Why vacancy is a growing challenge for Ontario landlords in 2026

Ontario vacancy rates are at a multi-year high

Ontario landlords can address vacancy in 2026 by pricing units to current data, sharpening listings, screening tenants thoroughly, and building tenant relationships that cut costly turnover. According to Canada Mortgage and Housing Corporation (CMHC)’s 2025 Rental Market Report, released December 11, 2025, the Greater Toronto Area’s purpose-built vacancy rate climbed to 3.0% in 2025, its highest level since before the pandemic. Nationally, the average vacancy rate for purpose-built rental apartments across major centres rose to 3.1%, up from 2.2% in 2024. CMHC’s 2026 Mid-Year Rental Market Update, published June 9, 2026, shows asking rents continuing to decline in Toronto, Vancouver, Calgary, and Ottawa as new supply keeps arriving.

What softer conditions mean for individual landlords

A softer market shifts leverage toward renters. Nearby buildings competing for the same applicants, longer lease-up periods, and more comparison shopping all mean a unit priced or presented the way it might have been two years ago can sit empty far longer than a landlord expects. CMHC’s 2026 update notes that in some cases, it can now take months to fill a vacant unit, particularly in newer or higher-priced buildings. liv.rent’s own July 2026 Ontario Rent Report confirms the same pattern locally: most GTA municipalities recorded lower year-over-year unfurnished one-bedroom rents this July, with declines ranging from 0.6% in Burlington to 15.8% in Markham, and only Milton bucking the trend with a slight 0.3% increase. One-bedroom units accounted for 50.33% of active GTA listings this July, per the same report, so landlords in this segment face the most direct competition.

The real cost of a vacant unit

Every week a unit sits empty means a week of lost rent, on top of cleaning, advertising, and the hours spent screening applicants. Those costs add up quickly and rarely show up in a landlord’s initial budget for a vacancy. On a $2,000 monthly rent, for example, the lost rent alone breaks down like this:

That’s before adding cleaning, advertising, and screening time, which is why treating vacancy reduction as an ongoing part of managing a rental, rather than something to handle only once a tenant gives notice, keeps those costs from compounding.

Strengthen your rental listing to shorten vacancy time

Photos, pricing, and first impressions that convert

A listing’s first impression often decides whether a renter clicks through or scrolls past. Clear, well-lit photos, an accurate description of the unit’s condition and features, and a price that matches what similar units are actually renting for all shorten the time a listing stays up. With apartments accounting for 94.96% of active GTA rental listings this July, per liv.rent’s July 2026 Ontario Rent Report, most landlords are competing against near-identical unit types, so overpricing, more than any other single factor, is why units sit empty in a softening market.

Writing a listing description that attracts qualified tenants

A good listing description is specific rather than vague: square footage, included utilities, parking, and pet policy should all be stated upfront so renters can self-select before they apply. For tips on structuring a listing that converts, see liv.rent’s guide on how to write an attractive rental listing.

Incentives are shaping how landlords compete for renters

CMHC’s 2025 Rental Market Report found that 75% of GTA structures completed since 2022 offered at least one incentive to attract tenants during their lease-up period, most commonly one to two months of free rent. CMHC’s 2026 Mid-Year Rental Market Update adds that landlords are increasingly turning to free or discounted parking, gift cards, move-in credits, and cash bonuses to compete for renters in a softer market. Reaching a wide, verified pool of renters matters just as much as the incentive itself.

Price your unit right to avoid prolonged vacancy

Compare your rent to current Ontario data

Pricing decisions should start with the most recent local data rather than last year’s numbers. Per liv.rent’s July 2026 Ontario Rent Report, the City of Toronto’s average unfurnished one-bedroom rent fell year over year by $87 to $1,961 a month, while most GTA municipalities recorded lower year-over-year rents this July. Rents are still easing month to month too: Toronto’s unfurnished one-bedroom average slipped another $9 in July, while the furnished equivalent fell $11 to $1,918. Rent per square foot tells a similar story regionally, ranging from $2.81 in Downtown Toronto to $1.31 in Brampton this July, so where a unit sits within the region matters as much as its size.

Source: liv.rent’s July 2026 Ontario Rent Report.

That’s a $480 monthly gap between the region’s most and least expensive tracked municipalities, Oakville at $2,132 and Oshawa at $1,652, a reminder that hyper-local data beats a single citywide number when setting an asking rent.

Incentives versus lowering the asking rent

Landlords facing a slow lease-up have two main levers: lower the advertised rent, or keep the rent steady and add an incentive, such as a free month or reduced parking. Incentives can be easier to reverse once the market tightens again, while a lower asking rent may become the new comparable for future renters in the building.

Track neighbourhood trends with rent reports

Rent conditions vary block by block, not just city by city. Downtown Toronto, for example, saw one of the smallest year-over-year declines in the GTA this July, just 1.0%, easing from $2,127 to $2,106, while still ranking among the region’s highest-priced submarkets. Following liv.rent’s monthly Ontario Rent Report gives landlords a running view of which municipalities and unit types are softening fastest, so pricing decisions can be adjusted before a unit has already sat vacant for weeks.

Tenant screening: filling your vacancy with the right renter

What Ontario landlords can legally ask during screening

Ontario Regulation 290/98, a regulation under the Human Rights Code, sets out the business practices landlords may use when selecting a tenant. According to the Ontario Human Rights Commission, landlords may request credit references, rental history, and credit check authorization, and may request income information only if they also request the others. None of these tools can be used to screen out an applicant based on a protected ground such as race, family status, or disability.

Key documents to request: income, credit, and rental history

A consistent screening process, applied the same way to every applicant, protects both the landlord and the tenant. Request the same documents from every applicant: proof of income, consent for a credit check, and contact information for a previous landlord.

Why rushing the screening process costs more than waiting

Filling a vacancy quickly with an unscreened tenant can create far more expensive problems than a few extra weeks of vacancy, from missed rent to a lengthy Landlord and Tenant Board process to resolve it. liv.rent’s built-in tenant screening tools, including the Trust Score credit and background summary, let landlords assess applicants quickly without cutting corners.

Tenant retention strategies that prevent vacancy before it starts

Early lease renewal conversations reduce turnover

The cheapest vacancy to fill is the one that never happens. Reaching out to a good tenant a couple of months before their lease ends, rather than waiting for them to bring it up, gives both sides time to work out a renewal instead of defaulting to a move-out.

Maintenance responsiveness as a vacancy prevention tool

Tenants who feel their maintenance requests are handled promptly are far more likely to renew. Slow repairs are a common, avoidable reason good tenants start looking elsewhere.

Weighing a rent increase against the cost of re-leasing

On a $2,000 monthly rent, Ontario’s 2026 guideline of 2.1% adds $42 a month, or $504 a year, if applied to a sitting tenant. Compare that to the cost of a turnover: lost rent while the unit sits empty, cleaning, advertising, and screening time, and, in CMHC’s words, in some cases it can now take months to fill a vacant unit. In a softer 2026 market, retaining a reliable tenant is often the better math.

Understanding vacancy decontrol and what it means for Ontario landlords

What vacancy decontrol means under the Residential Tenancies Act

Ontario’s annual rent-increase guideline, 2.1% for 2026, applies to a sitting tenant’s rent. It does not apply once a unit becomes vacant and a new tenant agrees on a rent amount with the landlord, according to Ontario’s residential rent increases page, last updated June 23, 2026. This is commonly known as vacancy decontrol.

How to set market rent for a new tenancy

Once a new tenant signs a lease, the 12-month rule and the annual guideline apply going forward for that tenancy. Landlords must still give 90 days’ written notice, using the proper Landlord and Tenant Board form, before any future increase takes effect.

Rent-controlled versus exempt units in 2026

Buildings, additions, and most new basement apartments first occupied for residential purposes after November 15, 2018 are generally exempt from the rent-increase guideline entirely, per Ontario’s rent increase rules. For a broader look at how these rules interact with eviction notices and tenant protections, see liv.rent’s Ontario rental laws resources.

How liv.rent helps Ontario landlords address vacancy faster

Listing your Ontario rental on liv.rent

Every strategy in this guide, sharper pricing, a stronger listing, careful screening, and tenant retention, works better with the right tools behind it. liv.rent gives Ontario landlords access to a large pool of verified renters, reducing the time a listing spends unseen by qualified applicants.

Built-in screening, digital leases, and dashboard tools

liv.rent’s landlord dashboard brings ID-verified applicants, Trust Score credit and background checks, digital lease signing, and rent collection into one place, so landlords spend less time juggling tools and more time filling the vacancy. For more on managing renewals and maintenance requests in one place, see liv.rent’s guide to the landlord dashboard and digital tools.

Getting started in minutes

Listing a rental on liv.rent takes just a few minutes, and landlords can post their first listing for free. Combined with the pricing, screening, and retention strategies above, it is a practical way for Ontario landlords to keep vacancy short and costly turnover rare in 2026.

The post How Ontario landlords can address vacancy in 2026 appeared first on liv.rent blog.

What to know before buying a rental property?

Jumping into the world of rental properties can be daunting if you don’t know what to look for. There is more to buying a rental property than you might think, from buying at the right time to making sure you get the financing right as well as realizing the tax benefits. This section breaks down the top three things you need to know when purchasing your first rental property in Canada.

