Can I claim home or tenant insurance on my taxes? A guide for landlords and renters

Living in Canada is expensive, and tax season is one of the few opportunities to get some financial relief in the form of tax credits. These credits reduce your taxable income and help you keep more of your hard-earned money in your pocket. 

At this time of year, many landlords and tenants start wondering: Can I deduct home insurance or tenant insurance from my taxes? 

The answer depends on whether you're a landlord or a tenant, and even then, there are specific rules for each situation.

Let’s break down what’s deductible, what’s not, and how to claim eligible deductions on your tax return.

Rental property tax deductions for landlords

There are several tax advantages that come along with owning a rental property, including the ability to deduct certain rental property expenses from your rental income. This can help lower your taxable income and reduce what you owe at tax time. Here’s what you can (and can’t) deduct when claiming expenses on rental properties.

Home insurance premiums on rental properties

If you own a rental property in Canada, you can deduct the cost of insurance premiums related to your rental unit. According to the Canada Revenue Agency (CRA), this includes rental property insurance on the building and any included contents (like appliances or furnishings if you're providing a furnished unit).

Mortgage interest on investment property tax deductions

As a landlord, you can also deduct the interest portion of your mortgage payments but not the principal. This is because the principal is considered a capital investment, while the interest is an ongoing expense tied to your rental income. You can also claim interest paid out to tenants on their rental deposits. 

Property taxes on rental properties in Canada

Any property taxes you pay on your rental unit can be deducted as a rental property tax benefit. Just make sure to only claim the portion that applies to the rented space, especially if you live in another part of the home.

Utilities covered by landlords

Some landlords include the cost of hydro, water, or heating in the monthly rent. If this applies to you, these utilities are considered rental expenses, and you can deduct them from your rental income. However, if your tenant pays for their own utilities directly, you cannot claim them.

Repairs and maintenance on rental properties

Landlords can deduct the cost of materials and labour for small repairs and maintenance on a rental unit, like fixing a leaky faucet or painting the walls. However, if you do the work yourself, you can’t deduct the value of your own labour.

It’s important to note that expenses for major renovations s (e.g. builders risk insurance) or upgrades that increase the property’s value can’t be deducted as repairs. Instead, they fall under capital expenses, which you may be able to claim through the capital cost allowance.

What rental property expenses are not tax-deductible for landlords?

• The principal portion of a mortgage payment
• Large renovations (capital improvements)
• Manual labour (if you do repairs yourself, you can’t deduct the value of your time)
• Personal expenses unrelated to the rental property

Tenant insurance and rental tax benefits for renters

If you rent your home, you might be wondering whether you can claim your rent or renters insurance on your tax return. Here’s what you need to know about rental property tax benefits for renters.

Also read: How tenant insurance helps landlords and tenants lower their risk

Can renters claim rent payments on their tax return?

For most renters in Canada, rent is not tax-deductible. However, some provinces offer tax credits for tenants. For example:

• Ontario: Renters in Ontario may be eligible for The Ontario Trillium Benefit, which helps low- to moderate-income residents with property taxes and rent through the Ontario Energy and Property Tax Credit (OEPTC). Eligibility depends on factors like income, age, and living situation, and payments are made monthly or as a lump sum at tax time. To apply, file your tax return and complete the ON-BEN application.
• Manitoba: Renters in Manitoba may qualify for the Residential Renters Tax Credit, which could save them up to $525 per year (plus a top-up amount for seniors). 
• Quebec: Quebec renters may qualify for the Solidarity Tax Credit, which is calculated based on three components –– housing, QST, and living in Northern villages.

To see if you qualify, check with your province’s tax authority or review available tax credits when filing your return.

Is tenant insurance tax-deductible?

Unlike home insurance for landlords, tenant insurance is not tax-deductible for most renters. The only exception is if you use part of your home for work. 

If you’re self-employed or a remote employee with a designated workspace, you may be able to deduct part of your tenant insurance as a business expense.

Claiming home office expenses as a renter

If you work from home, you may be able to deduct a portion of your rent and utilities as a home office expense. This applies to:

• Self-employed individuals who use part of their home exclusively for work.
• Employees who are required to work from home by their employer.

Commission-based employees can also claim portions of their tenant insurance and property taxes. To claim these deductions, you’ll need a completed T2200S form from your employer.

How to claim eligible insurance on your tax return

If you qualify for insurance-related tax deductions, follow these steps to claim them correctly:

1. Keep receipts and records – Whether you’re a landlord or a self-employed renter, save your insurance statements, rent receipts, utility costs, property tax slips, and any other relevant invoices.
2. Use the correct tax form – Landlords must report rental income and claim deductions using Form T776 (Statement of Real Estate Rentals). Self-employed renters report home office expenses on Form T2125 (Statement of Business or Professional Activities).
3. Separate your personal and rental expenses – If your rental property is part of the home you live in, be sure to claim only the portion of expenses that apply to the rental unit.
4. Consult a tax professional – If you’re unsure about your eligibility, a tax expert can help ensure you maximize your deductions without making errors.

The bottom line on rental property tax deductions

Rental property owners can deduct many expenses, including home insurance. Tenants, unfortunately, have fewer options. Rent isn’t deductible for most people, but self-employed renters may be able to claim part of their tenant insurance as a business expense.

When tax season rolls around, keeping detailed records and understanding what you can claim can help maximize your tax return. And if you’re not sure? A tax professional can help you navigate the process with confidence.

For information about insurance and taxes visit our insurance tax guide. 

Also read:

• Is home insurance deductible in Canada?
• Is business insurance tax deductible in Canada?
• How to use life insurance for tax and estate planning
• Is life insurance tax deductible?