Co-Owned Rental Property in Canada: Who Reports What on T776

Do we each report our share of a co-owned rental in Canada?

Yes, with one catch: each co-owner reports the whole property's gross rent but only their own share of the net income. The CRA bases that share on ownership, and the percentage should be the same each year unless it changes (CRA: Rental Income). Owning a rental with one or more people, including a spouse or common-law partner, usually makes you co-owners (CRA: Ownership).

The case is simple when the owners are individuals, the deed matches who really owns what, the loan is in the owners' names and nobody runs the property as a joint business. It stops being simple when:

• the shares are unequal, or the deed and the money disagree;
• one owner paid for part or all of the other's share;
• a name is on title only, for example to help a relative qualify for a mortgage;
• the mortgage or the rent account is in one name;
• the rent has been split half and half for years with no basis;
• ownership changed during the year;
• an owner lives outside Canada;
• the owners run it together as a business, or a corporation or trust is involved.

Gather the deed, the mortgage statements showing who borrowed, any co-ownership or trust agreement, each owner's ownership percentage, the rent bank statements and a record of who paid each cost. If those papers cannot show the shares, settle that first.

Do we each report the whole rent or half on T776?

The whole rent and the whole expenses, not half. Only the net income is shared by ownership. Each co-owner files their own T776, starts from the same whole-property figures, then takes a share (CRA: Rental Income; CRA: Completing Form T776; CRA: Form T776):

Every owner's return starts from the same rent, expenses and net figure, and Part 2 shows the other owners' shares. For the rest of the form, see Rental income in Canada; for which line each cost belongs on, see Rental statement expense lines.

Is a rental we co-own a partnership, and do we file a T5013?

Usually not. The CRA says co-owning a rental as an investment does not make a partnership; a partnership needs people carrying on a business together to make a profit (CRA: Ownership). The partnership statutes of the common-law provinces and territories generally provide that joint tenancy, tenancy in common or part ownership does not by itself create one. Whether one exists is a mix of fact and law, and formal registration does not necessarily mean one exists. Quebec's Civil Code defines a partnership in its own terms, so a Quebec co-owner should treat the question as open (Folio S4-F16-C1).

Form T776 tells co-owners to decide whether a partnership exists before filling in Part 1, and says extra services such as cleaning, security and meals may mean a business (CRA: Form T776). For short stays and services, see short-term rental: property or business income.

If a partnership does exist, it files a T5013 only in some cases: revenues plus expenses above $2,000,000 or assets at cost above $5,000,000, it is a partner in another partnership or has one as a partner, it has a corporation or trust as a partner, it invested in flow-through shares, or the CRA asks in writing; otherwise it can give its partners its financial statements (CRA: T4068). See Partnership or corporation and General partnership first-year return.

Does joint title decide my share of the net rent?

Your share is your share of ownership (CRA: Rental Income). The CRA pages do not say how to measure the share, or that the form of title, joint tenants or tenants in common, sets it. A half-and-half split is right only when each owner's share is a half. Compare the deed and any agreement with what each owner paid and received, and settle any gap before filing.

Can we split the rent differently from our ownership, or to use a lower tax bracket?

The CRA's instructions tie the share to ownership and describe no way to choose a different split by agreement or by tax bracket (CRA: Rental Income).

Moving future rent to someone means changing ownership, which is a gift or sale of a share; see Transferring property to family. Attribution rules can also keep income with the person who gave or lent the money or property, whether the share was added later or paid for at purchase:

• Spouse or common-law partner: income or loss from property transferred or lent to them is the transferor's for the part of the year the transferor is resident in Canada and the person is their spouse or partner (Income Tax Act, section 74.1). So when one spouse pays for the other's half, equal title may not mean an equal tax split. Attribution of rental income stops for a period when they live separate and apart because of a breakdown of the relationship (section 74.5).
• Under-18 relative: the same for property transferred or lent to a person under 18 who does not deal at arm's length with the transferor, or who is a niece or nephew, for any year the person is still under 18 at year-end (section 74.1).
• Loan from a relative: a loan or debt from a non-arm's-length person can move income to the lender when reducing tax was one of the main reasons (section 56).

Exceptions exist, each with strict conditions (section 74.5; section 56). A transfer for fair market value works only if what was paid was worth at least the property and any debt for it charges at least the lower of the prescribed rate and the arm's-length rate. For a transfer to a spouse or common-law partner, the transferor must also elect, in the return for the year of transfer, out of the automatic rollover. A loan works if it charges at least that same lower rate. Interest must be paid within 30 days after each year-end, and a missed payment can lose the exception. See Transferring property to family before relying on one.

Whose name is on the mortgage: who deducts the interest?

The CRA ties the interest deduction to the owner whose loan it is. It says the owner is the only one who can use the related interest expense, even if someone else guaranteed the loan. Interest on money borrowed to buy or improve the rental is generally deductible; mortgage principal is not (CRA: Rental Income).

The CRA pages do not say what happens when two owners own the property but only one is on the loan, or how a loan in both names is shared. Nor do they say how interest on a loan held by one of several owners fits a statement that every owner builds from whole-property figures. Line 9945 covers deductible expenses a co-owner has that were not deducted elsewhere on the form, but the pages do not say whether one owner's loan interest belongs there or among the shared expenses. Do not assume either placement; have it checked before either owner files, because the same interest cannot be deducted twice. For the interest rules, see Interest on money borrowed for investments and rentals.

What if my name is on title only?

