Can I claim the full mortgage payment on my T776?

No. You can only claim the interest portion of your mortgage. The principal repayment is not deductible. NorthOS helps you separate these automatically.

What is the difference between a repair and a capital improvement CRA?

Repairs (Line 8960) restore a property to its original state (like fixing a leak). Capital improvements provide a lasting benefit or improve the property beyond its original state (like a new roof). Improvements must be depreciated via CCA.

How do I claim property taxes in Ontario as a landlord?

Property taxes on your rental are fully deductible on Line 9180 of your T776. The Ontario Energy and Property Tax Credit (OEPTC) is a separate personal credit, based on the property tax or rent for the home you live in, not your rental properties. If you rent out part of your own home, only the personal-use portion counts toward the OEPTC, while the rental portion stays on your T776.

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Simple T776 Guide for Ontario Landlords

You have 3 units, not 300. You need a tax ledger, not a complex tenant portal. This guide explains how to manage your Ontario rental property taxes without the spreadsheet headache.

Quick Answer

Rental income and expenses are reported on Form T776. Key deductions include mortgage interest (not principal), property taxes, utilities, and repairs. Distinguishing between a current repair and a capital improvement is critical for CRA compliance.

Repairs vs. Capital Improvements

One of the most common CRA audit triggers is misclassifying a capital improvement as a current repair.

Current Expense (Repair)

Painting, fixing a broken window, or repairing a leaky faucet. These restore the property to its original state and are 100% deductible this year.

Capital Expense (Improvement)

A new roof, replacing a furnace, or adding a deck. These provide a lasting benefit and must be depreciated over years via CCA.

The Mortgage Interest Trap

In Ontario, you can only deduct the interest portion of your mortgage. The principal repayment increases your equity and is not an expense. NorthOS allows you to split your bank payments automatically so your T776 is always accurate.

Audit-Proof Your Rentals

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Ontario Energy and Property Tax Credit (OEPTC)

The OEPTC is a personal, income-tested credit (part of the Ontario Trillium Benefit) based on the property tax or rent you pay for the home you live in. Property taxes on a separate rental property do not qualify. If you rent out part of your own home (for example, a basement apartment), you split the property tax: the personal-use portion can count toward your OEPTC on Form ON-BEN, while the rental-use portion is deducted on Line 9180 of your T776. You cannot claim the same dollars in both places.

This article is for informational purposes only and does not constitute tax advice. Tax rules can change — always verify with the CRA or a qualified tax professional.