Line 9281 - Motor vehicle expenses
You can deduct motor vehicle expenses in the following circumstances:
If you own one rental property - You can deduct reasonable motor vehicle expenses if you meet all the following conditions:
- you receive income from only one rental property that is in the general area where you live;
- you personally do part, or all, of the necessary repairs and maintenance on the property; and
- you have motor vehicle expenses to transport tools and materials to the rental property.
You cannot deduct motor vehicle expenses you incur to collect rents. These are personal expenses.
If you own two or more rental properties -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; and
- generally manage the properties
This applies whether your rental properties are located in or outside the general area where you live. However, your rental properties have to be located in at least two different sites away from your principal residence.
You can deduct motor vehicle expenses only when they are reasonable and you have receipts. You also have to keep records of the kilometres you drove for your rental properties and the total kilometres you drove in the year. You must also determine the total expenses paid for the vehicle in the year. For more information, see Keeping records.
What type of vehicle do you own or lease?
See Type of vehicle you own or lease before calculating your deductible expenses.
The types of expenses you can deduct on line 9281 include:
- fuel and oil;
- maintenance and repairs;
- licence and registration fees;
- eligible interest you paid on a loan used to buy the motor vehicle; and
- eligible leasing costs.
If you and somebody else own or lease the same passenger vehicle, the limits on capital cost allowance, interest, and leasing costs still apply. The total amount the joint owners can claim cannot be more than the amount that would be allowed if only one person had owned or leased the vehicle.
When a motor vehicle is also for personal use
If you use a motor vehicle (including passenger vehicle) for both earning rental income and for personal use, you can deduct only the percentage of expenses related to earning the rental income. To support the amount you can deduct, keep a record of both the total kilometres you drove and the kilometres you drove to earn rental income.
If you use more than one motor vehicle to earn rental income, calculate each vehicle's expenses separately.
For information on how to calculate the motor vehicle expenses that you can deduct, see Guide T4002, Business and Professional Income.
Forms and publications
- Guide RC4409, Keeping Records
- Guide T4002, Business and Professional Income
- Guide T4036, Rental Income
- Form T776, Statement of Real Estate Rentals
- Interest expense
- Keeping records
- Leasing costs - Motor vehicles used for rental income
- Line 9936 - Capital cost allowance
- Type of vehicle you own or lease
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