A rental changes three things in your forecast: how much the plan draws from your accounts, how much tax you pay, and what your accounts hold. How it does that depends on who owns the property — you, your company, or both together. This page sets out each case.

Two figures for every rental

The forecast works out two different numbers for each rental, each year, in today's dollars.

• Cash — rent after vacancy, less every running cost, less the whole mortgage payment. This is what the rental leaves in hand.
• Taxable rent — rent after vacancy, less every running cost, less only the interest part of the mortgage payment. Repaying the mortgage costs cash but cannot be deducted, so this figure is higher than the cash while there is a mortgage.

Either figure can be below zero. With more than one owner, each figure is split by ownership share.

When rent starts counting

From the year the last person in your household retires. Before that the forecast does not know anyone's salary, so it cannot work out the tax on rent, and it assumes a rental that costs more than it brings in is paid for from money it does not track. Rent, costs and losses in those years are left out, for a rental you own and for one your company owns. One person on their own counts from their own retirement.

Rent stops in the year after a planned sale.

A rental you own personally

• What it does to withdrawals — the cash counts as income, beside CPP, OAS and any pension, so the plan draws less from your accounts to reach the same after-tax income.
• What it does to tax — the taxable rent is added to your other income for the year and taxed with it. It is not pension income, so it cannot be split with a spouse and earns no pension credit, and it counts toward the OAS clawback. Because taxable rent is usually more than the cash, a rental can add more to your tax than it adds to your pocket; withdrawals then fall by less than the rent.
• A year it costs more than it brings in — the shortfall adds to what the plan must fund, so more is drawn from your accounts. A loss on the taxable figure lowers the tax on your other income that year. It is not carried to another year.
• Rent a year does not need — when your income already covers the year's goal, the part of the extra that came from rent is, after tax, paid into the account you chose as the property's "Account for the proceeds". It is invested and drawn like the rest of that account, and taking it out later is not a gain. With no account chosen, the extra is simply income that year.

Where you see it

• Income & Taxes — a Rent column and chart band show the cash, per person. The tax on rent is inside the Tax column. A losing year shows below zero.
• Planning Workbook — rent is part of each year's Gross and After-Tax, as a pension is, with no column of its own. A year's saved rent is marked on the account it went to.
• Overview and the PDF report — the income figures include rent, and any rent saved is stated in a sentence under the tables.

A rental your company owns

The company's share of the rent never becomes your income directly. It is taxed in the company and stays in the company's account until the company pays you.

• Tax in the company — the company's taxable rent is taxed at the company's rate for investment income in your province. A year with no taxable rent has no company tax.
• What reaches the company's account — the cash less that tax, paid in each year. From then on it is invested and paid out like the rest of the account, and taking it out later is not a gain.
• The refundable part of the tax — part of a company's tax on rent comes back to the company when it pays you taxable dividends. The forecast returns it as dividends are paid and carries whatever is left to later years.
• When it reaches you — when the plan pays you from the company's account. Those payouts are taxed in your hands as any payout from the company is.
• A year the cash does not cover the company's tax and costs — the company's owners meet the shortfall. It lowers your income that year, with no tax relief, so the plan draws more to make it up.

Where you see it

• Planning Workbook — the company account's cell is marked in each year rent is paid in.
• Under the Planning Workbook and Income & Taxes, and in the PDF report — one sentence per company account gives the years and the total paid in after the company's tax.
• Income & Taxes — the Rent column stays empty for a company's rental in a year it pays its way; the rent shows up later, inside your withdrawals from the company. A short year shows as a figure below zero.

A rental you share with your company

Each owner's share is treated on its own, by the shares you entered under Ownership.

• Your share — counted as your income and taxed with the rest of your income, as for a rental you own.
• The company's share — taxed in the company, with what is left paid into the company's account, as for a rental your company owns.
• A losing year — your share of the loss lowers your income and your tax. The company's share is met by the company's owners, with no tax relief.
• A planned sale — the money is split the same way. The company's share, less the company's tax on its part of the gain, is paid into the company's own account. Your share is paid into the non-registered account you chose for the proceeds, and your part of the gain is taxed as yours.

The same rental, owned each way

An illustration with round numbers, not a forecast.

Rent after vacancy is $30,000. Running costs are $9,000. The mortgage payment is $18,000, of which $6,000 is interest.

• Cash — $30,000 − $9,000 − $18,000 = $3,000.
• Taxable rent — $30,000 − $9,000 − $6,000 = $15,000.
• Owned by you — $3,000 counts toward your income for the year, and $15,000 is added to your taxable income. If the tax on that $15,000 is more than $3,000, the rental costs you money that year even though it left cash in hand, and the plan draws the difference from your accounts.
• Owned by your company — the company is taxed on $15,000. If that tax is less than $3,000, the rest of the $3,000 is paid into the company's account. If it is more, the owners meet the difference that year. Part of the tax comes back to the company later, as it pays dividends.
• Shared half and half — $1,500 counts toward your income and $7,500 is added to your taxable income. The company is taxed on its $7,500, and what is left of its $1,500 after that tax is paid into the company's account.

As the mortgage is paid down the interest falls, and once it is paid off the cash and the taxable rent are the same figure.

What is not counted

• Rent before everyone is retired — left out, profit or loss, as described above. A profitable rental's savings in those years are not added to your accounts.
• Depreciation (capital cost allowance) — not deducted from rent, and not added back when the property is sold.
• A loss carried to another year — a rental loss counts only in the year it happens, for you and for a company.
• Rents and property prices moving with markets — rent and costs stay level in today's dollars, and each property grows at the one rate you set.

See also: Real estate → for entering a property and planning a sale, and Income & Taxes →.