tax bracket

[Freestuffrighthere]

Do you know how owning a rental property will affect my tax bracket? Or do you know where I can find out more information about it?

[secheltsaver]

In B.C. you can deduct certain costs from the rental income-property tax,insurance(structure)utilities,interest paid on mortgage(but not principle or down payment)and materials for maintenance and repairs.You cannot "pay"yourself to do repairs or maintenance,but can deduct the cost of professional tradespeople(get a receipt,always).Major repairs like a roof or furnace replacement have to be amortized over the expected life time of the replacement,say 1/20th of cost for a roof or something like that-I never had to do this,so am a little unclear. Any profit you earn after that will be declared as taxable income.This will only have major impact on your tax bracket if the amount is high enough to bump you into the next level.If you own the property outright,of course your deductions will be much less,and you'll be out the initial cost.It's actually better to have a generous slush fund available in case of lost revenue or repairs,and a higher financed amount in some respects.My ex-boy friends family are real estate developers/landlords and they always took that route.

[blueeyetea]

You can check out this calculator to figure it out.

[Ciel]

From the CRA website, for sole proprietors or partnerships (rental income):
http://www.cra-arc.gc.ca/tx/bsnss/tp.../menu-eng.html

As to how municipal taxes can affect your property-what services/infrastructure/zoning apply to your property? You can see if your municipal assessment office has a tax calculator on its website and you can also look up other properties in the same neighbourhood to see what taxes apply to the other properties.

[freefreefree]

interesting post. I learn something new today.

[lucy16076]

Your rental income is just that...income You add it into your income & as stated above, it just might affect your tax level by bumping you up to the next level of taxable income. Try to find a lot of deductions to bring that income profit down as far as you can!

[brunt]

"Tax bracket" is an overly used phrase. Don't worry about your bracket, worry about your taxes.

Your question, as asked, is impossible to answer. It all depends on the profitability of your rental. If you are profitable, you will pay taxes on the net income at your marginal rate. If you lose money, in all likelihood, you will not have to pay any taxes (not a surprise, you didn't make any money), but you probably will not be able to write your losses off any income other than profits from other rental properties.

Don't worry about the taxes - worry if the returns that you expect warrant the purchase of the property, the ongoing expenses and your time. It is easy to underestimate any of these. Be thorough with your work.