Mileage/Travel Write-Offs for Rental Properties
It’s not unusual for owners of rental properties to rack up a lot of mileage dealing with their rentals - repairs, addressing tenant issues, collecting rents, etc. all add to your costs. We get asked frequently about whether or not you can claim mileage or travel expenses against your rental income.
When you own rentals that are a separate property from your own home, the answer is yes, but how much you can claim depends on how many properties you own. When you are renting out a portion of your own home, you cannot claim any mileage or travel expenses related to buying materials for repairs, etc.
If you own one rental property:
You can deduct reasonable motor vehicle expenses if you meet all of the following conditions:
- you receive income from only one rental property that is in the general area that you live in
- you personally do part, or all, of the necessary repairs and maintenance on the property
- you have motor vehicle expenses to transport tools and materials to the rental property
If you own two or more rental properties (with properties located in two different sites, away from your own home):
In addition to the expenses listed above, you can deduct reasonable motor vehicle expenses you incur to do any of the following:
- collect rents
- supervise repairs done by others
- manage the properties
So, owners of one property cannot claim mileage for trips to collect rents or supervise others doing repairs, but owners of two or more properties can deduct mileage costs for those tasks.
Just like a business owner, you cannot claim a flat per-km amount for your mileage as the expense. You are required to keep mileage logs which show your total mileage for the year, and within that, the total mileage related to the eligible activities related to your rental listed above (including dates & purpose of trip).
However, CRA has a provision that once you have kept such a detailed mileage log for one year, in subsequent years you are only required to keep the log for three months, and then can extrapolate the total year’s amount from there. More and more landlords are now using apps on their phones to make tracking mileage a lot easier too.
When your rental property(s) is located some distance from where you live, you can deduct travel expenses you incur to collect rents, supervise repairs, and manage your properties. However, eligible travelling expenses only include the transportation cost of getting to your rental property (ie. mileage, airfare, etc.) but do not include board and lodging, which are considered personal expenses by the CRA.
If your travel expense is mileage using your own personal vehicle, the expense is determined via the same method as noted above for local mileage (ie. based on a mileage log). Expenses claimed for other modes of transportation would be the costs incurred for airfare, car rentals & fuel, etc.
So, the good news is that you can indeed deduct costs you incur travelling to your rental properties, whether locally or beyond. Just be sure to properly track your mileage, and claim for trips based on the guidelines for what activities are eligible for the expense based on how many properties you own!