If you rent out a room or a floor in your home, or the other half of your duplex, you may deduct certain expenses connected with earning that rental income.

These expenses may include the portion of property taxes, mortgage interest, repairs and maintenance, insurance, light, heat, and water that relate to the rental space.

You may not deduct any mortgage principal payments, or costs of construction, renovation or alteration that are capital in nature. But you may claim depreciation on the rented portion of your home. Keep in mind, however, that this could affect your ability to claim the principal residence exemption on a future sale of your home.

Seek the advice of a Chartered Accountant when considering deducting depreciation and other amounts involved in home rentals.

Information for Tax Tips is provided as a public service by the Chartered Accountants of British Columbia.