Utility costs paid by the rental property owner are generally deductible rental expenses in Canada. If you cover electricity, water, gas, internet, or other utilities for your tenants, you can claim these on your tax return. However, the deduction depends on whether you pay the utilities directly or the tenant does. If your tenant pays utilities, you cannot claim that expense. The CRA allows utility deductions because they are ordinary operating costs necessary to maintain a rental property and keep it habitable. The utilities you can deduct include: - Electricity and hydro - Natural gas and heating fuel - Water and sewage - Internet and cable services (if included in the rental agreement) - Trash and recycling collection - Phone lines dedicated to the rental property The key rule is simple: if you pay the utility bill directly to the provider, and the expense is necessary to operate the rental property, it qualifies for deduction. If your lease agreement requires tenants to pay their own utilities, you cannot deduct those costs. The CRA treats tenant-paid utilities as part of your rental income arrangement rather than a landlord expense.
No. If your tenant pays utilities directly to the provider, you cannot deduct those costs. The CRA only allows deductions for utilities you pay. If you want to claim utilities, you must pay the bills yourself and include the cost in your rental fee.
Yes, if they are included in your rental agreement and you pay the bills directly. Internet and cable qualify as deductible utilities only if the tenant cannot disconnect or opt out of the service.
If all units share one meter, deduct the full bill. If units have separate meters but you pay some bills, deduct only those costs. Document your allocation method clearly if you divide shared costs proportionally among units.
Utilities paid by tenants and any utility costs for personal or mixed-use spaces are not deductible. For example, if you live in one unit of a multi-unit building, you cannot deduct utilities for your own living space.
Yes. Keep all utility bills and payment confirmations for at least six years. The CRA may request these documents during an audit to verify your deductions. Digital copies and statements from utility provider websites are acceptable.