The person who owns the rental reports the income, so a name on title only may not move the tax (CRA: Rental Income). A person holding legal title as agent for another can be a bare trustee, and the CRA says income, capital gains and capital losses from bare trust property are reported on the beneficial owner's return. Whether a bare trust exists is a question of fact and law under private law, for the people involved to determine (CRA: Bare trust reporting questions).

A reportable bare trust may need a T3 return with Schedule 15 for taxation years ending on or after December 31, 2026, due within 90 days after the year-end (Income Tax Act, section 150); the CRA does not generally require bare trusts to file for earlier years. The law excludes some arrangements: where every legal owner is a beneficiary and every beneficiary is a legal owner, as with spouses who both own and hold title; related individuals holding real property that would be a legal owner's principal residence if designated for the year; and an individual holding such a home for a spouse or common-law partner's use. A rental let to tenants all year, with no owner, spouse or child living in it at any time in the year, is unlikely to meet that test; one the family lived in for part of the year may (CRA: Bare trust reporting questions; CRA: Rental Income). A parent on title only, for a child's rental, needs the bare trust question answered. See Transferring property to family.

What happens to the percentage if ownership changes during the year?

The reported percentage should be the same each year unless ownership changes (CRA: Rental Income). The CRA pages do not explain how to divide a year in which it changes part-way, so have the dates and method reviewed before filing; both returns must show the same dates and percentages.

A change in percentage usually means someone gave away or sold part of the property. That is a separate event that may have its own tax or recapture of capital cost allowance, depending on who the other owner is and how the transfer is done. See Transferring property to family and Selling a rental property.

How do CCA, recapture and personal use work with co-owners?

Each co-owner enters only their own share of capital cost allowance (CCA), recapture and terminal loss, worked out on their own share of the cost. The personal portion of expenses is different: it is the figure for all co-owners (CRA: Form T776; CRA: Completing Form T776).

CCA is each taxpayer's own claim: the Regulations allow "such amount as the taxpayer may claim" up to the class limit (Income Tax Regulations, section 1100), so in an ordinary co-ownership the owners' claims and remaining balances can differ. Do not divide another owner's claim or later recapture by the percentage. A partnership works out CCA on its own property before sharing income. See Capital cost allowance and Should you claim CCA on a rental. Because the personal portion covers all co-owners, one owner's personal use, such as a relative living in a unit, must show the same on each return; see Renting a basement suite.

What should co-owners keep so each return matches?

Detailed records of rent and expenses, generally for six years from the end of the tax year, not sent with the return (CRA: Rental Income). Keep one record for the whole property, not one per owner; each return starts from the same totals. For co-owners:

The CRA pages do not say how unevenly paid expenses are treated between owners. Do not infer a rule from who paid; have it reviewed before filing. For a rental loss, see Rental losses and CRA review.

Example

These examples are illustrative. Figures are in Canadian dollars, and CCA is left out.

Spouses own a condo equally

Rent is C$24,000 and expenses are C$16,000, so net rent is C$8,000. Each spouse enters C$24,000 of rent and C$16,000 of expenses on their own T776. Line 9369 is C$8,000 on both, and each reports half, C$4,000. This assumes each spouse paid for their own half. If one spouse funded the other's half, the income from that half may be attributed back to the spouse who paid (section 74.1).

A parent and an adult child own a duplex unequally

The parent owns 70 percent and the child 30 percent. Net rent before CCA is C$10,000, so the parent reports C$7,000 and the child C$3,000. Both start from the same whole-property rent and expenses. The shares follow ownership; the CRA pages do not tie them to who makes the mortgage payments. This assumes each owner paid for their own share; if the parent lent the child the money, the loan rule above may apply. Where the parent's loan interest goes needs checking before either files.

A child is on title only

A parent puts an adult child on title to help with a mortgage, but the child has no real share. Net rent is C$8,000. If the parent is the only person with a real share, the parent would report the C$8,000, and the child's name on title may not move it. Whether the child holds a share is a question of fact. If the arrangement is a reportable bare trust, a T3 return and Schedule 15 may be due for the 2026 tax year.

Different for you?

• Shares are unequal, one owner paid for another's share, a name is on title only, the mortgage or rent account is in one name, or you have split the rent half and half for years without a basis: each owner's real share, how the years already filed should read, and whether a partnership, trust or attribution issue is involved are judgment calls. Get individual tax help with the deed, loan papers and bank records in hand.
• Ownership changed during the year, one owner paid more of the costs, or one owner's loan interest needs a place on the statement: the CRA pages set no rule for these, so how each owner's return should read is a judgment call. Get individual tax help with the deed, loan papers and payment records in hand.
• You filed past years on a different split: after the notice of assessment, the CRA lets you request a change to an assessed return to correct amounts, and a refund cannot be issued for a request made more than 10 calendar years after the end of the tax year (CRA: Changing a tax return). Both owners' returns may be affected, so see individual tax help. For income left off a return, see unreported income and voluntary disclosure.
• You added family to title, gifted a share or plan to: see Transferring property to family.
• The owners run it as a business, or a corporation holds the property: a corporation that owns the property is the one that reports the rent. See Partnership or corporation and Rental property in a corporation.
• Rent and costs pass through one person's account with little record of who paid: see Rental statement expense lines and bookkeeping help.
• You sold or will sell a share or the property: see Selling a rental property.
• An owner lives outside Canada, or you file a Quebec return: rent paid to a non-resident owner generally carries 25% withholding on gross rent, and a payer who must withhold and does not is liable for it (sections 215(1) and 215(6)). See Non-resident landlords and Rental income in Canada, which covers the Quebec form.