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Capitalize On Your Rental Property With Home Renovations

August 27, 2013

revision renovations, vancouver, contractor, home remodel, house, dream homeAs a bookkeeper and tax consultant I am often asked the question “Is there a way that I can save money on, or claim a tax deduction for, my home renovations?”

In relation to claiming a tax deduction on the house in which you live,  in most cases my answer is “no” unless you are a sole proprietor and you work from home. In this case you are able to claim the cost of renovating your home office (and only this portion of your home) as a tax deduction.

However, there are many deductions that you can claim if you own a rental property. Some  which subsequently allow you to receive a write off for any home renovations you complete.

The following is a  list of write-off’s you can claim against your rental property income:

  • Advertising expense – You can write-off any costs associated with advertising that your property is for rent.
  • Interest expense – Any interest accrued on the mortgage for your rental property is tax deductible.
  • Office expense – You can claim any administration costs associated with renting out your property.
  • Legal/accounting – You can claim any legal or accounting fees that are associated with the property.
  • Management fees/Strata – Fee’s that are associated with owning a condo.
  • Repairs and Maintenance – Any costs associated with fixing issues with, and maintaining your property.
  • Capital Improvements – This is the category that any renovations would fall under. If you renovate your rental property you can claim the expense over a number of years.
  • Salaries – for a property manager
  • Property Tax
  • Travel – if your property is out of town you can claim the cost of travelling from your place of residence to the rental.
  • Utilities
  • Insurance

Please be aware that rental properties are considered a business, and will therefore be charged at the Business Tax Return rate.

If you budget correctly renovating your rental property can be a wise decision, it can increase the value of the property and  the value of your rent as well as provide you with some great tax deductions.

Small-Business-consulting

Teya Mali is the lady in charge at Homeroom Small Business Solutions Inc., a company built to be exactly what you’d expect from cool chicks doing books. They are meticulous, organized, detail-oriented and accurate. Homeroom’s mission is to serve the needs of small business owners by streamlining their businesses, bringing clarity to their financial records and by providing them with the tools they need to ensure a prosperous future.

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  • I want to thank you again for the great service you have personally provided from start to finish of our project. It has been very much enjoyed and appreciated.

    I would be happy to speak with any future prospective customers on your and your companies behalf.

    , Vancouver
  • We have undertaken several projects over the past couple of years using your company’s services and have found you to be attentive to our needs and concerns, responsive to our requests, and as efficient as the busy construction industry can under existing conditions.

    , Tsawassen
  • When our renovations were complete, we were very pleased with the quality and detail of the work that had been done. Also the estimated time in which Todd quoted at the beginning was accurate.

    , Richmond
  • Todd is very organized and detail-oriented as well as being incredibly reliable…Todd represents a high level of professionalism within the work being done as well as on a personal level.

    , Vancouver
  • A special thanks is due to Todd for seeing to it that the work progressed efficiently, with materials and trades people arriving when needed.

    , Langley
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