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I built a home and am renting it out for profit. While building, I incurred soft costs (mainly interest costs on money borrowed during construction, and insurance costs). In the years that I had these costs (2015 and 2016) I did not make any profit on my rental as it was still under construction so I could not deduct these costs.

Can these soft costs be carried forward and deducted against income made in following years, 2017 for example? Or do these soft costs get turned into capital costs that I can only deduct via Capital Cost Allowance?

  • I don't have time for a small answer, but just note that "I did not make any profit on my rental as it was still under construction so I could not deduct these costs." is not necessarily accurate. Losses on rental property can sometimes be claimed in Canada, which is often confused by the rule that losses cannot be increased by use of CCA. – Grade 'Eh' Bacon Feb 13 '18 at 21:10

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