1. Is it a good time for you to buy a property?

It’s important to look at your current financial standing to see if you can afford a property. Can you still cover your existing financial obligations long term, will you be able to cover closing costs, is your credit in good standing but most importantly do you have the 20% down payment to get started? It’s crucial to take a step back and consider all potential future costs and how they will impact you before committing to purchasing a property, waiting until the time is right could save you in the long run.

2. What type of property is best for you?

A big decision you have to make from the start is what type of property you want to buy, it’s important to consider how much time you have available to commit to issues that may arise from this property. Both houses and condos will come with some maintenance work, given the smaller footprint condos typically come with less. Depending on the building, you may also have access to an onsite property manager or concierge who can assist with the maintenance requests at your property for a fee. We dive into this topic a little later in this guide.

3. When should you consider financing?

Canadian banks are well-known for being conservative when looking to invest in rental properties, this means lots of hoops for you to jump through which may delay your timeline considerably. You should factor this in early, as it’s unlikely that you will be granted a mortgage as easily as your first property. You can take steps to help speed up this process, such as getting pre-approval, which typically lasts anywhere from sixty to ninety days depending on the lender.

The magic number that many banks look for is a debt-to-income ratio surpassing the 36% mark. What does this mean though? Debt to income refers to how much of your monthly income goes to paying your mortgage, typically the lower the ratio the better. This lets the bank know that you are in a good financial position and able to shoulder the burden of an additional mortgage.

How much money do you need to buy a rental property in Canada?

A figure that you will see mentioned a lot is needing to have 20% of your deposit ready, but why is this so important? If you have less than 20% of the total price of the property you are required to also purchase renters insurance which can add additional premiums to your monthly payments. The 20% rule doesn’t apply in every case it’s just a good rule of thumb for most people when looking for a mortgage. It’s best to research your province’s rules as there may be a better option and even some support made available to you.

Other factors you may want to consider:

• Closing Costs — One thing that often gets overlooked is factoring in closing costs. There are lots of different costs to cover but the major ones include land transfer tax, legal fees, inspection fees and title insurance. This calculator can help you estimate costs.
• Timing — You should always look to the market and try to identify if now is a good time to purchase a property. For example, after several years of high inflation Canadian homes are priced extremely high but we have recently seen a trend downwards in price.
• Taxes — While you do get some great tax benefits it’s important to consider how the purchase of a rental property will affect your taxes as a whole. You must pay Capital Gains tax upon the sale of the property and income tax on any rental income generated. These both will eat into your returns, but it is possible to offset this by making upgrades to the home so you can reap the full tax benefits. As well as this, if your mortgage costs are higher than the income generated from rent, you can deduct your rental loss against your other sources of income.
• Cost of rent — You should consider the average rent price you will charge for the property you are looking to purchase. You do this to know what you can expect to earn every month, and if it’s enough to cover your costs. This will give you a good idea if you’ll be at a net loss or gain every month.

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Do’s and Don’ts of purchasing a rental property

There is a lot to consider when purchasing an investment property and it can be easy to get bogged down. This section will lay out some important high-level things to make sure you get right, to make sure you are on the right path.

Dos

• Set a budget — It is important to be realistic when purchasing an investment property and plan accordingly. Will the property need renovations, is it ready to move in right away, how long has it been on the market? These are all important things to consider when setting a budget. There are some incentives that can help ease financial burdens.
• Determine how hands-on you want to be — This will largely affect the property type you choose, a townhouse or detached home will require more time investment whereas a condo will require a relatively low time investment.
• Get inspections — This could save you a lot of money down the line, by getting a home inspection you will catch any issues with the property. The average cost of a home inspection is roughly $500 depending on the size of the property.
• Check supports — Depending on a variety of other factors you may have some supports made available to you by the government. It’s important to check with your local and regional governments as they may have existing programs to assist you financially through low-interest loans, tax benefits and much more.
• Create a contract— Once you have the home ready to move in and a tenant lined up all that’s left is a contract. Liv.rent allows you to remove the stress of drafting your own lease agreement and revising endlessly. With liv.rent’s digital contract feature, create, send and sign your leases all in one go.

Don’ts

• Underestimate the time commitment — While rental properties are a great way to ensure you have a stable income over the long term as well as gaining tax benefits, they will not make you rich overnight. It is important to stay patient and slowly grow your investment.
• Go with unreliable tenants — The wrong renters can cause serious headaches for homeowners, including damaging the property, not paying rent, and disturbing you and your neighbours. Thankfully, it’s easier than ever to find reliable tenants through advanced tenant screening solutions like the Trust Score.
• Buy without doing your research — This may seem like common sense but can be a big mistake for many newer landlords. Make sure you research thoroughly everything about the property first before purchasing as this could save you money later. For example, if the property is in a flood zone this may drive insurance premiums up.
• Buy an older home— This largely applies to newer landlords, an older home will likely need repairs which can increase the cost burden and often put substantial financial pressure on newer landlords who do not have the resources to shoulder this burden.

Buying a house vs condo

Listing your investment property on liv.rent

There are plenty of advantages to listing your property on liv.rent. Designed specifically for modern landlords in Canada, this all-in-one platform has you covered for every step of the rental process. You can post on liv.rent and easily share to multiple different listing sites. This is especially helpful for first-time landlords & those who want to handle the process themselves, without a property manager. For first-time landlords in particular, we have everything you need, things like a centralized inbox for tenant communications and income statements can help you stay organized while maximizing your profits.

Landlords on liv.rent also benefit from our multi-layered verification processes for renters. As part of our commitment to building a safe & trusted rental community, we request renters upload documents to verify both their identity and income, as well as optional social media verification for an extra layer of security. When renters apply to your listing, you’ll be able to see their verification status with a handy checkmark to let you know that it’s safe to proceed.

Ready to get started? Here’s a quick video on how to post your property for rent on liv.rent:

FAQ: How to buy a rental property in Canada

Where can I find more resources on purchasing a rental property?

The Government of Canada cover most of what you need to know when looking to purchase your first rental property, liv.rent also provides a large bank of resources for both new and existing landlords.

Can non-residents own a rental property in Canada?

In short, yes non-residents can purchase an investment property in Canada. There are several criteria you need to fulfill though, such as having a 35% deposit (not from gifted funds), a reference letter from your bank, an employment letter etc… It is also important to check your province’s laws to see if there are any additional restrictions.

What is the 1% rent rule in Canada?

The 1% rule is a guideline for investors to determine if a rental property is a good investment. The rule states that the monthly rent of a property should be at least 1% of the purchase price. For example, if a property costs $200,000, the monthly rent should be at least $2,000 to consider it a potentially good investment.

Is it worth buying a rental property?

A rental property is a great investment as it continues to accumulate value it can also offer some great tax benefits. You just need to ensure that it is a good time for you to purchase a property. You need to make sure you have the available time, financial resources and will to undertake such an investment.

Can I rent out a property without telling my mortgage lender in Canada?

No, you can’t rent out a mortgaged property without informing the lender first. If you do this in Canada it will likely lead to your mortgage going into default. This guide has everything you need to know.

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What you need to purchase a home

Purchasing a home is a huge financial commitment and requires prospective buyers to make some preparations in advance. Before diving into the real estate market, it’s important to ensure that you’re financially and logistically ready. Here are key steps to consider:

• Financial Readiness: Assess your financial health by examining your savings, income, and credit score. Most lenders require a down payment of at least 5% of the home’s purchase price for a conventional mortgage. Additionally, homebuyers should budget for closing costs, which typically range from 1.5% to 4% of the home’s price.
• Documentation: Gather necessary documents, including proof of income (pay stubs, tax returns), bank statements, and identification. These will be needed for mortgage applications and other financial assessments.
• A real estate agent: Engaging a knowledgeable realtor can simplify the buying process. They offer valuable market insights, negotiate on your behalf, and help you navigate legalities. Choose a realtor with experience buying real estate in Alberta for the best results.

How to buy real estate in Alberta

Regardless of where in Canada you are, buying a home typically involves the same key steps, though some things, such as down payment assistance programs, will differ slightly in Alberta. Following this rough guideline and listening to the advice of a real estate professional is crucial to ensure a smooth and successful transaction

1. Deciding on your goals

When buying real estate in Alberta, it’s important to first decide exactly what you’re looking for in a home. Will you be living in the space or is this a rental property? How many bedrooms do you need? These are important questions to help narrow down your search.

2. Saving for a down payment

Once you have a clear idea of the type of property you’re interested in, you can calculate how much you’ll need to have for a down payment and plan accordingly.

It’s also important to figure out whether you want to plan for a high-ratio mortgage (less than 20% down payment) or a conventional mortgage (more than 20% down payment). While the former requires less savings upfront, you’ll face higher interest costs and CMHC fees as a result.

3. Building credit

Having a solid credit score and good income stability is essential for getting approved for a mortgage.

It’s generally accepted that you need a credit score of at least 640 to get approved for a mortgage, though this depends on your other finances and can vary depending on the lender. Having a stable income is also key to succeeding in mortgage approval.

4. Morgage Pre-approval

Getting pre-approved for a mortgage is generally one of the the first steps in a homebuying journey. This helps you understand your budget and shows sellers that you are a serious buyer.

5. House hunting

With your realtor’s assistance, begin your search. Focus on properties that meet your criteria and budget and if you plan on renting out your new property, be sure to consider potential rent prices in the area to evaluate whether you can earn a consistent profit.

6. Making an offer

Once you find the right home, your realtor will help you make a competitive offer. Be prepared for negotiations with the seller.

7. Home inspection

After your offer is accepted, conduct a home inspection to identify any potential issues. This step can save you from unexpected repair costs down the line.

