TLDR: can I still claim 40% of all of these expenses (screenshot from simpletax) on my taxes when renting a portion of my Principal Residence and it still be considered principal residence? and without it incurring any recapture on sale (as far as i understand recapture is only for Capital Cost Allowance, which I am not doing)

INFO (this is in Ontario, Canada): I'm pretty sure I can still claim my personal residence as my Principal Residence, I'm renting ~40% of the space for ~1/3rd of the costs and still live there with my family full-time, so I think it would only be "incidental income" not "owned primarily for generating income" (see: https://nesbittburns.bmo.com/getimage.asp?content_id=77656).

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  • 2
    The BMO guide that you linked is confusing to me. Your house qualifies as a principal residence according to page 2, which comports with common sense. But then, on page 5, there is a much stricter definition, (for a different context? I don't know), where your house seems to be disqualified based on this point: "Your rental or business use of the property is relatively small in relation to its use as your principal residence." In my view, 40% is not relatively small compared to 60%. Jul 26 at 20:47
  • That's where I'm confused...what is used to define "relatively" ... Size-wise, it's not relatively small, but it's not as nice of an apartment, it's in a basement, etc... The part I live in is much "larger" than the rented part when it comes to quality/value... so should I just change the percentages to be based on "quality/value" rather than space? @OrangeCoast-reinstateMonica
    – tsdexter
    Jul 27 at 14:29

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