T776 for Canadian Landlords: The Complete 2026 Filing Guide

If you own a rental property in Canada and earned rental income last year, the Canada Revenue Agency expects you to file a T776 — Statement of Real Estate Rentals with your personal tax return. It is not optional, and the cost of getting it wrong ranges from a CRA reassessment to losing legitimate deductions you were entitled to claim.

This guide walks through the T776 line by line, with examples drawn from real Canadian landlords managing one to ten doors. We will cover what counts as gross rental income, which expenses are deductible, how to handle co-owners, and the most common mistakes that cost landlords thousands at audit time.

Who must file a T776?

You file a T776 if you earned rental income from real estate in Canada during the tax year. That includes:

• A single-family home rented to a tenant for any portion of the year
• A condo or apartment unit you own and rent
• A basement suite or secondary suite in your principal residence
• Short-term rentals such as Airbnb (different rules apply for full-time short-term rentals — see below)
• Commercial property, parking spaces, or storage units rented out

You file one T776 per rental operation, not one per property. If you own three rental houses, all three are reported on a single T776 with separate columns for each address.

Gross rental income — what counts

Gross rental income is every dollar you received from a tenant during the calendar year, including:

• Monthly rent payments
• Pet rent or parking add-ons
• Late fees and NSF cheque fees
• Lease break payments (yes, these are taxable income)
• Forfeited security deposits

What does NOT count: last month's rent held in trust (until the tenant moves out), and refundable security deposits while they are still in trust. These are liabilities on your books, not income.

The 12 deductible expense categories on Form T776

The CRA gives you 12 numbered expense lines plus an "Other" bucket. Use the actual line names — auditors flag mis-categorized expenses faster than missing ones.

1. Advertising

Kijiji boosts, Facebook Marketplace promotions, RentFaster listings, professional photography, signage. Yes, even the $40 you spent on a Canva Pro subscription used for listing flyers is deductible — pro-rated.

2. Insurance

Landlord insurance premiums only. If you have one combined policy covering personal home + rental, you must pro-rate.

3. Interest

Mortgage interest (NOT principal). Get your annual interest statement from your lender — it's usually emailed every January.

4. Maintenance and repairs

Fixing a broken furnace = deductible. Replacing the furnace = capital expense, depreciated via CCA (see below). The CRA distinguishes ruthlessly here — see the next section.

5. Management and administration fees

Property manager fees, software subscriptions (yes, including Central Rentals), accountant fees for preparing your T776, lawyer fees for lease drafting.

6. Motor vehicle expenses

Only if you have more than one rental property AND you drive to manage them. Track kilometers in a logbook — the CRA will ask for it.

7. Office expenses

Stationery, postage, printing, courier costs. Small bucket, easy to forget.

8. Legal, accounting, and other professional fees

Eviction lawyer fees, accountant fees specifically related to the rental (not your full personal return), Landlord and Tenant Board filing fees.

9. Property taxes

Annual municipal property taxes. If you live in the building too, pro-rate by square footage of the rental portion.

10. Salaries, wages, and benefits

Only if you employ a superintendent or onsite manager. Most small landlords leave this blank.

11. Travel

Different from motor vehicle. Use this for flights/hotels if your rental is out of province. Carefully documented or it will be challenged.

12. Utilities

Heat, water, electricity, internet — but only the portion you (the landlord) actually pay. If utilities are in the tenant's name, this is zero.

Capital expenses vs. current expenses — the trap that costs landlords thousands

This is the single most audited area on Form T776. The CRA splits every expense into two buckets:

• Current expense: restores the property to its original state. Patching drywall, fixing a leaky tap, repainting one room. Fully deductible in the year incurred.
• Capital expense: improves the property beyond its original state or extends its useful life. New roof, kitchen renovation, new windows. Deductible only via Capital Cost Allowance (CCA) over many years.

Trying to claim a $14,000 kitchen reno as a "repair" is the fastest way to trigger a desk audit. When in doubt: improvements = capital, restorations = current.

Capital Cost Allowance (CCA) — the rules in plain English

CCA lets you depreciate the value of the building (NOT the land) over many years. For most residential rental buildings, the CCA class is Class 1 (4%) using the declining balance method.

Warning: claiming CCA on a property that may later become your principal residence (or vice versa) can trigger a deemed disposition with tax consequences. Talk to an accountant before claiming CCA the first time. Many small landlords intentionally do not claim CCA to preserve the principal residence exemption flexibility.

Co-ownership: filing as a co-owner vs. partner

If you own a property with a spouse or business partner, you each file your own T776 reporting only your share of income and expenses. For two equal co-owners on a $24,000-rent property, each person reports $12,000 gross.

You're a partnership (different rules) only if you have a partnership agreement and operate as a business. Most spousal landlords are co-owners, not partners.

The 7 most common T776 mistakes

1. Mixing personal and rental expenses. If you bought paint that was used for your own house and the rental, claim only the rental portion.
2. Forgetting late month rent. Rent received in January for December IS December income on accrual basis.
3. Claiming the whole mortgage payment. Only the interest is deductible. Principal payments build equity, not deductions.
4. No paper trail for cash receipts. If a tenant pays you e-Transfer, save the email. If they pay cash, write a receipt.
5. Claiming travel without a logbook. The CRA will deny vehicle deductions without one.
6. Forgetting to file when the property had a loss. You still file — and the loss can offset other income, subject to restrictions.
7. Not reporting roommate income. If you rent out a room in your home, you still owe a T776, even though some expenses are restricted.

Filing deadlines

T776 attaches to your personal T1 return. Standard deadlines:

• April 30 for most individuals
• June 15 if you or your spouse are self-employed (but any tax owed is still due April 30)

If you have a tax liability, pay by April 30 even if your return is filed June 15.

Records you must keep

The CRA requires you to keep all rental records for six years from the end of the tax year they relate to. That includes:

• Lease agreements
• Rent receipts (every payment)
• Tenant communications about repairs
• Receipts and invoices for every claimed expense
• Mortgage interest statements
• Insurance policies

Software that generates per-payment rent receipts and stores them in the cloud is no longer optional for serious landlords — it is the only practical way to survive a CRA audit five years after the fact.

One-line summary

Track every dollar in and every dollar out, distinguish current from capital, keep six years of receipts, and either claim CCA deliberately or skip it deliberately — never accidentally. Get those four right and the T776 takes 30 minutes a year.