This is similar to the process for inspecting a rental property, although there is often a licensed home inspector present and the process is much more thorough due to the significant financial stake.

8. Closing the deal

Once everything is in order, all that’s left is to finalize your mortgage and complete the closing paperwork. Your realtor and lawyer will guide you through this process to ensure everything is in order.

Renting vs. buying: which is right for you?

Many prospective homebuyers looking into buying real estate in Alberta will already be renting in the province and are looking to find something more permanent while building equity.

While purchasing a home may seem like an easy decision if you’re financially prepared, deciding whether to rent or buy requires careful consideration influenced by various factors:

• Financial Considerations: Buying a home typically requires a larger initial investment compared to renting. However, owning property can be a valuable long-term investment with the potential for appreciation.
• Flexibility: Renting offers more flexibility, allowing you to relocate with ease. Buying, on the other hand, provides stability and the freedom to personalize your space.
• Market Conditions: In Alberta, market conditions can vary. In a buyer’s market, purchasing may offer better value. Conversely, in a seller’s market, renting might be a more prudent choice until conditions improve.

Where to buy real estate in Alberta

Choosing the right location is crucial for both lifestyle and investment potential. While most people looking into buying real estate in Alberta already have an idea of where they’d like to own a home, it’s important to consider these factors when deciding where to buy:

• Larger Cities vs. Smaller Towns: Larger cities like Calgary and Edmonton offer diverse employment opportunities, amenities, and a dynamic real estate market. Smaller towns, while quieter, often provide more affordable housing and a close-knit community feel.
• Neighbourhood Considerations: Research neighbourhoods based on factors like proximity to schools, public transit, and recreational facilities. Safety, future development plans, and community vibe are also important considerations.
• Market Trends: Stay informed about market trends in different areas. Some neighbourhoods might be up-and-coming with great investment potential, while others may be well-established but more expensive.

If you’re considering renting out your property, it’s also important to keep an eye on rent prices in different Alberta cities to see where you can make the highest return on your investment.

How to rent out your home in Alberta

One of the most popular reasons to purchase a home is to own a rental property. Rent prices in major Alberta cities like Calgary and Edmonton have risen substantially in recent years, making this a lucrative time to enter the rental market.

If you plan to generate rental income from your new real estate purchase in Alberta, you’re first going to need to find tenants. It’s important to be diligent throughout the rental process and ensure you’re finding the best tenants possible. The last thing you want is for tenants to damage your new home, so being thorough while screening applicants is key.

This is where liv.rent comes in. This Vancouver-based rental platform was designed to help landlords save time and find the right renters faster with all-in-one solutions for everything from listing to signing a lease.

Here are some tips on how you can streamline the most important and time-consuming parts of the rental process and ensure you’re doing your due diligence in your search for the perfect tenants.

Tip #1: Share your listing to reach more renters

The best way to speed up your rental process from the get-go is to share your listing to as many platforms as possible. It’s tough to get your unit rented in a timely fashion if you don’t have enough leads, and being able to reach renters on a variety of sites is key to achieving this.

Once your listing has been posted on liv.rent, landlords can easily share it to popular platforms like Craigslist, Kijiji, and Facebook Marketplace, expanding your audience significantly and ensuring that you receive plenty of applications.

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Tip #2: Have a centralized “hub” for your listing

Now that you’ve got more applications than you know what to do with, it’s time to streamline things to help save time later on. Within each pre-formatted listing you share, there’s a link for interested renters to apply directly on liv.rent. One of the most time-consuming parts of the rental process is having to read through emails and messages from all different platforms to pick out the renters that you’re interested in continuing the conversation with.

By keeping all your communications limited to one convenient platform, you’re cutting down on the time this step typically takes significantly.

Tip #3: Go beyond a credit check

The single most important part of the rental process for laneway home landlords in particular is tenant screening.

It’s more important than ever to make sure that your new tenants are not only able to pay rent, but won’t cause any disturbances to their neighbours. Your promising new investment can quickly become a liability with tenants who interrupt your routines or worse – cause damage to your brand-new laneway house. It’s normal for landlords to perform a credit check on applicants to get a sense of their financial situation and ability to pay rent on time, but this doesn’t always tell the whole story.

This is why liv.rent developed the Trust Score – our comprehensive tenant screening tool. Using credit information from Equifax® and our own industry-leading verification features, this report combines all the information landlords need to identify the right renters quickly. An easy-to-understand score provides an easy way to assess and rank applicants, while information like a detailed risk assessment, income-to-rent ratio, and a unique trustworthiness metric help give you a full picture of applicants, even if they don’t yet have a Canadian credit history.

Resources for Alberta homebuyers

Here are some resources from liv.rent and trusted government sources to help you navigate the homebuying and renting process in Alberta:

• The latest liv.rent Calgary & Edmonton Rent Report
• Guides to Alberta cities and neighbourhoods
• Alberta Rental Law information
• Alberta Real Estate Association (AREA): Offers valuable market reports and resources for buyers.
• Canada Mortgage and Housing Corporation (CMHC): Provides mortgage calculators, affordability tools, and homebuying guides.

Rethink The Way You Rent

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>> Stay up-to-date on the average rent in Vancouver, Toronto and Montreal: Rent Reports.

The post How to buy real estate in Alberta appeared first on liv.rent blog.

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What are capital gains?

In broad terms, a capital gain is the difference between an asset’s cost and its total sale price. An asset could be a real estate investment property, a stock, or a mutual fund.

For example, if you were to purchase an apartment for $600,000 and later sell it for $750,000, you would have a capital gain of $150,000.

How are capital gains currently taxed?

At present, only 50% of capital gains are taxable. In the above case, the apartment seller would only need to pay tax on $75,000 of the total profit. This means that the current “inclusion rate” is one-half. So, when determining your taxable capital gains for the year, you would multiply your capital gain for the year by the current 50% rate.

What are the proposed changes?

The 2024 budget, announced on April 16, would raise the inclusion rate from one-half to two-thirds on capital gains over $250,000. If these changes are implemented, this would mean that taxpayers would pay at the existing rate of 50% for the first $250,000 in capital gains, but for every dollar over $250,000, they would be taxed at the proposed two-thirds rate.

This would be the case for individual taxpayers, however, the budget also proposes that corporations and trusts would have all capital gains taxed at the new two-thirds rate. It’s worth noting that these changes won’t affect the vast majority of Canadians, with over 28.5 million Canadians projected to be unaffected. In fact, data indicates that only 0.13 percent of the population, those earning an average income of $1.4 million per year, will pay more in income tax as a result of the Capital Gains Tax increase.

If the budget is approved, the changes will go into effect on June 25th.

What do landlords need to know about the Capital Gains Tax changes?

It’s important to note that the proposed changes do not impact the sale of primary residences, which remain exempt from the Capital Gains Tax. Despite this, some landlords may need to assess the potential ramifications of the capital gains tax adjustments.

Those planning on selling a secondary or rental property could find themselves subject to the higher capital gains tax rate, depending on various factors such as the property’s profit margin.

Put simply though, these changes don’t implicitly affect landlords renting out their property, and in fact are likely partially intended to discourage property owners from flipping their existing rental properties. With that said, landlords who are planning on selling property aside from their primary residence should be aware of these changes and their impact.

What do renters need to know about the Capital Gains Tax changes?

While renters themselves likely won’t be immediately impacted by the changes to the Capital Gains tax, it’s important for them to understand the potential implications of these changes on the rental market.

In the short term, these changes have the potential to raise rent prices as some landlords look to increase their profit from rental income rather than turn to a sale. However, the Canadian government has explicitly stated that one of the primary purposes of this year’s budget is to build more homes and create pathways to affordable housing. Over time, the extra tax revenue collected from the Capital Gains Tax income will likely result in less expensive rent prices across the country.

Rethink The Way You Rent

Not on liv.rent yet? Experience the ease of digital applications & contracts, verified tenants & landlords, virtual tours and more – all on one platform. Sign up for free or download the app.

Subscribe to receive the latest tenant & landlord tips and get notified about changes in the Canadian rental market.

>> Stay up-to-date on the average rent in Vancouver, Toronto and Montreal: Rent Reports.

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What is a presale?

Presale condos are the most common form of presale housing, giving homebuyers a chance to purchase property that is not yet completed and ready for move-in. Depending on the specific project, homebuyers may be able to buy before construction starts, during construction, or when construction has just been completed – depending on the goals of the developer. Often, this can mean purchasing a unit based on floor plans or preliminary models, so presale investors need to be able to visualize the finished unit and whether it will be right for their needs.

Typically, presale homes are sold at a lower price than their market value would be upon completion, making them an attractive option for investors seeking potential appreciation, as well as first-time homebuyers who wish to enter the market at a lower price point. Buyers secure their investment by putting down a deposit, and as the construction progresses, the value of the property can increase, potentially resulting in a profitable return on investment when the construction is finalized and the property is move-in ready.

Why invest in presale condos?

Purchasing presale condos offers several advantages that make it an attractive opportunity for buyers as opposed to a traditional home purchase. Firstly, presale homes often come at a lower price point than completed properties in the same area, making them more affordable for individuals looking to enter the real estate market. Presale buyers also have the advantage of potential appreciation – as the property is constructed and the market value increases, the value of their investment can rise significantly.

Another reason some homebuyers opt for presale condos is the opportunity for customization. Presale homes allow buyers more freedom to personalize their living space before it’s completed by choosing specific finishes and fixtures or even having input in the layout in some cases.

Most importantly for many, purchasing a presale home can be an excellent investment. Through presale condos, buyers can secure a property in a high-demand area before it’s even built, ensuring they have a foothold in a desirable location when the real estate market is competitive. Presale condos in Vancouver and surrounding areas like Burnaby, Richmond, and Coquitlam are very popular for this reason.

Finally, to help mitigate the risk of buying an unfinished property, presale homes often come with developer warranties and the assurance of modern, energy-efficient features, providing buyers with peace of mind regarding the quality and longevity of their investment.

Pros of buying presale condos

We’ve already explained why someone might want to purchase a presale home, but let’s now look at the more practical upsides to this type of investment. Here are some of the positives of purchasing presale:

• More selection — Buying uncompleted homes gives you access to more potential developments, often with preferred pricing and other incentives.
• Customizability — Depending on how close to completion the unit is, homebuyers will likely be able to customize various finishes such as flooring, lighting, and even paint colours.
• Delayed mortgage payments — Those buying presale won’t need to start making mortgage payments until the project is completed, giving them more time to save for a down payment and closing costs.
• Equity building — Often, especially for presale condos in Vancouver, housing prices will increase over the construction period which means there’s a potential to see profit before the home is even completed.
• Warranty protection — All presale homes in B.C. come with a standard 2-5-10 warranty to help reduce costs and potential risks for the new homeowner.
• Seven days to reconsider — Homebuyers have seven days to review the accepted contract before it becomes final and binding, giving them ample time to consider every aspect of their purchase.
• Higher rent prices — New homes tend to rent for substantially more than older ones, especially if they’re located in in-demand areas. Presale gives investors another way to own property in these areas and earn more income from renting if they plan to go that route.

Cons of buying presale condos

Of course, like any investment, presale condos aren’t without their downsides and risks. To help prospective homebuyers and investors better understand what their purchase entails, let’s look at the potential negatives of buying presale condos.

• Market fluctuation — Though presale homes can be a hugely profitable venture if housing market prices rise, there’s also a chance that the market takes a downturn and your home’s value falls before it’s completed. This is more an issue for investors looking to flip the property, as historically home prices will continue to increase in the long term.
• Profits aren’t certain — Similarly, there’s no guarantee that the price of your new home will increase between the time of presale purchase and completion.
• Getting mortgage approval — Although you can secure pre-approval when purchasing a presale, you’ll need to wait until the project is completed before you can finalize financing.
• Not purchasing a finished product — For some, it can be hard to purchase an unfinished property as it’s hard to visualize what it will look like based on floorplans. However, the flip side of this is that purchasers have more control over what the unit will look like in terms of finishes.

Renting out a presale home

One way investors can increase their chances of profiting off a presale home is by renting it out once the project is completed. Presale homes are a fantastic way to purchase a second property due to potentially lower initial costs, and renting it out later on can help to cover mortgage payments and offset the initial costs.

Renting doesn’t have to be stressful either, and can be an easy and effective way to earn a second income – if you have the right tools. To help landlords avoid risk and maximize their profits, liv.rent offers a streamlined, all-in-one experience with support for every step of the rental process – from listing to signing.

This Vancouver-based rental platform also helps reduce the risk of unreliable tenants with its comprehensive Trust Score tenant screening tool. Through a detailed report, landlords can take the guesswork out of renting with Equifax® credit information, identity & income verification, a detailed risk assessment, and much more.

FAQ: Investing in presale homes

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The post The pros and cons of investing in presale condos appeared first on liv.rent blog.

Interested in learning more about the laneway home construction process and how you can turn your secondary property into an income-earning rental property? Reserve your space at our collaborative webinar on June 15, 2023 at 11:00am PDT.

What is a laneway house?

Laneway homes are a common sight in B.C.’s Lower Mainland but even if you call Vancouver home, you may still not be totally familiar with what makes a laneway house. Simply put, a laneway house is a secondary home built on the property of an existing house. To be termed a laneway house, it must also border an alley or laneway, whereas a coach home refers to any secondary property in a more general sense.

Most municipalities in B.C. and many in Ontario permit the construction of laneway homes, and this form of housing has seen rapid growth in popularity lately, as governments recognize the need to increase density in urban areas. Laneway homes can be designed to match owners’ existing houses and meet a variety of unique needs. Generally speaking, laneway houses can range from 500-1000 sq. ft. with 1-2 bedrooms/bathrooms – though this isn’t a hard & fast rule.

Benefits of building a laneway house

There are countless benefits of building a laneway home for property owners that go far beyond just renting – though this is certainly one of their main draws. Building a laneway house in Vancouver is a wise investment for so many reasons and definitely something homeowners should consider, particularly if they’re already looking at purchasing a rental property.

Here are some of the main benefits of building a laneway house on your property:

1. Increased property value — Whether or not you’re considering selling your home any time soon, adding a laneway home is a great way to drive up your property’s value. The flexibility of these spaces for housing guests or family, or being used as an income-generating rental unit, is something many buyers specifically look for. Though there’s obviously an upfront investment required, you’re likely to recoup your money and then some upon selling.
2. Passive income — Renting out a laneway house is a great way to start generating rental income, which can help homeowners offset their mortgage costs or provide an additional revenue stream. Demand for rental housing in Vancouver is consistently high, and a well-designed laneway home can attract tenants and yield a favourable return on your investment in a relatively short time.
3. Adaptability — Laneway homes offer great flexibility in terms of how they can be used. They can function as a rental property, a separate living space for family members or guests, or a home office/studio depending on your needs. For those looking to downsize without leaving the neighbourhood they call home, laneways are a great solution.
4. Creating housing — Especially in Vancouver, there is a growing need for affordable housing options to meet the needs of the city’s many renters, not to mention the hundreds of thousands of new immigrants expected to arrive in the near future. Laneway homes maximize existing space to provide more housing options without changing the character of the city’s distinct neighbourhoods.
5. Safety & community — Laneway houses can also help keep neighbourhoods safe by adding a new presence in otherwise deserted alleys. They also help to grow individual communities by allowing new residents to move in without disturbing the existing character.

Challenges of building a laneway house

1. Zoning & permits — Every municipality, Vancouver included, has specific zoning and bylaw requirements that new laneway homes must meet. Homeowners must ensure that their property meets these requirements related to lot size, setbacks, building height, parking, and design guidelines. Navigating through the zoning and permitting process can be complex and time-consuming without the right help.
2. Cost —Though laneway homes tend to be much more affordable than purchasing an all-new property, there are still a number of expenses homeowners should consider before committing to construction. Fees for permits, materials, contractors, design, and much more can add up quickly once the process begins, so it’s important to consider all this beforehand.
3. Location — Not every neighbourhood or property is suited to a laneway house. If your lot is located close to a neighbour’s, you may face resistance over privacy concerns, for example. Furthermore, if you plan on renting, it’s important to realistically consider how busy your local rental market is if you plan on your new laneway becoming an income-generating asset.

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Building a laneway house: an overview of the construction process

As with any construction project, there are multiple stages to building a laneway house in Vancouver. From start to finish, homeowners are looking at about a 12-month timeline once all’s said and done, though this can vary greatly in other regions or for more complex cases.

Here’s how the process is usually broken down, with expert insights from Harvey Gill, owner and founder of Home Wealth Investments:

Survey, planning, and design –⁠ 1-2 months

Before you can start building a laneway house in Vancouver, or anywhere for that matter, a professional surveyor must assess the property to determine the boundaries, topography, and existing infrastructure. This information is crucial for the design and construction process and informs the steps to come.

The planning & design stage involves working with architects, designers, and potentially other professionals to create a comprehensive plan and design for the laneway home based on practical aspects of the property and the owners’ needs. This includes conceptualizing the layout, selecting materials, and addressing zoning requirements.

Cost/budget & permits –⁠ 3-4 months

Prior to breaking ground, a realistic budget must be calculated. Determining the cost and budget involves estimating the expenses for materials, labour, permits, and any additional requirements specific to the project.

The next step is obtaining the necessary permits and approvals from your local municipality or government. This includes permits to use city property during the construction process, as well as removing any existing structures, trees, and so on. You’ll also need to obtain the proper pre-approvals before any of this to ensure your proposal is on the right track, and there are other concerns during the construction process like applying for sewage or water connections.

Due to the complexity of budgeting and navigating through the permitting process, it typically takes about 3-4 months to complete this stage. Working with experienced professionals can make this process much easier though, and ensures you don’t miss anything along the way.

Construction –⁠ ~6 months

Once the planning, design, and permits are in place, the construction phase can finally begin.

This stage involves the actual building of the laneway home, including site preparation, foundation work, framing, electrical and plumbing installations, interior finishes, and landscaping if necessary. The duration of the construction phase can vary depending on the complexity of the project, but it generally takes around 6 months to complete the construction of a laneway home.

How to rent out a laneway house

If you plan to generate rental income from your new laneway house, you’re first going to need to find tenants. Especially since they’ll be living in your backyard, it’s important to be diligent throughout this process and ensure you’re finding the best match possible. The last thing you want is to have your search for tenants turn into a lengthy ordeal, or alternatively, be rushed and end up with trouble-making renters in your brand-new unit.

This is where liv.rent comes in. This Vancouver-based rental platform was designed to help landlords save time and find the right renters faster with all-in-one solutions for everything from listing to signing a lease.

Here are some tips on how you can streamline the most important and time-consuming parts of the rental process and ensure you’re doing your due diligence in your search for the perfect tenants.

