Who this is for
- Canadian residents with a rental property who are comparing or questioning a preparer's fee
- Landlords whose quote rose, or who are changing preparers
Not covered here
- A fair dollar price for any return: no government source publishes one
- Finding a CPA or preparer and how personal returns are priced in general
- How rent is taxed, which line each cost goes on, and rentals held in a corporation
What does a rental property add to a Canadian personal return?
No government source sets a fair price for a rental property return, so a quote can only be judged against the work behind it. A rental adds Form T776, Statement of Real Estate Rentals, and a capital cost allowance (CCA) calculation to the personal return. CCA is the tax deduction for the cost of a building or equipment, spread over the years. The form carries the rent, the expenses, any personal-use share and the co-owners, and its results go to lines 12599 and 12600 of the return (CRA: Form T776).
| Part of the form | What it holds | What it asks of the preparer |
|---|---|---|
| Part 3 | The address and units of each property; gross rent, with short-term rent shown separately | A rent record for each property |
| Part 4 | The expense lines, each with a personal portion and a short-term rental portion | Every cost sorted to a line, then split for personal use |
| Areas A to F | CCA by class, building and equipment additions and dispositions, land | Opening balances, cost records and, in a sale, proceeds |
Part 3 lists each property, and the CRA's guide says to combine the rental income and loss from all properties when working out how much CCA you can claim (CRA: Rental Income). The CRA's pages do not say when several properties go on one T776 and when each needs its own, so ask how many statements your return will carry. A Quebec return filed by a sole owner or co-owner who earns rent includes Revenu Québec's Form TP-128-V or a rental income and expense statement, one for each property (Revenu Québec: Line 136).
A rental return stops being simple, and a quote tends to rise, when it has any of these:
- a second property;
- a co-owner, including a spouse;
- a room, suite or short-term stay in a home you also live in;
- a sale in the year, or a home that became a rental (or a rental that became your home);
- CCA claimed in earlier years, or about to start;
- a Quebec address;
- rent or expense records that are incomplete;
- a missed earlier year, or a CRA letter about the rental.
A case with several of these is where a scoped quote from a professional is worth asking for. Gather first: last year's return with its T776 and CCA pages, leases and rent records. The full list is under "What can I prepare myself so there is less to do?".
Is my accountant's price for a rental property return reasonable, and what makes it higher?
A rental property return costs more when it carries any of these rental-specific drivers. No government source publishes a fair price, so a quote can be checked only against the work behind it.
| Driver | The rule behind it | What the preparer has to do |
|---|---|---|
| More properties | A rental building with a capital cost of $50,000 or more gets its own CCA class and is calculated separately; buildings below that cost in the same class are combined. Only the building counts, since land is not depreciable (CRA: Rental Income) | A rent record and a cost record for each property, and a separate CCA row for each building at or above that cost |
| A co-owner | Each co-owner reports the gross rent of the entire property, not their share, and their own share of net income (CRA: Completing Form T776) | One set of property figures that agrees across the owners' returns; see co-owned rental property reporting |
| CCA | CCA is a yearly claim: you do not have to claim the maximum, and CCA cannot create or increase a rental loss (CRA: Rental Income) | Opening balances, additions, and a record of what was claimed |
| A sale | The disposition is listed on Schedule 3, and CCA claimed earlier may be added back to income (a recapture) or the balance left in an emptied class deducted (a terminal loss) (CRA: Rental Income) | Cost and proceeds divided between land and building, then recapture or terminal loss worked out; see selling a rental property |
| A change between personal and rental use | Moving out and renting your home, or moving into a rental, is normally a deemed sale at fair market value; a section 45(2) or 45(3) election can defer it (Income Tax Act, s. 45) | The change date, the property's value then and earlier CCA records; see turning a home into a rental |
| Personal use | Expenses of the whole property must be divided between your personal part and the rented area (CRA: Rental Income) | A split on a reasonable basis, with the measurements behind it |
| Short-term rental | For tax years after 2023, the CRA does not allow the deduction of the non-compliant amount of a short-term rental's expenses (CRA: short-term rental deductions), and Charts A and B of the T776 apply the same idea to CCA | Day counts and licence or registration records by unit |
| Quebec | A sole owner or co-owner earning rent includes Form TP-128-V or a rental income and expense statement for each property (Revenu Québec: Line 136) | A provincial form or statement for each property |
| Missing records | The CRA expects detailed records of the rent earned and the expenses incurred (CRA: Rental Income) | Time spent rebuilding rent, expenses and cost before the return starts |
A short-term rental here is a residential property rented or offered for rent for under 90 consecutive days. It is non-compliant when the province or municipality does not permit it at that location, or its registration, licence or permit rules are not met. For 2024 only, a rental that is compliant by December 31, 2024 is treated as compliant for the whole year (CRA: short-term rental deductions). A missed return for any tax year after 2023 carries the rule.
