Principal Residence Home
 

For a home designated as principal residence that you own, would rental income be required to be reported?

I'm not in the public accounting world, so my knowledge is limited in this respect. Based on what I read online, as long as it a small portion to the overall home, then you don't have to. E.g. My place has two floors and renting out a basement suite on one side, which makes up only 25% of total overall space. The home itself overall isn't intended to be income generating, but to live solely. Like say I collect $2000 a month cash, I'm afraid they may question when I deposit into the bank.

Unless it’s to family it’s a grey area at best, if you ever get audited and they see constant deposits coming in then it’s pretty clear the suite is generating income

We were torn as to claiming our suite or not but we will end up claiming the income anyways because for the next two years we should have enough deductions to negate the taxes on the rental income. You can also use the rental income, claimed or not (but it’s pretty sketchy to use non claimed rental income this way) as leverage into a HELOC, mortgage etc.

The home itself was not structurally changed to be rental accommodating, no CCA is being claimed, and small overall % portion of overall home is rental. Based on what has been referenced online, I don't believe there is tax implication as it would still be deemed "principal residence" usage.

But yeah, seems kinda grey as mentioned.

Officially rental income must be reported, whether it is rental income or professional income is a different story. But based on what you said, only providing a room, suite, and the bare necessities (heat, electricity, washing, etc) then it should be classified as rental income.

For official purposes, generally any income you make must be reported, the tax man doesn't like being excluded from the party. Rental income is reported on line 126 on your T1 for total income. You must fill out and attach schedule T776 for your next tax return.

You can choose not to report it, but if you're getting cash I probably wouldn't deposit exactly $2000 every month into my account lol.

^yup, you are correct. Did some research today, the home is deemed principal residence, but any income earned is to be reported.

Keep in mind when you file taxes you renter will be filing theirs as well. Both your addresses will be the same. There is always a paper trail. Eventually the city will come aware of it and tag you with an increase to utilities and property tax

the city can go fucks themselves.

my full house has two people living in it now, yet I pay utilities as if it I could have 3 other bedrooms occupied by family.

yet i get one single person living in my basement suite and now they want more money...lick a dick

A little unrelated to OP's question but I figured I'd piggyback on it since it's sort of a grey area question about principal residence. Asking for a friend:

Friend recently sold her house. She had lived in it for several years but moved to the US for work and currently still resides there. Her mom lived in the house during this whole time rent free but recently moved, hence the reason for selling the place.

The question is whether this is considered a principal residence for her from a CRA standpoint? There was no rental income, but I'm wondering if CRA could argue capital gains from the increase in property value. (or is it a moot point seeing that it wasn't ever rented out and earning income)

This is likely a tax professional question (which I'll pose to my accountant as well) but figured I'd throw this one out there and if someone has an answer, it would probably save some bucks since it costs money to talk to any professional these days.

i would think in that scenario she would be subject to the tax