Net income, not gross rent
Rental income in Canada is taxed on the net: what is left after deductible expenses. The landlords who overpay rarely claim something forbidden, they fail to claim ordinary costs because the records were never kept. This estimator sums your operating expenses and deductible mortgage interest against gross rent to show the net figure that goes on Form T776, then applies your marginal rate.
Interest yes, principal no
The single most common mistake is deducting the whole mortgage payment. Only the interest portion is deductible; the principal builds your equity and is not a cost of earning income. Enter the year's interest, not the total payments. Capital cost allowance is left out on purpose, because claiming it can trigger recapture when you sell, a decision worth an accountant's input.
Records make the deductions
A deduction you cannot support is a deduction you can lose. Keeping rent, expenses, and receipts connected through the year, rather than reconstructed each spring, is what turns tax season into an export. See how Habyn handles rent tracking and document storage, and read our guide to rental property tax deductions in Canada.