CRA reassessed me and added rental income I didn't report — what are my options?
If CRA has added rental income to your reassessment, it believes you received rental income that was not reported on your return. CRA learns about unreported rental income from a variety of sources: land registry searches, tips from tenants, property management companies, or industry benchmarking exercises.
Your first step is to determine whether the reassessment is factually correct. If CRA has made an error — for example, it identified rent you received but failed to allow expenses you incurred as a landlord — you should gather your rental income and expense records immediately. Allowable expenses for rental properties include mortgage interest, property taxes, maintenance and repairs, property management fees, and capital cost allowance on the building. Net rental income (rent minus allowable expenses) is what is taxable, not gross rent.
If the rental income is correctly included but expenses were simply not claimed on the original return, you may be able to reduce the reassessment by filing a T1 Adjustment or through the objection process to claim those expenses now. Act within the 90-day objection window and consult a tax professional to make sure you claim every allowable deduction and avoid missing the deadline.
Key takeaways
- CRA discovers unreported rental income from land searches, tips, and benchmarking.
- Net rental income is taxable — you can deduct expenses like mortgage interest, repairs, and property taxes.
- File a Notice of Objection within 90 days to dispute the amount or claim overlooked expenses.
- Gather all rental income and expense records promptly to support your position.