When renting-out a Principal Residence, there’s some planning. First on the to-do list — review the Tax Act. it outlines specific ways to designate the change of use of a Principal Residence — including capital gains rules.

Generally, rental income and expenses would be reported on an annual tax return. Deductions could include mortgage interest, insurance premiums, property taxes, advertising costs to rent the house, utilities, travel to and from the property, as well as legal and accounting costs. Find out more at www.cra-arc.g.ca

Also, replace the homeowners policy with a rental policy. This type of insurance usually covers the building and provides liability protection but doesn’t cover possessions, so it tends to cost less than a regular homeowners policy. The lease should include a section requiring tenant to buy renters Contents & Liability Insurance and provide proof of the same.

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