Renting out part of your home

When the split applies

A personal-use split applies when you use part of your rental property yourself. Examples include a basement suite in your home, a duplex where you live in one unit, or a room you rent out. Bills for the whole property, such as insurance and property tax, include both rental and personal costs. The personal portion is excluded from rental expenses.

Working out the percentage

The percentage needs a reasonable basis. Common methods use the floor area you occupy compared with the total area, or the number of rooms when they are similar in size. A floor plan, measurements, or a room count can show how the percentage was calculated.

Shared rooms need to be considered too. A kitchen or bathroom used by both households has both personal and rental use. Your records can explain how that shared use is included in the percentage.

On the T776 form

Part 4 starts with each expense for the whole property. Line 9949, total for personal portion, records the personal amount removed from those expenses. For example, with 40% personal use and a $2,000 insurance expense, the personal portion is $800 and the remaining rental expense is $1,200.

Rent and co-ownership

Rent you collected. The personal-use share is about expenses. Gross rents on line 8141 are the rent paid by tenants. The personal-use percentage does not reduce that income.

Your share as a co-owner. If you own the property with someone else, the form applies your ownership percentage once, to line 9369 — net income (loss) before adjustments — after the personal portion has been removed from expenses. Each expense line still shows the whole property’s figures.

One percentage, every line

This tool and the tracker apply one property-level percentage to every expense category, then total the personal portion for line 9949. They do not support a different percentage for an individual expense or a change during the year. An expense entirely for the rented area may need different treatment; that case is outside this calculation.