Budding trees, tulips and daffodils, cherry blossoms, green grass, mild weather.....
... and tax season.
Matt and I recently filed our 2011 Federal Income Taxes, and boy what a joy that wasn't! We ended up owing money, mainly because of the rental condo.
The rent we're receiving on the condo *just* covers the monthly expenses we incur. We're not really operating at a profit per se. But in the eyes of the CRA, we are. On a rental property, you can claim the interest portion of the mortgage as an expense, but you can't claim the principle. It makes sense. But it means that while the extra money in our pockets is zilch/zip/zero, the CRA thinks we've got lots of extra cash. Cash that we have to pay tax on.
There are a few other expenses that we're able to claim:
- Property Tax
- Condo fees/maintenance fees
- Hot water tank rental
- Mileage for visits to the condo (not for visits that are for collecting rent though)
- Administrative supplies (i.e. we had to buy printer ink for all the rental documents to be printed)
- Insurance on the condo
But I'd like to hear from owners of single condo units, as I want to get a sense of what else is reasonable for a small-scale landlord. All the contracting expenses we paid this past February will help offset some of the income for 2012.
But in the meantime, CRA, your cheque for 2011 is in the mail.