Tip #1: Share your listing to reach more renters

The best way to speed up your rental process from the get-go is to share your listing to as many platforms as possible. It’s tough to get your unit rented in a timely fashion if you don’t have enough leads, and being able to reach renters on a variety of sites is key to achieving this.

Once your listing has been posted on liv.rent, landlords can easily share it to popular platforms like Craigslist, Kijiji, and Facebook Marketplace, expanding their audience significantly and ensuring they receive plenty of applications.

Tip #2: Have a centralized “hub” for your listing

Now that you’ve got more applications than you know what to do with, it’s time to streamline things to help save time later on. After all, if you’re renting out your laneway house, you’re probably not interested in spending countless hours filtering through applications.

That’s why within each pre-formatted listing you share, there’s a link for interested renters to apply directly on liv.rent. One of the most time-consuming parts of the rental process is having to read through emails and messages from all different platforms to pick out the renters that you’re interested in continuing the conversation with. By keeping all your communications limited to one convenient platform, you’re cutting down on the time this step typically takes significantly.

Tip #3: Go beyond the credit check

Likely the single most important part of the rental process for laneway home landlords in particular is tenant screening.

Since they’ll be living on your property, it’s more important than ever to make sure that your new tenants are not only able to pay rent, but won’t cause any disturbances to you, your family, or your neighbours. Your promising new investment can quickly become a liability with tenants who interrupt your routines or worse – cause damage to your brand-new laneway house. It’s normal for landlords to perform a credit check on applicants to get a sense of their financial situation and ability to pay rent on time, but this doesn’t always tell the whole story.

This is why liv.rent developed the Trust Score – our comprehensive tenant screening tool. Using credit information from Equifax® and our own industry-leading verification features, this report combines all the information landlords need to identify the right renters quickly. An easy-to-understand score provides an easy way to assess and rank applicants, while information like a detailed risk assessment, income-to-rent ratio, and a unique trustworthiness metric help give you a full picture of applicants, even if they don’t yet have a Canadian credit history.

FAQ: Building & renting a laneway house in Vancouver

About Home Wealth Investments

Home Wealth Investments is a group of licensed home builders with over 40 years of construction experience in the Lower Mainland. Specializing in building Laneway/Coach homes, they handle the entire project from budgeting and construction, all the way to tenancy & management. Their goal is to build high-quality, affordable homes at the best price point possible.

Interested in learning more about the laneway home construction process and how you can turn your secondary property into an income-earning rental property? Reserve your space at our collaborative webinar on June 15, 2023 at 11:00am PDT.

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Not on liv.rent yet? Experience the ease of digital applications & contracts, verified tenants & landlords, virtual tours and more – all on one platform. Sign up for free or download the app.

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The post Building & renting a laneway house in Vancouver ft. Home Wealth Investments appeared first on liv.rent blog.

Today, Canadians have more options than ever. Many choose to file their taxes themselves using certified software, while others prefer the convenience of working with an accountant or tax professional.

In this guide, liv.rent explores the pros and cons of each approach and shares key tax tips for renters and landlords preparing their returns for the 2026 tax season (filing 2025 income).

Filing your own taxes

With so many different types of software available to assist Canadians who want to file their own taxes, the DIY approach has become easier than ever. Submitting your yearly return can be daunting, especially if it’s your first time, but with a bit of preparation and understanding of Canada’s taxation laws, almost anyone can file their own taxes.

For renters, you won’t have to worry about much beyond the basic income tax requirements since you won’t be reporting any rental income on your return. With that being said, there are some examples of provincial credits for renters, as well as other benefits that may affect your return – like claiming work-from-home expenses, if applicable.

For landlords, filing your tax return can be a more elaborate undertaking. Not only will you need to report your regular income, but also any rental income you’ve earned – in addition to any expenses related to your rental property. As such, it’s important to maintain accurate, up-to-date records throughout the year to ensure you’re prepared when tax season comes around.

For both parties though, modern tax software can provide plenty of assistance with staying organized and on top of deadlines. Here are some of the biggest benefits and downsides of filing your own taxes.

Pros of filing your own taxes

1. Lower costs — By choosing to file your own taxes, you can save plenty of money on the fees and costs of hiring a seasoned professional. The average cost for an accountant or tax professional to prepare your return ranges from $150 to $350 in Canada, but can quickly grow higher – particularly for landlords who own multiple properties or have complex needs.
2. Greater control — Filing your taxes on your own means you’re pretty much solely responsible for ensuring the accuracy of your return and accounting for all the available benefits and deductions. This can be a lot of responsibility, but also allows you more opportunity to customize your tax filing process and work around your unique circumstances and eligibility for deductions.
3. Building your knowledge of taxation laws — Having at least a basic understanding of how the taxation process works and how to file is a skill that will be beneficial throughout your life. As well, being honest about your income and expenses can lead to increased financial awareness and help you make better decisions in regards to your business or spending.
4. Flexibility — While there’s no avoiding the CRA’s deadline for filing tax returns, doing your own taxes allows you to work within this timeframe as you see fit. By contrast, working with a professional will require you to work around their schedule and prepare the necessary information and documents for them well in advance of their specified deadline.
5. Potential for more accurate returns — Accountants and tax professionals are particularly busy as the filing deadline approaches and often have to handle hundreds of returns at a time. Through no fault of their own, this can result in mistakes being made or items being missed, particularly if they aren’t supplied with complete and accurate information. While it will require you to develop an understanding of tax laws, filing your own return has the potential to be more accurate since you’ll have the time to look it over yourself and make sure everything is correct.

Questions about filing your own tax return? liv.rent is here to help. Subscribe to our newsletter to stay up-to-date on our upcoming tax webinars – including live advice from Canadian tax experts.

Cons of filing your own taxes

1. Time-consuming — The obvious reason why many Canadian landlords or renters would choose not to file their own taxes is time. Many schedules simply don’t allow for spending hours assembling documentation, carefully entering numbers, and thoroughly checking the finished return for accuracy. Especially if you’re unfamiliar with the taxation process and the laws surrounding it, filing your own taxes can quickly become a time-consuming burden.
2. Potential for errors — While filing your own return can make for more accurate returns, it can just as easily result in mistakes being made if you’re not careful. Even when they’re busy, tax professionals are familiar with the ins and outs of the filing process and can help give you peace of mind that your return will be correct and not missing any key deductions. This is particularly important as errors can lead to penalties, interest charges, or even the dreaded audit.
3. Limited support — Although there are many resources out there to help you file your taxes, you won’t have the same level of support when preparing your own return. Those who go this route should be prepared to research the process on their own and be sure they’re familiar with the process prior to filing.
4. Missing deductions — Knowing what benefits and deductions are available to you is key for maximizing your refund or minimizing the amount you have to pay. For the average renter or landlord, it’s easy to miss one of the many provincial or federal credits that you may qualify for, and end up paying more taxes as a result.
5. Stress — Let’s face it. Preparing your own tax return is a fairly stressful experience for most people. Worrying about making mistakes and getting audited as a result is common, and can become worse if you own a rental business or have a complex tax situation.

Hiring a professional to file your taxes

For Canadian renters and landlords, hiring an accountant or tax professional to file your taxes can be a great way to keep things stress-free leading up to the filing deadline. With busy schedules and plenty of other things to think about, it can be worth it for many Canadians to outsource their tax return preparations to an expert.

Here’s a quick overview of the benefits and potential negatives that come with paying an accountant to prepare your tax return.

Pros of hiring a professional

1. Expertise — Tax professionals have extensive knowledge of Canada’s taxation laws and plenty of experience preparing tax returns. This expertise goes a long way to ensuring that your return is accurate, complete, and compliant with federal laws. Professionals can also help by providing advice and guidance on tax planning and assistance in the case of an audit.
2. Time savings — Tax preparation can be time-consuming, especially if you have a complex tax situation. By hiring an accountant, you can free up time and energy to focus on other aspects of your life, such as work, family, and for landlords – the many other responsibilities that come with owning a rental property.
3. Peace of mind — Working with an accountant or tax professional can give you peace of mind knowing that your return is being prepared by an expert with tons of experience. Additionally, in the unlikely situation that issues do arise with your tax return or if you are audited by the Canada Revenue Agency, your accountant can provide support and guidance throughout the process.

Cons of hiring a professional

1. Cost — Hiring a professional to prepare your tax return can be significantly more expensive than doing it yourself using tax software or traditional methods – especially if you have a fairly simple tax situation. With that being said, costs can vary greatly depending on the complexity of your return, and can often be worth it if you have multiple sources of income or other circumstances that might make filing your return more complicated.
2. Limited control — Working with a tax professional means giving up some control over your tax return reparation process. Although the professional will take your input and preferences into account, they will ultimately be the one making decisions about how to prepare your tax return.
3. Miscommunication — Clear communication is key when working with a tax professional. If there is miscommunication or a lack of clarity about your tax situation, or if you forget to send over a document or two, it could result in errors on your tax return or missed deductions or credits. It’s important to ensure that you have a clear and open line of communication with your tax professional to ensure that your tax return is prepared accurately and effectively.

Tax considerations for landlords

On top of the already numerous items all Canadians face when filing their annual tax return, landlords have a number of added considerations to take into account when tax season comes around. Many landlords have another occupation on top of their rental business, and will need to report their income from those streams plus any associated deductions, fees or expenses.

