Finding a tenant costs money, and what you spend to get the unit noticed is a rental expense. On Form T776, it goes on line 8521, Advertising.
What belongs here
The cost of advertising a space for rent, including:
- ads in Canadian newspapers, and on Canadian television and radio stations
- a finder's fee you paid to bring you a tenant
Keep the invoice or the receipt from whoever ran the ad. A listing confirmation showing the amount charged works the same way.
What does not belong here
Fees you paid a property manager or a rental agent to find new tenants are not advertising. Those belong on line 8871, management and administration fees, along with anything else you pay someone to run the property.
The distinction is who you paid and for what: a bill for placing an ad is advertising; a bill from the person managing your property is a management fee, even when the work they did that month was finding a tenant.
What to keep
Keep detailed records of the rental income you earn and the expenses you incur, supported by invoices, receipts, contracts, and other supporting documents.
Don't send them in with your return — keep them in case the Canada Revenue Agency (CRA) asks to see them. The CRA may not allow an expense you can't support with a document. Generally, keep your records for six years from the end of the tax year they relate to.
Official CRA sources
Source: Canada Revenue Agency (canada.ca). Not tax advice.