Real estate investors file a T776 Rental Income schedule for each rental property, or a combined T776 if properties share the same ownership structure. The T776 flows into your T1 personal return. This checklist covers what you need to prepare it accurately for the 2025 tax year.
Rental Income Records
For each property:
- Total rent collected in 2025 (by month)
- GST/HST collected if applicable (see note below on new residential properties)
- Security deposits: note the amount held at year-end (not income unless forfeited)
- Any amounts received for lease termination or early departure
If you have co-ownership: Confirm the ownership percentage. Each co-owner reports their proportionate share of income and expenses on their own T776.
Rental Expense Receipts
For each property, collect receipts or statements for all expenses paid in 2025:
- Property taxes: Annual property tax notice or monthly pre-authorized payment records
- Mortgage interest: Year-end mortgage statement showing total interest paid in 2025 (interest only, not principal repayments)
- Insurance: Annual premium for landlord or rental property insurance
- Repairs and maintenance: All receipts for repairs, maintenance, and property upkeep
- Utilities: If you pay heat, electricity, or water for the tenants
- Property management fees: If you use a property management company
- Advertising: Rental listing fees, photographs, and marketing costs
- Professional fees: Accounting, legal fees related to the rental activity
- Condominium fees: If applicable
- Landscaping, snow removal, cleaning: Invoices from contractors
Repairs vs. capital improvements: Repairs that restore the property to its original condition are deductible in the current year. Improvements that add value or extend the property’s useful life are capital expenditures that go on the CCA schedule, not as current expenses. This distinction matters and is frequently reviewed by CRA.
Capital Cost Allowance (CCA) Schedule
If you have been claiming CCA on the property:
- Prior year T776 or CCA schedule showing undepreciated capital cost (UCC) at the start of 2025
- Class of the asset (residential rental buildings are typically Class 1, 4% declining balance)
- Cost of any capital improvements made in 2025 (these add to the UCC)
Note: You are not required to claim maximum CCA each year. Many real estate investors elect to claim less CCA or none to preserve the deduction for future years or to avoid a recapture situation on disposition.
If You Sold a Property in 2025
Disposition of rental property triggers a capital gain calculation and potentially CCA recapture. You need:
- Original purchase price and legal fees paid at acquisition
- Selling price and legal fees paid at disposition
- Prior CCA claimed (total cumulative CCA from all prior year schedules)
- Adjusted cost base adjustments (capital improvements made over the holding period)
Recapture occurs when your proceeds exceed the UCC. The recaptured amount is included in income in the year of sale, not as a capital gain.
GST/HST on Real Estate
New residential property: If you purchased a newly constructed or substantially renovated property for rental purposes, you may have a GST/HST new residential rental property rebate available. Documentation includes the purchase agreement, closing documents, and HST paid.
Short-term rentals: Properties rented for periods of less than one month are considered commercial activity and may require GST/HST registration and collection depending on your revenue. Short-term rental platforms may or may not collect and remit HST on your behalf. Confirm your obligation.
Commercial tenants: If you rent commercial property, GST/HST applies to the rent charged.
Principal Residence Consideration
If you lived in the property at any point, the principal residence exemption may reduce or eliminate the capital gain on disposition. You need:
- Years the property was designated as your principal residence
- Years it was used as a rental
The principal residence exemption is elected on Schedule 3 in the year of sale. It cannot be applied retroactively.
If the Property Is Held in a Corporation
The T776 applies to personally held rental properties. Corporate rental income is reported on the T2 corporate return. For a full overview of the corporate structure decision, see Should I Incorporate?. If your rental property is in a corporation:
- Corporate financial statements and rental income schedule
- Shareholder drawings (salary or dividends)
- Intercorporate loan documentation if applicable
Prior Year and Carryforward Items
- 2024 T776 or rental income schedules
- Prior year CCA schedules showing opening UCC balances
- Prior year Notice of Assessment (confirms RRSP room and any carry-forward items)
- Rental losses carried forward from prior years if applicable
CRA’s T776 guide is available at canada.ca.