Here are some of the considerations landlords in Canada must take into account when preparing their tax return:

• Rental income — This one is hopefully obvious for most landlords, but it is mandatory to report any rental income you receive on your annual tax return.
• Expenses — Landlords should keep an eye out for deductible expenses related to their rental properties, such as mortgage interest, property taxes, utilities, and repair & maintenance costs. If you do plan on claiming any of these expenses, be absolutely sure that they were incurred for the purpose of earning rental income and that you have adequate records to support any deductions you claim.
• Depreciation — If your rental property’s value has declined in the past tax year, you may be eligible to claim depreciation on your rental property as a deduction on your tax return. This can help reduce your taxable rental income, but it’s important to ensure that you follow the CRA‘s rules and regulations for claiming depreciation, which can get complicated at times.
• Capital Gains Tax — This only applies if you’ve sold an investment or rental property for more than you paid for it. If you are liable for this tax, there are some exemptions and deferrals available to help minimize your tax liability – like the principal residence exemption.
• Property Taxes — Homeowners in Canada are subject to property taxes that are generally paid separately, at a different date from your income tax. These taxes are generally paid directly to the municipality your property is located in. Landlords in B.C. and Ontario in particular should be aware of extra taxes related to property ownership, like the Speculation & Vacancy Tax in B.C. and the Empty Homes Tax in Vancouver specifically, and the Vacant Home Tax in Ontario.

Questions about filing your own tax return? liv.rent is here tohelp. Subscribe to our newsletter to stay up-to-date on our upcoming tax webinars – including live advice from Canadian tax experts.

Tax considerations for renters

Renters, in comparison, have far fewer tax considerations to think about on top of what’s expected from every Canadian. With that being said, there are some deductions that may apply to renters, and general rules you should be aware of when preparing their own tax returns.

Here are some of the considerations renters who file their own taxes should take into account:

• Rent payments are not tax deductible — Renters are unable to deduct rent payments on their annual tax returns in Canada. There are a few rare exceptions to this, but for the majority of renters, rent payments are considered personal expenses and cannot be deducted.
• Moving expenses — If you move to a new rental property for work, school or business reasons, you may be able to deduct some of your moving expenses, like transportation and storage costs, travel expenses, and temporary living expenses on your tax return. However, there are specific rules and criteria that must be met in order to qualify for this deduction. To qualify, your new home must be at least 40 km closer to your new workplace or school.
• Provincial tax credits — In some cases, renters may qualify for province-specific tax credits like the Ontario Trillium Benefit, for example. These credits are often based on income requirements and other criteria, so be sure to check the requirements for qualification.
• Work-from-home expenses — If you worked from home and were required to do so by your employer, you may be able to claim home office expenses using the detailed method. A completed and signed T2200 or T2200S form from your employer is required. The temporary flat-rate method is no longer available.

Questions about filing your own tax return? liv.rent is here to help. Subscribe to our newsletter to stay up-to-date on our upcoming tax webinars – including live advice from Canadian tax experts.

Tips for filing your own taxes

Tips for landlords

1. Don’t overlook common expenses — Keep records of any eligible expenses you incur from your rental property, like property insurance, interest, professional services, office supplies, repairs & maintenance, and utilities.
2. Always claim interest payments — While Canadian homeowners can’t deduct their mortgage payments, you are eligible to claim any interest incurred on the amount borrowed to maintain your investment. This includes interest on your mortgage, line of credit, or any other type of loan associated with your investment property.
3. Differentiate between current and capital expenses — Essentially, current expenses refer to anything that keeps your property reasonably maintained. Capital expenses go beyond this, adding considerable value to your rental property. This includes things like repairs that extend the life of your property, improve it beyond its original condition, or any repairs made in advance of selling your property.
4. Stay organized — Filing your annual tax return is much easier if you already have all the necessary documentation assembled and are aware of what’s expected of you. Well in advance of the deadline, be sure you’ve collected everything you need and make sure all your forms are available through the CRA if you’re filing online using tax software.

Tips for renters

1. Use certified tax software — There’s a lot to keep track of during tax season, but you don’t have to do it alone. Thankfully, there are plenty of free tax software options in Canada that are NETFILE-certified by the CRA. Not only do these programs help save you time and prepare a more accurate return, they can often do a large part of the work for you by automatically finding relevant documents for your return from the CRA database.
2. Take advantage of tax credits — There are several tax credits and deductions that may be available to renters in Canada, such as the Ontario Trillium Benefit, the GST/HST credit, or the Climate Action Incentive. Make sure to review the eligibility criteria for each and claim all the credits you’re entitled to.

How liv.rent can help you file your own taxes

Bookkeeping and keeping track of your key documents are crucial parts of preparing for tax season. For both landlords and renters, there’s plenty of information that you might need when preparing your return.

To this end, liv.rent’s Chat Timeline feature is an easy way to stay organized and view all your necessary documentation in one convenient online location.

For landlords, liv.rent also provides detailed income expense statements as part of our Growth plan, which are stored securely in the cloud for easy access. As well, rent payments can be processed directly through the platform with multiple ways to pay and automated reminders to ensure you never miss a payment.

Rethink The Way You Rent

Not on liv.rent yet? Experience the ease of digital applications & contracts, verified tenants & landlords, virtual tours and more – all on one platform. Sign up for free or download the app.

Subscribe to receive the latest tenant & landlord tips and get notified about changes in the Canadian rental market.

>> Stay up-to-date on the average rent in Vancouver, Toronto and Montreal: Rent Reports.

The post Filing Your Taxes in 2026: What Canadian Renters and Landlords Need to Know appeared first on liv.rent blog.

Table of Contents

Can I rent my house if I have a mortgage in Canada?

If you’re considering renting out a house with a mortgage, you’re probably in one of two situations: either you’re looking to rent out a room in your primary residence, or you’re planning on purchasing a second property with the sole purpose of renting it out. In the eyes of lenders, these are very different cases, as the former is deemed an Owner-occupied mortgage, while the latter is a Non-owner occupied mortgage, which may be subject to the same rules and higher rates of a commercial mortgage.

Owner-occupied mortgage

Some lenders include conditions within the mortgage agreement that state that the property must be owner-occupied, meaning that the homeowner must reside on the property at all times. This is typically seen as a measure to prevent borrowers from defaulting on their loans, since they’ll still be present on the property. If you’re interested in renting out your entire property and living elsewhere, you’ll likely need to talk to your lenders about attaining a new mortgage.

Homeowners with an owner-occupied mortgage will generally face no issues in renting out part of their property, such as a basement, laneway house, or room. Nevertheless, it’s always best to notify your lenders in advance of any changes in occupancy, or at least consult your mortgage terms to ensure you’re not breaking any rules.

Non-owner-occupied mortgage

For prospective landlords interested in renting out an entire property while living elsewhere, you’ll need to make sure you have a non-owner-occupied mortgage. Since these are considered to be investment properties rather than primary residences, lenders may have stricter requirements for potential homeowners.

Non-owner-occupied properties are generally subject to the same restrictions as commercial mortgages, meaning that lenders may require a larger down payment, in order to secure their loan. For landlords looking to grow their portfolio, ensuring that your rental property’s mortgage allows for the unit to be non-owner-occupied is key.

Can I rent out my property without telling my mortgage lender?

Renting out your house without telling your mortgage lenders could jeopardize the agreement, leading to penalties in the form of costs and fees. If you find that the terms of your mortgage no longer meet your needs, homeowners are able to break or renegotiate their mortgage contract before the end of the term. This is typically done because another lender is offering a lower rate, but also applies to property owners looking to rent out their units.

For those looking to rent out part of their home under an owner-occupied lease, you’re likely in the clear – although it’s still smart to talk things over with your lender first, as they may require you to purchase additional insurance. While it’s a good idea to confirm with your lender that you’re using the property for this purpose, it isn’t strictly necessary.

On the other hand, if you already have a mortgage in place and are planning on renting out the property, you’ll first need to contact your lenders to make sure you’re within your rights to do so. Lying to your lenders or failing to disclose that you’re renting a property when you’re on an owner-occupied mortgage contract could constitute occupancy or mortgage fraud, so it’s best to be sure before you convert your home into a rental property.

How to rent out your home when you still owe a mortgage

So long as you adhere to the rules above and are upfront with your lenders, renting out your house with a mortgage is no more complicated than any other rental arrangement. In fact, the majority of landlords currently have a mortgage, using their rental income as a way to offset their monthly payments and other expenses.

For starters, you’ll need to evaluate how much rental income you’ll need to cover your monthly mortgage payments and ideally make a profit on your property. Entering information like your down payment amount and mortgage terms, as well as income & expenditures into a rental profit calculator is a great way to figure out what to charge for rent, but there are other factors to take into account as well.

When listing your home for rent, you’ll need to take into account your property’s location, unit type, features, and other factors when deciding how much to charge for rent and who you’ll market to. Have a look at rent reports for your area as well to get a sense of average prices for similar units.

Owning a rental property is a fantastic investment for those willing to put in the work. From screening tenants to staying up-to-date on rental laws, there’s a lot more to being a landlord than meets the eye. For landlords looking for an easier way to rent, there’s liv.rent – Canada’s go-to all-in-one rental platform and landlord productivity tool. From posting & sharing listings to signing contracts and receiving rent payments, liv.rent lets you do everything in one convenient, easy-to-use platform.

FAQ: Renting out your house with a mortgage

First-time landlord resources & checklists

If you’re considering renting out your property for the first time, it’s best to come prepared. Being a landlord is an excellent way to generate a second stream of income, but doesn’t come without its fair share of challenges.

