Insuring a rental property is a cost of earning the rent, and the premiums come off your rental income. On Form T776, they go on line 8690, Insurance.
One thing decides how much you claim this year: what period the premium covers.
What belongs here
The premiums you pay to insure your rental property for the current year.
The multi-year policy
If your policy gives coverage for more than one year, deduct only the premiums related to the current year. Deduct the rest in the year or years they relate to.
This catches people out because the payment and the coverage don't line up. Paying three years up front doesn't make it a three-year deduction now — the premium is split across the years the policy protects you for.
So keep the policy, not just the payment. The coverage dates are what the split is worked out from, and they're printed on the policy rather than on the receipt.
What does not belong here
Insurance on a vehicle you use for the rental isn't a property insurance cost. It's part of your motor vehicle expenses on line 9281 — and those have conditions of their own about when you can claim anything at all.
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. For this line:
- the policy or the renewal declaration, showing the coverage period
- the premium notice or receipt showing what you paid and when
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.