Leasing costs – Motor vehicles used for rental income
You can deduct amounts you paid to lease a motor vehicle or a zero-emission vehicle you used to earn rental income. Include the leasing costs you paid when you calculate your allowable motor vehicle expenses.
If you use a passenger vehicle or a zero-emission passenger vehicle to earn rental income, there is a limit on the amount of the leasing costs you can deduct. For more information, go to Chart to calculate eligible leasing costs for passenger vehicles.
If the lease agreement for your passenger vehicle includes items such as insurance, maintenance and taxes, include them as part of the lease charges on line 1 when you complete the applicable chart.
Note
Most leases do not include items such as insurance and maintenance. You have to pay these amounts separately. List these expenses under "Line 9281 – Motor vehicle expenses." Do not include them on line 1 when you complete the applicable chart.
Repayments and imputed interest
When you lease a passenger vehicle, you may have a repayment owing to you, or you may have imputed interest. If so, you cannot use the preceding leasing chart. Instead, contact the Canada Revenue Agency.
Imputed interest is interest that would be owing to you if you were paid interest on money you deposited to lease a passenger vehicle. Calculate imputed interest for leasing costs on a passenger vehicle only if all of the following apply:
- one or more deposits were made for the leased passenger vehicle
- one or more deposits are refundable
- the total of the deposits is more than $1,000