We’ve compiled a list of resources for those considering renting out their home, as well as checklists for helping you navigate your first rental arrangement with ease.

Resources & guides

• The Complete User Guide To liv.rent For Landlords & Property Managers
• Airbnb vs. renting: which is more profitable?
• Landlord Guide: Rental Property Tax Deductions In Canada
• Should you hire a property management company?
• The best landlord apps for easier renting

Checklists for first-time landlords

• Rental inspection checklist for landlords
• Checklist 1: Preparing the rental property
• Checklist 2: Advertising the rental property
• Checklist 3: Screening tenants
• Checklist 4: Signing the lease agreement
• Checklist 5: Move-in checklist

Looking for an easy way to find tenants fast and maximize your profits from your rental property? See how liv.rent’s rental management & marketing features can help.

Rethink The Way You Rent

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Subscribe to receive the latest tenant & landlord tips and get notified about changes in the Canadian rental market.

>> Stay up-to-date on the average rent in Vancouver, Toronto and Montreal: Rent Reports.

The post Landlord guide: renting out your house with a mortgage appeared first on liv.rent blog.

What is the difference between Airbnb vs. renting?

Renting your unit as an Airbnb vs. a traditional rental has a few key differences. While both obviously involve temporarily allowing renters to occupy the unit in exchange for recurrent or one-time payments, they’re differentiated by the length and terms of the rental agreement, revenue potential, associated costs, regulations governing them, and tax practices. Let’s take a look at each of the above to provide a better idea of what each strategy entails.

Length of the rental agreement

This is the main differentiating factor between Airbnb vs. traditional renting. Airbnb functions as a short-term vacation rental platform, whereas normal renting typically sees contracts ranging from one month to a year. In most Canadian provinces, the norm is a one-year lease – meaning more stability, less vacancies, and lower turnover compared to Airbnb.

Revenue and earnings

Payment frequency, method, and amount all differ between Airbnb vs. traditional renting as well. Since Airbnb is used for short-term vacation rentals, payment functions similarly to a hotel. Stays are generally paid for on a nightly basis, commanding a higher daily rate due to a number of factors.

By contrast, traditional rentals take place over a set duration, with payments collected once during each given period – typically once per month. In general, this will typically result in a lower rent price per night compared to Airbnb, but this doesn’t take into account the assurance of having a steady tenancy

Estimated costs

Where traditional renting begins to look much more appealing is in the associated costs compared to renting via Airbnb. In addition to a standard service fee charged by the Airbnb platform, typically 3% of the booking subtotal, hosts are also responsible for cleaning between each guest, which adds up quickly as well.

Add on the regular costs associated with maintaining a rental property, and the costs of renting an Airbnb can quickly overwhelm the potential profits.

By contrast, traditional renting involves comparatively fewer costs for upkeep. For one, tenants are primarily responsible for the upkeep of the unit – cleaning, replacing small items like lightbulbs, and generally furnishing the unit unless otherwise specified.

Rules & regulations

Many landlords may not even be able to rent out their unit as a vacation rental, since some buildings and stratas – and even municipalities, in some cases – prohibit short-term rentals entirely. In both Vancouver and Toronto, for example, short-term rental hosts are required to obtain a license to operate, further complicating matters for landlords.

Traditional renting, while still heavily regulated in terms of living standards and tenancy laws, is permitted in the vast majority of situations.

Tax implications

Taxation for Airbnb hosts is a complicated subject, as rentals lasting less than 30 days may be subject to GST/HST in Canada. Much like with renting, Airbnb hosts will need to carefully keep track of both their current and capital expenses to report on their yearly tax return.

For both vacation rentals and traditional rentals, landlords will need to differentiate between Rental Income and Business Income, and report their earnings accordingly.

Pros and cons: renting out your unit as an Airbnb

As with any facet of renting, there are notable benefits and downsides to vacation rentals. Let’s explore the pros and cons of renting out your unit as an Airbnb in more depth now.

Pros of vacation rentals:

• Higher earning potential — Looking just at gross income, Airbnb tends to yield higher returns since the nightly rate is nearly always much higher than it would be for a traditional rental property. As we’ll see though, there are a few caveats in this regard and net income may not always be higher with Airbnbs.
• Flexibility — For landlords who are wary of a long-term rental commitment, Airbnb offers a few benefits. Since rental terms typically last from a night or two to a few weeks in duration, it’s easy to adjust the nightly cost to align with seasonal trends and busier periods. This can also be a positive when dealing with problematic tenants, as any potential issues will likely be resolved once the short-term rental is over.
• No lease agreement — For landlords who may want to use their property for their own purposes, being locked into a fixed-term lease could be a problem. Once a lease is signed, it can only be ended for a few important reasons, such as substantial renovations or for the landlord’s use. Ending a lease also requires plenty of advance notice, whereas Airbnb requires less commitment.
• Built-in insurance — Vacation rental platforms like Airbnb usually have a “host guarantee”, meaning that landlords are financially safeguarded from expenses associated with damage caused to their unit.

Cons of vacation rentals:

• More upkeep required — Vacation rentals require constant upkeep, with cleaning between every new tenant. Hosts are typically also responsible for restocking essential items such as soap and toiletries, similar to a hotel. For homeowners looking for a passive source of income, this may quickly prove to be too much work.
• Higher expenses — If you don’t want to clean the unit yourself between each tenant, paying for cleaning can quickly add up to a significant expense, taking away from your income. Combine this with the built-in service fee on many vacation rental platforms, and it’s easy for your profit margins to slip.
• Must rent furnished — Vacation rentals don’t give landlords the option of choosing whether to rent their unit furnished or unfurnished. While this might not be a huge issue for some, the extra liability and effort involved may turn some away. The most successful Airbnbs also provide bonus amenities, like pools & hot tubs for example, which require upkeep of their own.
• Less stability — Though nightly income tends to be higher with vacation rentals, it’s also very likely that your unit will be unoccupied some nights – particularly during down seasons. Bear in mind that on days where your unit is empty, you won’t be making any income.

Pros and cons: renting out your unit as a long-term rental

The positives and negatives of operating a long-term rental property are much better understood by most would-be landlords. Let’s look now at the pros and cons of traditional renting.

Pros of long-term rentals:

• Consistent income — As opposed to the uncertainties of short-term rentals, longer-term contracts provide certainty in the form of consistent rental income. This becomes particularly important in times when interest rates are high and investors’ margins are too slim to withstand the risks of lengthy vacancies.
• Less upkeep — Once your unit has been filled, there are comparatively less duties landlords will need to perform on a day-to-day basis than with a short-term rental. Though you’ll need to make sure you’ve done your due diligence in screening tenants thoroughly, your renters will be primarily responsible for maintaining the unit throughout the tenancy.
• Lower turnover — The assurance of an ongoing tenancy is of benefit to many landlords, as filling vacancies repeatedly can be both costly and time-consuming.

Cons of long-term rentals:

• Less earnings potential — Looking purely at the average nightly rate, traditional rentals typically bring in less rental income than vacation rentals. However, this is only the case of you’re able to have your unit rented for practically every day of the month, which isn’t always a reality for landlords using Airbnb.
• Less flexible — While many landlords prefer the certainty of a long-term lease, others may not like being locked into a lengthy contract.

Airbnb vs. renting: which is more profitable?

Ultimately, the question on most real estate investors’ minds is which strategy, Airbnb vs. renting, yields a higher ROI?

Unfortunately, there’s no clear-cut answer for this. Instead, it’s better to look at this topic on a case-to-case basis. While Airbnb can offer higher earning potential to homeowners whose rental properties are located somewhere with consistent, year-round interest, this often isn’t the case. Add in the many fees and expenses associated with vacation rentals, not to mention the added work, and it becomes clear that making passive income from a vacation rental isn’t as easy as many would believe.

Many of the most time-consuming tasks landlords face – like marketing, cleaning, and repairs – need to be repeated far more frequently with short-term rentals, since the turnover rate is much higher. This workload may not suit every landlord, and it’s worth keeping in mind that competition among Airbnb hosts is much higher as well, especially in areas with a large tourist presence.

If you’re looking to keep your passive income stream as passive as possible while earning steady rental revenue, renting on a longer-term basis is likely the better option for you. While on the surface, earnings from vacation rentals can be higher, this doesn’t factor in the 3% fee, constant risk of vacancies, slow periods, and so on.

It’s also worth mentioning the myriad digital rental platforms that have evolved to further simplify landlords’ rental operations, making them both easier and more profitable. Consider liv.rent for example. This all-in-one landlord productivity tool has intelligent solutions for everything from listing & advertising to digital contracts and rent payments – helping busy landlords rent their properties faster while saving time on key functions.

