Ease those empty-nest blues: Rent out part of your home
Renting part of your home is a great way to supplement your mortgage payments and possibly help deal with empty-nest syndrome, but what are the tax implications?
For many Canadians, fall means back to school, translating into empty rooms for parents of the post-secondary crowd. In this article from the Globe and Mail, Tim Cestnick talks about the benefits of renting out that available space, and what it means when tax time arrives.
The most obvious benefit to renting a part of your property is the extra income, which can be used to accelerate your mortgage payments, save for retirement or use towards a child's education. In addition, when it comes time to prepare your income taxes, you will be eligible to deduct some costs that would be in your regular budget. These can include a percentage of the interest on your mortgage, property taxes, insurance, home repairs, utilities and much more. There are several regulations to be aware of as well, including the percentage of property being rented, structural changes, and reporting of income. It is recommended to consult a tax professional before commiting to renting out rooms.