Being a property owner in Ottawa has many benefits for a financial standpoint. This makes it important to be aware of the amount of tax owed every year. The tax for any Ottawa rental property is determined by the amounts of net income and loss reported for the given year, in this case 2014.
Reporting the net loss or income from all rental properties that you own, even if some are owned outside of Canada, is essential to filing a correct and complete return. Generally the total income from a rental property is reported annually, according to a calendar year. This equates to a fiscal reporting period as it applies to a business.
What are the allowable deductions?
As a rule, any expense that is incurred due to the overall operation of the rental property is allowable. What this includes is the same items allowed for deduction on your regular home, such as
- Property taxes
- and Mortgage Interest
The additional items allowed are
- and Loan Interest
As a rental property owner in Ottawa the interest for any loan secured for the down payment of a rental property is deductible. This applies also to any loans applied to the improvement and repair of the property. Which brings us to the next item.
Accordingly, in certain instances depreciation may come as an allowable deduction. The one aspect of rental property that needs your heightened awareness is that the expenses do not surpass the income from the property. If this occurs on a consistent basis, the property is determined a bad investment, which will negate the possibility of claiming any financial losses you may incur.