How to choose between Airbnb vs. renting

For investment-minded landlords, there are a few key concerns to take into account when deciding how best to rent out your property:

• Market rates — What are average rent prices like in your area? How does this compare for short-term and long-term rentals? While some areas may be exceedingly popular with vacationers, they may not garner as much interest from year-round renters – and vice versa.
• Location — Does the area in which your rental property is located have adequate demand for short-term rentals? Is this demand seasonal? If there isn’t consistent demand, it may be easier and more profitable to rent your property on a longer-term basis.
• Condition of rental property — It’s much harder to make your property stand out as a vacation rental than as a long-term home for renters. If your unit is older or lacks the wow factor many seek from Airbnbs, renting it as a home rather than a temporary destination is likely a better idea if you don’t want to pay for costly renovations.
• Local legislation — Before all else, make sure that vacation rentals are permitted in your area/building. It’s not uncommon for stratas and apartment buildings to disallow short-term rentals, so double-check that you aren’t breaking any rules by doing so. If you’re in Vancouver or Toronto, or another city that requires it, you’ll also need to ensure that you’re licensed to rent your unit on a short-term basis.
• Workload — How much time are you able to spend on your rental property? While long-term rentals involve more time spent screening tenants and arranging lease agreements and rent payments, the constant upkeep and marketing required by short-term rentals take a lot of time out of landlords’ already busy schedules.
• Bottom line — If all goes perfectly, Airbnbs can certainly yield a considerably higher ROI than long-term rentals. With that being said, this is far from the norm as it would involve having your unit rented practically every day of the year. The stability and consistent rental revenue from long-term rentals, while generally lower, provides peace of mind for investors worried about breaking even.

Should I turn my rental property into an Airbnb?

If you’re considering switching from traditional renting to Airbnb, it’s worth considering the factors above before taking any action. Many landlords simply see the higher earnings potential and think that converting their property to a vacation rental is the obvious solution, but this isn’t always the case.

As we’ve noted, this decision should primarily depend on how much time you have to dedicate to maintenance, upkeep, and marketing, as well as on the property itself. If you think your property would be able to command consistent, year-round interest and you don’t mind spending a bit more time on your property investment, short-term rentals may be the right choice.

For landlords who want their renting to be as automated and efficient as possible, liv.rent offers an excellent, entirely digital alternative that still allows you to maximize your profits. Many of the most time-consuming tasks for landlords are simplified with this all-in-one app, with the ability to carry out the entire rental process in one easy-to-use platform. Best of all, liv.rent is free to start – with a Growth Plan designed for landlords who want to take advantage of more advanced marketing and tenant screening features.

FAQ: Airbnb vs. renting

Can an investment property be used as an Airbnb?

This depends on your local legislation, as well as your building/strata’s rules. Before renting out your unit on a short-term basis, always consult with local rental and business laws and ensure you’ve attained the required licenses, if applicable.

Can running an Airbnb be profitable?

Operating a vacation rental property can certainly be profitable for landlords who are willing to put in the time and effort. Running a successful Airbnb takes skilled marketing and a good deal of upkeep though, so landlords should evaluate their own priorities before committing to this type of rental.

Is Airbnb a good investment?

Under the right circumstances and with enough work, Airbnb can be a great investment for landlords who want to maximize their ROI.

Have a look through the previous sections first though, as there’s more than meets the eye when it comes to vacation rentals.

How much do Airbnb hosts make per month on average?

It’s hard to gather an accurate average for rental revenue on vacation properties since every unit is different. It’s best to have a look at Airbnbs in your area to see how much hosts are charging, as well as explore average monthly rent prices to compare.

Is renting out an Airbnb worth it?

Again, this question really depends on what you hope to gain from your investment property and how much time you’re willing to spend to make your unit profitable. For many landlords, renting is a hands-off second income stream, so the prospect of constant turnover and the risk that comes with frequent vacancies isn’t worth it.

What is the downside of Airbnb?

Airbnb can be a great option for the right landlord, but it isn’t without its downsides. For one, the risk and amount of effort required to maintain a successful short-term rental operation are beyond what many landlords are willing to accept.

You can see our complete list of pros & cons for vacation rentals here.

Are you protected when renting on Airbnb?

One of the biggest fears associated with Airbnb is the potential for damage by short-term tenants. Thankfully, Airbnb does provide free insurance against damage through their AirCover program, up to $3 million USD.

Rethink The Way You Rent

Not on liv.rent yet? Experience the ease of digital applications & contracts, verified tenants & landlords, virtual tours and more – all on one platform. Sign up for free or download the app.

Subscribe to receive the latest tenant & landlord tips and get notified about changes in the Canadian rental market.

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The post Airbnb vs. renting: which is more profitable for landlords? appeared first on liv.rent blog.

Looking for a place to rent in Alberta? Browse for verified listings in Calgary and Edmonton using liv.rent – Canada’s safest, all-in-one rental platform.

Are security deposits legal in Alberta?

Yes. At the beginning of a tenancy, landlords may collect a deposit in the form of cash or property to cover costs such as damage to the unit, unpaid rent, cleaning that goes beyond normal wear and tear, and any other agreed-upon fees – such as legal fees, utilities, or late rent fees. The total amount of the security deposit cannot exceed one month’s rent. If it does, that deposit is considered illegal and unenforceable, even if it was agreed upon in the lease agreement.

What are the different types of security deposits in Alberta?

Under the Alberta Residential Tenancy Act, landlords can collect any number of refundable fees such as pet deposits, key deposits, damage deposits, etc. so long as the total amount of the deposit does not exceed one month’s rent.

Landlords can also request non-refundable parking or cleaning fees, but these are not considered part of the security deposit and are not subject to the same rules. For example, a landlord in Alberta may charge a non-refundable $200 pet fee, to be used for cleaning the carpets at the end of the tenancy. This is considered extraneous to the security deposit and does not have to be returned at the end of the tenancy, provided that the amount is reasonable to cover the cleaning and is agreed upon in the lease agreement.

Are damage deposits legal in Alberta?

Damage deposits are considered to be another name for security deposits or rent deposits in Alberta, and are governed by the same set of rules.

How much is a damage deposit in Alberta?

A damage deposit, or security deposit, cannot exceed what the tenant would pay for a full month’s rent. A damage deposit can also include key deposits, pet deposits, or other types of refundable charges, but the total amount must still be less than one month’s rent and can’t be increased during the period of the tenancy agreement.

Are damage deposits refundable?

Yes, security or damage deposits are refundable so long as they aren’t used to cover the costs outlined in the lease agreement. Landlords should provide tenants with a receipt for the security deposit and any other refundable fees that are collected, however, this isn’t required by law.

All security deposits that are collected must be held in an interest-bearing trust account and deposited within two days after the payment is collected. Any interest that is accrued on the deposit must also be returned to the tenant. The full amount must be returned to the tenant within 10 days of the end of the tenancy, or a written statement of account must be provided if the landlord plans on deducting from the deposit.

Can a landlord ask for a deposit before signing a lease in Alberta?

If a landlord wishes to collect a rent deposit, this should be done after signing the lease and before move-in. The terms of the deposit and the conditions for its return should be laid out in the lease agreement and signed by both parties.

If a landlord requests a deposit be paid before signing the lease, exercise caution – this is quite often a sign of a rental scam. While landlords can and should collect a rent deposit before move-in day, this should only be done once a contract has been signed.

How long does a landlord have to return the damage deposit in Alberta?

If the deposit is to be returned in full with no deductions, the security deposit and any interest accrued must be returned to the tenant no later than 10 days after they vacate the rental property.

If there are any deductions to the deposit for damages, repairs, utilities, late fees, or other specified reasons, these deductions must be listed in a statement of account and provided to the tenant within 10 days, along with the costs or an estimate of what the costs will be. Within 30 days, the landlord must provide the tenant with a final statement of account and any remaining balance of the deposit.

If a tenant does not receive either the full amount of the deposit or a statement of account within 10 days of ending the tenancy, they should contact the landlord in writing. If you still don’t receive anything from the landlord, renters may proceed through the court or the Residential Tenancy Dispute Resolution Service (RTDRS).

Can a landlord deduct from the deposit for cleaning?

Landlords may only use the security deposit to cover cleaning fees if the cleaning is required due to abnormal use of the property. Cleaning that is required because of normal wear and tear cannot be deducted from the deposit.

Can a landlord charge for cleaning in Alberta?

If a landlord wishes to explicitly charge for cleaning, they must collect this as a non-refundable fee, which must be agreed upon in the lease agreement. This is separate from the security deposit and should not be held in the same way. For example, if the renter plans on bringing a pet, a landlord may want to charge a non-refundable $200 cleaning fee to cover the extra cleaning that may be required.

What is the maximum deposit a landlord can take?

The total refundable deposit a landlord can collect in Alberta, including key deposits, pet deposits, or other refundable fees, cannot exceed one month’s rent.

Non-refundable fees are not subject to the same rules but must still be reasonable for the purpose they’re collected for.

Can a landlord charge you after you move out?

If a landlord plans on deducting from your security deposit after you move out, they must provide a written statement of account to you within 10 days of ending the tenancy. The deposit, minus any deductions, must be provided to you within 30 days of moving out, alongside a final statement of account.

The only situation in which a landlord can charge you after you move out is for unpaid rent or compensation, which can be done for up to a year after the tenant moves out.

How often does a landlord have to paint in Alberta?

There’s no specific timeline for when landlords have to paint in Alberta, and it is not required to paint the unit in between each tenancy. Under the Minimum Housing and Health Standards, landlords are required to ensure that walls and ceilings are in good repair, with no cracks or holes.

Looking for a place to rent in Alberta? Browse for verified listings in Calgary and Edmonton using liv.rent – Canada’s safest, all-in-one rental platform.

Rethink The Way You Rent

Not on liv.rent yet? Experience the ease of digital applications & contracts, verified tenants & landlords, virtual tours and more – all on one platform. Sign up for free or download the app.

Subscribe to receive the latest tenant & landlord tips and get notified about changes in the Canadian rental market.

>> Stay up-to-date on the average rent in Vancouver, Toronto and Montreal: Rent Reports.

The post FAQ: Everything you need to know about rent deposits in Alberta appeared first on liv.rent blog.