Real Estate Investor Accounting
Rental income, capital gains, GST/QST and ownership structuring for property investors across Québec.
Real estate tax turns on two questions: whether a profit is a capital gain or business income, and whether claiming CCA on a building helps or hurts. Both are decided by facts established long before the sale, not at filing.
Last reviewed:
Key facts
| Capital or income | Decided by intention at purchase, holding period, frequency and financing |
|---|---|
| CCA on a building | Cannot create or increase a rental loss; reduces the base and produces recapture on sale |
| Change of use | Moving out and renting is a deemed disposition at fair market value |
| Principal residence | The sale must be reported even when the gain is fully exempt |
| Authorities | Canada Revenue Agency and Revenu Québec |
Whether you own one rental or a growing portfolio, A&S Financials helps Montréal real-estate investors report rental income correctly, plan for capital gains, and choose the right ownership structure across properties. We handle the accounting and tax so you can focus on building your portfolio with a clear picture of your returns.
Book a consultationHow we help
- Rental income and expense reporting
- Capital gains and recapture planning
- Ownership and holding-structure advice
- GST/QST on real-property transactions
- Financing and refinancing support
- Portfolio-level reporting
Capital gain or business income is the whole ballgame
Not every profit on a property sale is a capital gain. Where the intention at purchase was resale at a profit, the whole profit is business income and fully taxable rather than a capital gain. The CRA weighs how long the property was held, how often you do similar transactions, what you did to make it saleable, and whether the financing only made sense on a quick resale. Assignment sales of pre-construction condominiums and short-hold flips are the fact patterns most often reassessed. The distinction is worth roughly half the tax, and it is settled on evidence created at purchase — listing history, financing terms, correspondence — not on what you say at filing.
CCA on a rental building usually costs more than it saves
CCA on a building cannot create or increase a rental loss, so the shelter is capped at the rental profit. Every dollar claimed also reduces the undepreciated balance, and a sale above that balance brings the claimed amount back as recapture — taxed as ordinary income, not as a capital gain. For a property expected to appreciate and be sold, deferring the claim is often the better position: you give up a deduction now against fully taxable income later. CCA is also what most often converts part of a principal residence to income-earning use. Renting a portion of your home while continuing to live there is usually acceptable where the use is ancillary and no structural change was made — claiming CCA on the rented portion is what breaks it.
Frequently asked questions
Should I claim CCA on my rental property?
I am moving out and renting my home. What happens?
Do I have to report the sale of my principal residence?
Is flipping a condo a capital gain?
Speak with a Montréal CPA
Contact us to discuss your accounting and tax needs — in the language you prefer.