Rental property records: what a landlord should keep

Short answer: an individual landlord reports rental income and expenses on Form T776, Statement of Real Estate Rentals, with the personal tax return. A corporation or partnership that owns a rental property reports differently, so it should ask a tax professional. The CRA generally expects records and supporting documents to be kept for six years from the end of the last tax year they relate to. A landlord who also uses part of the property personally, or who owns it with someone else, has extra points on the form.

What records should a landlord keep?

• Leases and a record of every rent payment received, with the date and the tenant.
• Invoices and receipts for each expense claimed, such as property tax, insurance, utilities and repairs.
• Bank statements for the account the rent goes into and the expenses come out of.
• Invoices for larger work on the property, kept because they may be capital costs, not current expenses.
• Any statement from a property manager.

How long should the records be kept?

The CRA’s page says records and supporting documents generally have to be kept for six years from the end of the last tax year they relate to. It also explains when a longer period applies and how to ask for permission to destroy records early. Read it for your own case.

What does Form T776 do with personal use and co-owners?

• If part of the property is used personally, the form has a personal portion column, and only the rental share of shared costs such as property tax, electricity and insurance is claimed. The CRA’s example applies a percentage to those costs and enters nothing for advertising in the personal column.
• Capital cost allowance can be claimed on the rented part in some cases, but not if it creates or increases a rental loss. Claiming it can have consequences when the property is sold, so ask a professional before claiming it.
• A co-owner enters their share of the net rental income and completes the part of the form that gives the details of the other co-owners.

What your books need to show

• A separate bank account for rental activity, so income and expenses are not mixed with personal spending.
• Each expense recorded with its date, payee and what it was for, with the invoice attached.
• Repairs and larger improvements recorded separately, because the form treats them differently.
• The ownership share, if there is a co-owner, and each owner’s share of the income and costs.

Keeping business and personal money apart →

Records the CRA expects →

Amending a T1 or T2 →

Ask for a written quote →