For the line each cost goes on, see rental statement expense lines. For how a personal return is priced in general, and how to find and check a preparer, see choosing an accountant in Canada.
Why did my rental property return quote jump, and should I stay with the same accountant?
A quote can jump when your file gained one of the drivers above, or when a new preparer has to start from your documents instead of last year's working papers. Check which of these changed.
| What changed | What it adds |
|---|---|
| A refinance | Interest on money borrowed to buy or improve the rental is deductible. Interest on funds used for another business or investment may be claimed elsewhere on the return, and interest on funds used for personal spending cannot be deducted (CRA: Rental Income). The preparer traces what the new loan paid for; see interest deductibility for investing and rentals |
| A new preparer | The CCA calculation starts from last year's undepreciated balance, the part of the cost not yet claimed as CCA (Form T776). A preparer without last year's T776 may need to rebuild it from purchase and improvement records |
| A fuller quote | Items the old quote left out, such as those listed under "What should a rental property return quote spell out?", are now named |
A new property, a first CCA claim, a sale, a suite or short-term stays, or a co-owner added to title each bring in a driver from the previous section. If the work grew, a higher fee is explained. If none of those drivers changed in your file and the preparer cannot itemise the quote, ask a second preparer for the same itemised scope so the two numbers compare. For moving to another preparer, see switching accountants; it is written for businesses, and its records and CRA-access steps are similar.
What should a rental property return quote spell out?
A quote you can compare names the years, the properties and the forms it covers, and says what is billed separately. Ask about each item.
| Ask whether the quote covers | Why it changes the work |
|---|---|
| Which tax years | Late or missed years are separate returns, each with its own records |
| How many properties and co-owners, and how many T776 statements | Rows in Part 3, details for each owner, and each owner's return |
| The CCA calculation, and where its opening balances come from | The calculation starts from last year's undepreciated balances |
| A sale, a short-term rental or a Quebec rental form | Land and building dispositions, non-compliant day counts, a second form |
| Whether the fee is fixed per return, per form or by the hour, and whether sorting or rebuilding records is included | Missing records add time that is hard to estimate in advance |
| Whether answering a CRA letter is included or billed separately | A reply to the CRA is a separate task from preparing the return |
| E-filing and your sign-off | Form T183 is the form you sign to authorize the preparer to send the return electronically |
| How the invoice shows the rental part | None of the CRA's fee pages sets a split between the rental part and the rest of the return |
Can I deduct my accountant's fee on a rental property return, and where?
Reasonable fees to prepare your return may be deductible when you have rental income. The CRA describes the deduction on two of its pages, and a fee is claimed once.
- On Form T776, line 8860. The CRA's guidance for this line says you may be able to deduct fees and expenses for advice and help to prepare your income tax and any related information returns (CRA: Rental expenses you can deduct). For what else goes on this line, see rental statement expense lines.
- On line 22100 of the return. The CRA lists reasonable fees, not already deducted, to have someone prepare or assist you in filing your return, if you have income from a business or property (CRA: Line 22100). That page links the CRA's archived bulletin IT-99R5, which says reasonable fees for advice and help preparing and filing returns are normally deductible. The CRA does not update it.
None of these pages says how to divide one invoice between the rental part of a return and the rest of it. The line 22100 wording covers only fees not already deducted, so a fee is claimed on one line. An invoice that shows the rental part gives the preparer something to work from.
Legal and accounting fees to buy a rental property are not deducted as expenses. The CRA allocates them between the cost of the land and the capital cost of the building (CRA: Rental Income).
What can I prepare myself so there is less to do?
Sort records by what Form T776 asks for, so the preparer is not sorting a year of bank activity. The CRA tells landlords to keep detailed records of the rent earned and expenses incurred, and not to send them with the return (CRA: Rental Income).
| Gather | What it feeds |
|---|---|
| Last year's return, with its T776 and CCA pages | Opening balances in Area A |
| Leases, and a rent record for each property (date, amount, unit, and the account each payment landed in) | Part 3 |
| A property manager's year-end owner statement, if you use one | Rent and the management fee in Parts 3 and 4 |
| For short stays: days each unit was rented or offered for rent, platform statements, licence or registration | Part 3, and Charts A and B |
| Expenses grouped by T776 line (see rental statement expense lines) | Part 4 |
| The lender's yearly statement showing interest and principal separately | Interest is deductible on money borrowed to buy or improve the rental; principal repayments are not (CRA: Rental Income) |
| Property tax bills, insurance bills and condo statements | Part 4 |
| Invoices for equipment and building improvements | Areas B and C |
| Closing statements for any purchase or sale | Land and building cost in Areas C and F, and proceeds in Areas E and F |
Generally, keep annual records for six years from the end of the last tax year they relate to (CRA: Rental Income). For a late return, the period runs from the day you file it. Records of buying, improving and selling the property are long-term records the CRA says to keep indefinitely (CRA: How long to keep your records).
