Credits & Deductions, Homeowner

Can I claim a tax deduction for my rent?

If you rent your home, your rent payment is most likely the biggest bill you pay every month. Wouldn’t it be great if you could recover some of those funds? Depending on your tax situation and province of residence, that just might be the case.

Ontario Trillium Benefit (OTB)

If you are a renter in the province of Ontario, your monthly rent will factor into your eligibility for the Ontario Trillium Benefit or OTB. Along with your annual income and age, the rent you pay is part of the calculation for this monthly benefit.

Special rules apply for certain types of rent situations such as:

  • Payments to a friend or family member who is not reporting the payments as rental income on his/her tax return are not considered to be rent payments for the purpose of the OTB. So if you pay your Aunt Mary $400/month and she doesn’t report that money as rental income on her return, you cannot include those payments when applying for the OTB.
  • Students who live in residence while attending post-secondary school can apply for the OTB. The actual amount of your residence fees isn’t used for the calculation – a set value is assessed by the Province of Ontario.
  • For married or common-law couples, only one spouse claims the OTB. It makes no difference which spouse makes the claim as eligibility is determined using the combined incomes of both spouses.
  • If you share accommodations with roommates, each of you can apply for the OTB. Calculate your portion of the rent only when filling out the application.

Manitoba’s Education Property Tax Credit

Residents of Manitoba who pay rent may be able to receive a credit of up to 20% of rent payments (or $700 whichever is less). For more information on Manitoba’s Education Property Tax Credit, see the following links:

This credit is calculated as part of the provincial section of the tax return and has special rules of its own:

  • Similar to the OTB, only one spouse claims the credit.
  • Unlike the OTB, if you share accommodations with roommates, only one of you can claim an education property tax credit for that residence for the time you were sharing.

Quebec’s Solidarity Tax Credit (Crédit d’impôt de Solidarité)

This is a refundable credit for low & middle-income families. There are 3 components to this credit: housing, QST, and those living in northern villages. Depending upon your eligibility, you may qualify for part or all of the components.  For more information, check out this video from Revenu Québec that will show you how to claim it and this article from TurboTax.ca.

Rent as a Home Office Expense

If you’re an employee and required to have a home office as a condition of your employment, a portion of your monthly rent can be included on your tax return, as an Employment Expense. If you are self-employed and use your home for business purposes or meeting clients you can also claim a portion of your rent as a Business Use of Home expense. Just like utilities, your deduction for rent is calculated by the size of your home office in relation to your residence. If 10% of your home is used for work or to run your business, then 10% of your rent can be used as either a business expense (for the small business owners and freelancers) or employment expense (for those required to have a home office as indicated on form T2200 completed and signed by your employer).

As with most other expenses, you are not required to submit your rent receipts if you file electronically. However, it is important to hold onto these receipts in case the Canada Revenue Agency requires more information.