiraly wrote: Even then it's YMMV. If the property is left vacant for a longer period of time because you aren’t able to locate any tenants, not as a result of renovation, this can pose a problem with the CRA. I have gone through an audit whereby it took an investor three months to find a tenant. We produced all the reports, including Kijiji ads receipts, FB ad receipts, but the CRA auditor took an aggressive stand to disallow the three months of expenses. Yep, not fair, but if we object, the cost of fighting is higher than the tax bill. https://realestatetaxtips.ca/how-to-ded ... right-way/
Might be more to that story as there is no cost to object. You just fill out a T400A form and submit it that anyone can do themselves.
Member
May 10, 2020
386 posts
362 upvotes
AreWeThereyet wrote: Hi everyone,

My GTA condo rental unit was empty last year. Am I allowed to claim rental loss with zero rental income ?

Thanks
In theory you are but as others have pointed out, it may not be straightforward. However, there is no reason not to claim it. You should absolutely claim it because its the right thing to do. If you make a pattern out of it year over year, then of course you will certainly get audited and then its a headache. Very few people are able to keep all reciepts unless its a specific line item or 2.

Also, an audit is not an automatic judgement of guilt but a conversation. Firstly, a small % of people actually get audited and secondly, all it means is the system identified a trigger and you can prove your case. If you get a jerk as an auditor, thats too bad of course, but most people are resonable imo, unless you are grossly exaggerating expenses etc.
Deal Addict
Apr 13, 2017
2310 posts
1095 upvotes
GTA
I waited about 2 months for a tenant in 2020. I’m claiming full amounts of interest, property tax, commission (for rental), insurance, maintenance expenses. Just wondering can I still add utilities for those 2 months ?
Deal Fanatic
Jan 19, 2017
5081 posts
2879 upvotes
headleygrange wrote: I waited about 2 months for a tenant in 2020. I’m claiming full amounts of interest, property tax, commission (for rental), insurance, maintenance expenses. Just wondering can I still add utilities for those 2 months ?
I always claim them if it is in grey area. The worst can happen is CRA denies you and it charges you for interest. But If you don’t claim them and you are actually allowed, then you are missing out.
[OP]
Newbie
Apr 16, 2021
16 posts
6 upvotes
Hi headleygrange, utilities count as rental expenses

https://www.canada.ca/en/revenue-agency ... educt.html
''The following is a list of expenses that are deductible:
Utilities''
headleygrange wrote: I waited about 2 months for a tenant in 2020. I’m claiming full amounts of interest, property tax, commission (for rental), insurance, maintenance expenses. Just wondering can I still add utilities for those 2 months ?
Deal Addict
Jun 18, 2018
1342 posts
837 upvotes
Toronto
Yes claim it. Plus I think because of COVID it's more understandable it may be harder to fight a tenant etc

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