How do I check who prepares and files my return?
Search the CRA's EFILE directory for the preparer, then read the return before you sign. The CRA says the directory lists preparers certified to file your return through its EFILE service. Its steps are to review your prepared return and Form T183, then sign Part F of T183. The information on T183 must be the same as in the electronic return (CRA: Get help from a tax preparer). For CPA registers and questions to ask, see choosing an accountant in Canada. For Quebec returns, see do you need a tax accountant.
When is a rental property return simple enough to do yourself?
A rental return has the fewest cost drivers when every item below is true.
- You own one property alone and rent the whole of it to long-term tenants.
- No part of it is your own home or personal-use space.
- Nothing was sold or changed between personal and rental use, no building improvement was made and no refinance funded personal spending this year.
- You claim no CCA, or you have the balances from last year's T776.
- Rent and expense records are complete and sorted.
- No CRA letter is open and no earlier year is missing.
If every item is true, most of the cost drivers in this guide are absent. Whether to prepare it yourself is covered in do you need a tax accountant. For how rent itself is taxed, see rental income.
Example
These examples are illustrative; amounts are in Canadian dollars and tax is not calculated.
A second condo
A landlord who owns one condo alone buys another, also alone. Each condo rents for C$20,000 a year, and each building cost is well above C$50,000. Part 3 of the T776 now lists two addresses, with C$40,000 of gross rent in total. The preparer sorts two sets of leases, condo statements and tax bills into Part 4. If CCA is claimed, each building has its own row in Area A. The form is laid out as before, but the records behind it have doubled.
Two quotes for the same condo
One quote is a flat fee per return. The other is lower but covers only the T776, not the CCA calculation, and bills a reply to a CRA letter by the hour. The two numbers do not compare until both say how many T776 statements and years they cover and what they bill separately.
A condo sold in the year
A condo bought for C$400,000 is sold for C$520,000. The return adds the sale to the usual rental statement: cost and proceeds are each divided between land and building, and CCA claimed earlier on the building can be added back to income as a recapture. The C$120,000 difference is not the only figure the preparer needs; see selling a rental property.
Different for you?
- Your quote has doubled, you cannot tell what it covers, or the rental part of your return needs rebuilding (a sale, a second property, co-owners, a suite or short-term rental, missing years): get individual tax help to settle what your file really involves before you compare fees.
- Your rent and expense records are missing, or personal and rental money are mixed: see rebuilding books from bank statements and get bookkeeping help.
- Past years of returns are missing: see catching up on unfiled returns and get individual tax help.
- The CRA has written about your rental, or about a loss: see rental losses and CRA review and CRA reviews and audits, and get individual tax help.
- You live outside Canada, the rental is outside Canada, or it is a US rental: see non-resident landlords, property outside Canada and Canadians with US rental property, and get cross-border tax help.
- You sold or plan to sell the rental: see selling a rental property.
- The rental was your home, or you moved into it: see turning a home into a rental.
- You co-own the rental, or the owners may be a partnership: see co-owned rental property reporting.
- You rent a suite or room, or offer short stays: see short-term rental income: rental or business.
- A corporation holds the rental: its records and fees follow the corporate return, not this page; see rental property in a corporation and what a corporate return costs.
- Your accountant stopped answering: see switching accountants; it is written for businesses, and its records and CRA-access steps are similar.
Figures on this page
| Figure | Value | Source |
|---|---|---|
| Rental building separate-class threshold Building capital cost for rental property acquired after 1971 | $50,000 | CRA: Rental Income Checked |
| Rental income and expense records retention period Generally from the end of the last tax year the records relate to (from the filing date for a late return); invoices and receipts are kept, not sent with the return; long-term property records are kept indefinitely | Six years | CRA: Rental Income (Guide T4036) Checked |
Primary sources
- CRA: Rental Income (Guide T4036)
- CRA: Form T776, Statement of Real Estate Rentals
- CRA: Completing Form T776
- CRA: Rental expenses you can deduct
- CRA: Line 22100, Carrying charges, interest expenses and other expenses
- CRA: Interpretation Bulletin IT-99R5, Legal and Accounting Fees (archived)
- CRA: Get help from a tax preparer
- CRA: Changes to short-term rental deductions
- CRA: How long to keep your records
- Income Tax Act, section 45 (change in use)
- Revenu Québec: Form TP-128-V
- Revenu Québec: Line 136, Rental income
About this guide
Published by Cloud Accounting under standing professional approval. This version has no separately recorded personal review. It explains general rules for the tax year shown. It is not advice for your situation.
Changes
- : First published.