OSFI leaves mortgage stress test in place, reaffirms LTI limits for lenders + MORE Jan 29th

A client of mine told me (Ontario) that his girlfriend moved in and is paying $1,000 per month towards household costs. They won’t be common-law for 3 years in Ontario. Would this count as tax free?—Hans

There are a few considerations here for your client, Hans. I will break them down. 

Rental income

When you earn rental income, you report it on your personal tax return on Form T776 Statement of Real Estate Rentals. You can claim rental expenses to reduce your taxable rental income. Common expenses include:

Advertising

Insurance

Mortgage interest

Legal and accounting fees

Management fees

Condo fees

Repairs and maintenance

Property taxes

Utilities

This list is not exhaustive, and repairs and maintenance can be complicated because some expenses that are more lasting in nature—like a renovation—may be capital expenses that must be depreciated over time.

Rental losses

If you have more expenses than income, you can have a rental loss…

OSFI releases its quarterly update Thursday, with some analysts expecting at least some direction on the future of the stress test.

U.S. mortgage rates climbed for the first time in four weeks, halting an early-year upswing in home purchase and refinancing activity.

OSFI offered no new direction on the qualifying rate, but reiterated that loan-to-income caps for uninsured mortgages remain in place and opened a new six-month consultation tied to its broader guidance review.

Mortgage insurer posts solid underwriting results and strong capital levels, even as lower investment income weighs on profits.