If you earn rental income from a property in Calgary or anywhere in Canada — whether it's a basement suite, a condo, an investment property, or a short-term rental through a platform like Airbnb — that income must be reported on your T1 personal return. There is no threshold below which rental income is exempt, and CRA has become increasingly sophisticated at identifying unreported rental income through land registry records, utility connections, and rental platform reporting requirements. Accurate record-keeping is essential; our bookkeeping services for Calgary landlords can keep your rental records CRA-ready year-round.
Rental income is reported on Form T776 (Statement of Real Estate Rentals), which is filed as part of your T1 return. The T776 captures all rental revenue and eligible expenses to arrive at net rental income (or loss).
Report all amounts received from tenants, including:
Security deposits held in trust are not income when received — only if they are eventually applied to rent or kept for damages does income arise.
The following expenses are deductible against rental income in the year incurred (current expenses):
| Expense Category | Notes |
|---|---|
| Mortgage interest | Interest portion only — not principal repayment |
| Property taxes | Municipal taxes applicable to the rental property |
| Insurance premiums | Insurance on the rental property |
| Repairs and maintenance | Current expenses to maintain the property; not capital improvements |
| Property management fees | Fees paid to a property manager |
| Advertising | Costs to find tenants |
| Utilities (if paid by landlord) | Heat, electricity, water when included in rent |
| Accounting and legal fees | Tax preparation and lease-related legal costs |
| Office expenses | Reasonable home office costs for managing the rental |
| Travel | Reasonable travel to the rental property for management |
One of the most common mistakes Calgary landlords make is treating capital expenditures as current expenses. The distinction matters:
Short-term rental income (properties rented for less than 90 days per stay through platforms like Airbnb, VRBO, or similar) is taxable income. For short-term rentals where you also provide services to guests (cleaning, linens, concierge), CRA may characterize the income as business income rather than rental income — which means it's subject to GST/HST and CPP obligations if earnings are significant.
Additionally, municipalities including Calgary have introduced short-term rental regulations requiring licensing, and some short-term rental income may not be eligible for the same expense deductions as traditional rentals. Consult a tax professional before your first tax season as a short-term rental operator.
When you sell a rental property, you'll have a taxable capital gain (or allowable capital loss) based on the difference between your proceeds of disposition and your adjusted cost base (ACB). In 2025, 50% of capital gains are included in taxable income for individuals. If you claimed CCA in prior years, you may also face a recapture of that CCA, which is fully taxable as ordinary income — not at the lower capital gains inclusion rate.
Unlike your principal residence, investment properties do not benefit from the principal residence exemption (unless you designate them during years you personally lived there).
Rental income is a frequently audited area. CRA's matching programs identify Calgary landlords through land title data, utility connections, and rental platform data. Accurate reporting — capturing all income and all eligible deductions — is both a compliance obligation and a financial opportunity. As a Calgary accounting firm serving landlords and real estate investors, Swift Accounting prepares T776 rental statements for clients at every level. If you're also considering whether to incorporate your real estate holdings, see our guide on when to incorporate in Alberta and our corporate tax services in Calgary. Book a free consultation and bring your rental records for a thorough review.