If you own a rental property that sits vacant for part or all of the year, the CRA still considers it a rental property for tax purposes, and you must report it accordingly. Vacant periods don't stop you from claiming eligible expenses like property tax, mortgage interest, insurance, and utilities, but you cannot claim a rental loss against other income unless this CRA rule may apply to you. The key is that the property must be available for rent to qualify for deductions; actively marketing or holding it for rental income matters more than whether tenants actually occupy it. Vacancy and rental property status are two separate concepts under Canadian tax law. A property is still considered a rental property if you own it with the intention of earning rental income, even if no one lives in it at the moment. The CRA focuses on your intent and actions, not occupancy.
Yes. Any property you own intending to generate rental income must be reported on Schedule 11, whether it is occupied or vacant. Report zero income if applicable and list all eligible expenses you paid during the year.
Yes, this CRA rule may apply to you: if the property was available for rent and you took steps to market it, you can deduct eligible holding costs like mortgage interest, property tax, insurance, and utilities, even with zero income.
A rental loss cannot offset your employment or other income. You can carry it forward to offset future rental income from the same or other rental properties, or carry it back to previous years under certain conditions.
There is no set time limit, but extended vacancy without evidence of marketing or rental intent (years with no advertising, no tenant showings) may prompt CRA to reclassify the property or disallow deductions. Keep documentation of your rental efforts.
The exemption applies only to years you actually lived in the property. Years after it became a rental property are not covered unless the property was continuously used for personal use during that period.