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Info:

  • the condo is a townhouse - not in a building.
  • the condo fees are >$500/month ($6000/year)
  • there are not many common areas
  • the condo fees cover items such as ALL exterior maintenance (roof, windows, doors, garage doors, exterior brick/foundation, eaves cleaning, window cleaning, lawn care, snow removal, garbage collection, etc) as well as insurance for everything from outwards from the studs.

I'm thinking that basically all of those items would fall under either "cleaning materials", "insurance", and "routine maintenance and incidental repairs" stated here: https://turbotax.intuit.ca/tips/run-a-business-out-of-your-home-what-can-you-claim-2-5713

These are mandatory fees that I have to pay in order to have my house/home office and if I didn't pay them in fees, I'd still have to pay for all of those things separately and include them. So can I deduct the business use portion of them?

EDIT: to be clear, none of the major replacements (roof, windows, doors) covered by this, imo, would be consider capital as they are never to improve, always just to get back to original, ie: worn/broken/leaky shingle roof replaced with shingle roof, dirty leaky windows replaced with new base model windows, doors replaced with similar model newer doors, etc. If we want improvements (ie: I am adding an egress basement window) we have to do them ourselves and then forever assume the cost of repair/replacement/insurance for that window.

  • In U.S. tax law, only a certain physical percentage of the residence is used for business. Then that percentage applies to all expenses to divide between personal expenses and business expenses. – S Spring Aug 30 at 21:54
  • same here, my office/conference room took up entire basement, so it was about 25% ... but only certain expenses count - for example, if I build a 2000sqft addition, I can't deduct 25% of the cost because it's a capital expense not a current expense.... So is condo fees that cover mostly maintenance/cleaning/insurance count as current or capital or neither – tsdexter Aug 31 at 0:58
  • I think a condo fee is maintenance. I think the condo fee is maintenance even if it includes utilities and property taxes. The condo fee could be compared to a special assessment. – S Spring Aug 31 at 4:45
  • @SSpring thanks - I do as well, just worried it's going to red flag for audit if I consistently deduct 25% of ~$6000/yr for maintenance – tsdexter Aug 31 at 17:26
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Generally, probably yes, to the extent of the proportion of the residence which is used for business purposes on a time basis as the dividend of the total amount of the expense.

There's a whole bunch of rules, which are only briefly touched on in the intuit article, which govern what you can do and which govern the consequences of them.

The biggies are:

Using it on a regular and ongoing basis to meet your clients, customers, or patients

The capital gain and recapture rules will apply if you deduct capital cost allowance on the business use part of your home and you later sell your home.

These are not terribly difficult to for the layman to understand articles which you might want to read. They seem to be aimed at sole proprietorships and having a corporation as a business vehicle might affect things.

https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-4-businesses/series-4-businesses-folio-2-deducting-business-expenses/income-tax-folio-s4-f2-c2-business-use-home-expenses.html

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/completing-form-t2125/business-use-home-expenses.html

This might also apply to you.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-229-other-employment-expenses/commission-employees/work-space-home-expenses.html

This answer has a link to an interpretation bulletin (514 I think) but the link is no longer valid and I could not find a new one, unfortunately.

In Canada, can I deduct my mortgage if running a business from my home?

Here's some more stuff. Entering relevant search terms in your favourite search engine will produce lots more.

http://realestatetaxtips.ca/can-deducting-home-office-expense-affect-principal-residence-exemption/

https://business.financialpost.com/personal-finance/taxes/what-you-need-to-know-about-claiming-the-principal-residence-exemption-on-the-sale-of-property

https://business.financialpost.com/personal-finance/taxes/your-personal-business-better-be-real-if-you-are-using-it-to-claim-expenses-for-tax-purposes

Another thing you might need to consider is whether your condominium's rules allow for running businesses, which would put paid to the scheme.

  • thanks for the well thought out response - i'll be sure to check out the links! – tsdexter Sep 26 at 4:11

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