Rental properties are a steady income source in Burnaby, especially with the city’s growing demand for housing. But earning rental income also means handling tax obligations under the Canada Revenue Agency (CRA). Many Burnaby landlords are learning that rental income taxes are not as simple as adding revenue to an income tax return. There are rules, deductions, forms, and reporting requirements that can affect how much tax must be paid. A small error can lead to penalties or an audit.

This is why more landlords in Burnaby are turning to professional tax accountants instead of filing rental income taxes on their own. The goal is simple: remain compliant and reduce unnecessary tax payments.

Understanding Rental Income Tax in Canada

Rental income is taxable in Canada. Whether you rent out a full house, condo, apartment unit, basement suite, secondary suite, or even a short-term rental such as Airbnb, the CRA requires you to report all income. If you earn rental income in Burnaby, it must be included on your income tax return.

However, landlords are not taxed on the total rental revenue. Taxes apply on net rental income ─ rental income minus eligible rental expenses.

Examples of expenses that can reduce tax owed include:

  • Mortgage interest (not principal)
  • Property taxes
  • Utilities (if paid by you)
  • Insurance premiums
  • Repairs and maintenance
  • Advertising
  • Property management fees
  • Legal fees for tenant matters
  • Depreciation (Capital Cost Allowance)

The challenge for most landlords is knowing what counts as an eligible expense and what the CRA may reject.

Why Landlords in Burnaby Are Hiring Professional Tax Accountants

Landlords are aware that rental income and taxes are becoming more complex every year, especially with continuous CRA updates. Below are the main reasons why professional help has become common among rental property owners in Burnaby.

1. Avoiding Costly CRA Mistakes

Many landlords are unsure how rental income should be reported. Common mistakes include:

  • Deducting capital improvements as repairs
  • Forgetting to claim depreciation or claiming it incorrectly
  • Not allocating shared expenses for basement suites properly
  • Improper use of home office deductions
  • Not reporting short-term rental income from Airbnb or VRBO
  • Not filing rental income for vacant months with expenses

These mistakes can trigger reassessment or an audit. A tax accountant ensures everything is filed correctly based on CRA rules.

2. Maximizing Deductions Legally

Landlords in Burnaby often miss out on deductions because they are unaware of all eligible write-offs. Even small deductions add up over a full year.

Examples where a tax accountant can reduce taxable income:

  • Converting a portion of personal home expenses when renting a legal basement suite
  • Tracking prorated repairs that apply to both personal and tenant areas
  • Classifying appliances and renovations correctly as capital assets
  • Claiming mileage for landlord duties
  • Deducting condo fees related to the rental portion

The difference can be thousands of dollars in tax savings every year.

3. Short-Term Rental Rules in Burnaby (Airbnb / VRBO)

Many Burnaby landlords renting units short-term are unsure whether rental income is taxed as:

  • Rental income, or
  • Self-employment income

A tax accountant determines the correct classification. This matters because deductions, GST/PST requirements, and tax rates can change depending on the classification. CRA monitors short-term rental platforms, so accurate reporting is important for compliance.

4. Basement Suites and Secondary Units

Burnaby has a high number of legal and illegal basement suites. Taxes vary depending on whether the property is:

  • Fully rented
  • Partially rented
  • Owner-occupied with tenant space

A tax accountant determines the correct percentage allocation for utilities, mortgage interest, insurance, property tax, repairs, and other shared expenses. Without proper allocation, CRA can reject deductions or charge penalties.

5. Corporate vs Personal Ownership

Some landlords buy properties under a corporation to reduce tax costs. Others own them personally and pay rental income tax at individual tax rates. With rising property values in Burnaby, the question of whether to incorporate for rental property has become common.

A tax accountant can assess:

  • Current income
  • Long-term growth plan
  • Rental portfolio size
  • Retirement plans

The decision impacts tax rates, legal liability, capital gains, and estate planning.

6. Capital Gains and Sale of Rental Property

Many Burnaby property owners plan to sell in the future to take advantage of property appreciation. The timing and tax treatment of the sale are important.

A tax accountant supports:

  • Calculating capital gains
  • Claiming adjusted cost base with renovations
  • Tracking purchase closing costs and selling expenses
  • Determining whether the principal residence exemption can apply to part of the property (for basement suite owners)

Incorrect reporting can cost thousands of dollars at the time of sale.

Why DIY Filing Tools Are Not Enough for Rental Income

Many landlords try filing rental income taxes using online calculators and basic tax software. These tools do not apply CRA rules for:

  • Pro-rated deductions
  • Capital vs repair classification
  • Multiyear depreciation
  • Partial rental of a principal residence
  • Refinancing adjustments to mortgage interest

Because of these limitations, landlords may either:

  • Pay more tax than necessary, or
  • File incorrectly and risk reassessment

A tax accountant handles every detail while ensuring full compliance and maximum deductions.

Non-Resident Landlords

Some Burnaby rental property owners live outside Canada. In these cases, rental income tax becomes more complex because withholding rules apply. The CRA may require 25% of the gross rental income to be withheld if proper paperwork is not filed.

A tax accountant ensures:

  • NR6 filing for reduced withholding tax
  • Section 216 return for annual reporting
  • Correct payer-agent designations

This saves non-resident property owners from excess withholding or CRA disputes.

When Should a Burnaby Landlord Contact a Tax Accountant?

Landlords benefit from professional support when:

  • Renting a property for the first time
  • Renting a basement suite or secondary unit
  • Running a short-term rental (Airbnb / VRBO)
  • Owning more than one rental property
  • Unsure about eligible deductions
  • Planning to sell the property
  • Receiving a CRA letter or audit notification
  • Living outside Canada but earning rental income

In most cases, the savings from deductions and compliance outweigh the accountant’s fees.

Final Thoughts

Rental income taxes in Burnaby require careful planning and accurate reporting. Between deductions, capital cost allowance, expense classification, shared-space allocation, and CRA rules for landlords, preparing tax returns without professional help can lead to higher taxes or penalties. This is why many Burnaby property owners now prefer working with a Tax Accountant in Burnaby to manage their rental income taxes and ensure compliance while reducing tax costs.

If you want professional guidance with rental income taxes or need help filing your return correctly, GTA Accounting provides complete rental property tax support for landlords across Burnaby and British Columbia.