Bookkeeping for rental properties and holding companies
Rental property held through a corporation needs books kept property by property. We track income and expenses property by property, keep capital improvements separate from repairs, and do the year-end preparation for handoff to your CPA.
What makes property books different
Rent comes in and expenses go out, but the tax treatment has more to it. Improvements have to be separated from repairs, mortgage payments split into interest and principal, and each property tracked on its own so its results are clear.
Holding property in a corporation brings its own items: shareholder loans, how rental income is taxed inside the company, and annual declarations like BC's Speculation and Vacancy Tax. Clean, property-by-property records make each of those straightforward at year end.
What makes these books different
Per-property tracking
Rent, strata fees, property tax, insurance, and mortgage interest recorded against the property they belong to, so each one's return is visible.
Capital vs. repairs
A new roof and a patched roof are treated very differently for tax. Capital improvements are depreciated over time; repairs are generally deducted in the year.
Shareholder loans
Personal money going in and corporate money coming out is tracked through the shareholder loan account. Balances left unresolved can create unexpected personal tax.
Security deposits
Tenant deposits recorded as liabilities, not income — they belong to the tenant until the tenancy ends.
How we set up your books
One tracking class per property
Income and expenses recorded against each property separately.
Mortgage payments split
Each payment divided into interest, an expense, and principal, which reduces the loan.
A capital asset register
Improvements recorded as assets, ready for capital cost allowance.
Shareholder loan account
Money moving between you and the company recorded as it happens.
Compliance we keep on top of
The small business deduction
Rental income earned by a corporation is often income from a specified investment business, which generally isn't eligible for the small business deduction unless the company has more than five full-time employees. That changes how much tax to set aside.
GST on rent
Long-term residential rent is generally GST-exempt, while commercial rent is usually taxable. Mixed-use buildings and short-term rentals need a closer look.
Property declarations
BC's Speculation and Vacancy Tax and, in Vancouver, the Empty Homes Tax require annual declarations from many owners. We keep occupancy and rental records organized so declarations are quick to complete.
Services for this industry
Common questions
Should my rental properties be held in a corporation?
That's a question for a CPA or tax lawyer — it depends on your income, financing, and long-term plans. If you already hold property in a corporation, or decide to, we keep the books that make it work.
Is mortgage principal a deductible expense?
No. Interest on a mortgage used to earn rental income is generally deductible, but principal repayments reduce the loan balance rather than counting as an expense — so each payment needs to be split between the two.
Are short-term rentals treated differently?
Often, yes. Short-term accommodation can be subject to GST, BC PST, and the Municipal and Regional District Tax, while long-term residential rent is generally GST-exempt. Platform payouts also need to be reconciled to bookings, net of fees.
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