Two kinds of expenses
The Canada Revenue Agency separates two kinds of expenses for a rental property.
- A current expense restores the property to its original condition. It comes back after a shorter or longer period. It is deducted from the year's rental income.
- A capital expense provides a lasting benefit or improves the property beyond its original condition. It is not deducted all at once. It is added to the cost of the property and depreciated.
How your roofing work is classified changes when your taxes go down. Settle this question at the same time as the roofing grants, before you sign.
The questions the Agency asks
The Agency offers a series of questions to classify an expense.
- Does the expense provide a lasting benefit? If so, it is generally a capital expense.
- Is it for maintenance or improvement? Restoring a property to its original condition is normally a current expense. Improving it beyond that condition is probably a capital expense.
- Is it for a part of the property or a separate asset? Repairing a property by replacing one of its parts is usually a current expense.
- What is its value compared to the property? An amount that is very high compared to the property's value points to capital. The Agency states that this test is not decisive on its own.
The Agency adds a useful case. If you spend a large amount at once on repairs that should have been done earlier, you can deduct them as current expenses.
What about the roof
The Agency's page gives no roofing example. Its examples are wood siding replaced with vinyl, which is a capital expense, and wiring replaced without improvement, which is usually a current expense.
A roof redone the same as before and a roof redone with a better material, more insulation or corrected slopes may not be classified the same way. That is not for us to decide. Show our quote to your accountant. The details of the work help them decide.
Two special cases
- A building bought in poor condition. The Agency treats repairs made to restore a used property you just acquired as a capital expense.
- Work done to sell. Repairs made in anticipation of a sale, or as a condition of sale, are treated as capital expenses.
What to keep
Keep the quote, the contract, the invoices and proof of payment. The Agency refers to Guide T4036, Rental Income, and to form T776, Statement of Real Estate Rentals.
If you receive a grant for this work, tell your accountant about it too. The page consulted does not say how it is treated.
Frequently asked questions
Is a roof replacement tax deductible?
For a rental building, yes, one way or another. A current expense is deducted the same year, and a capital expense is depreciated over several years. The nature of the work decides.
Is roofing work on a principal residence deductible?
The Agency page consulted here covers rental income and provides no deduction for the home you live in. Check with the Canada Revenue Agency, Revenu Québec or an accountant whether a credit applies to your situation.
How do I report roofing work on my taxes?
For a rental building, the expenses are reported with your rental income, on form T776 at the federal level. Classifying them as current or capital comes first. An accountant will also tell you what Revenu Québec requires on its side.
Official sources, consulted October 3, 2026: