Rental income in Quebec is taxable — but so are a wide range of expenses. Proper tracking and reporting significantly reduces tax on rental income.
What Must Be Reported
All rental income on Schedule T776 (federal) and TP-128-V (Quebec): monthly rent, parking fees, laundry income, late fees, and advance rent.
Deductible Rental Expenses
- Mortgage interest (not principal)
- Property taxes
- Insurance premiums
- Maintenance and repairs (not capital improvements)
- Property management fees
- Accounting and legal fees related to rental
- Advertising for tenants
- Heat and electricity if included in rent
- Condo fees and snow removal
Capital Cost Allowance
Depreciate the building (not land) as a Class 1 asset at 4% per year. CCA cannot create a rental loss — it can only reduce rental income to zero. Consider future capital gains impact before claiming.
Short-Term Rental (Airbnb)
Short-term rental income is fully taxable and subject to GST/QST once revenue exceeds $30,000. Quebec has additional licensing requirements for short-term rentals since 2023.