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Plex Owner in Montreal: Tax Deductions You Cannot Afford to Miss

Duplex, triplex, quadruplex — here's how to legally reduce your tax on rental income.

February 2026

You own a plex in Montreal — perhaps in the Plateau-Mont-Royal, Rosemont or Villeray — and you manage it yourself. You report your rental income every year. But are you really deducting everything you're entitled to? In most cases: no. 

Many property owners leave money on the table, either because they don't know certain expenses are deductible, or because they don't keep the right documentation. This guide covers everything — with concrete examples — and also tells you what is NOT deductible, because that's often where costly mistakes happen.

Bénoline Series — Rental Property Taxation in Québec

The Different Categories of Deductible Expenses

Here is an overview of the 10 categories of deductible expenses covered in this article:

# Category In Brief
1 Mortgage interest Often the largest deduction — rental portion only
2 Property and school taxes Municipal and school taxes, prorated if you live in the plex
3 Insurance premiums Building, liability, and rent protection coverage
4 Routine maintenance and repairs Immediate repairs (OPEX), not major renovations (CAPEX)
5 Management and administration fees Property management firm, concierge, snow removal, software
6 Accountant and legal fees Tax preparation, lease drafting, TAL representation
7 Electricity, heating, utilities Only what you pay on behalf of your tenants
8 Advertising and marketing Listings, pro photos, referencing services
9 Vehicle expenses Prorated based on km driven for property management
10 Capital Cost Allowance (CCA) Optional but powerful — classes 1, 6 and 8

1. Mortgage Interest

This is often the largest available deduction. The interest paid on your mortgage is fully deductible for the rental portion of your building.

  • Ask your bank or credit union for an annual interest statement (available in your online account).
  • Only interest is deductible — not the principal you repay.
  • If you live in your plex, deduct only the proportion of rented units — e.g., 2 rented units out of 3 = 66.7% of interest. For greater precision, use square footage (more defensible in an audit).
  • 💡 Bénoline tip: Fees and penalties related to mortgage refinancing may also be deductible — check with your accountant.

2. Municipal and School Taxes

The full amount of your municipal and school taxes is deductible, prorated to the rented portions if you live in the building.

Keep your annual assessment notice from the City and your school tax statement.

3. Insurance Premiums

Insurance costs related to rental operations are deductible. Make sure not to include coverage for your own unit if you live in the plex.

  • Building insurance (structure, common-area contents).
  • Landlord liability insurance.
  • Rent protection insurance (if applicable).

4. Routine Maintenance and Repairs

All expenses aimed at maintaining the building in its current condition are immediately deductible. However: once you improve rather than repair, you shift into CAPEX (capital expenditure) territory — which changes everything for your tax return.

Deductible Now (OPEX) To Depreciate Over Several Years (CAPEX)
Touch-up painting Full kitchen or bathroom renovation
Faucet repair Full plumbing replacement
A few damaged shingles Complete roof replacement
Furnace maintenance (filter) Furnace replacement
Professional cleaning Full window replacement


👉 To understand this distinction fully:
CAPEX or OPEX: What's the difference for your plex or rental cottage?

5. Management and Administration Fees

All fees paid for managing your building are deductible: property management firm, concierge, snow removal, maintenance of common areas.

  • Monthly property management fees.
  • Concierge or common-area cleaning fees.
  • Snow removal, hedge trimming, grounds maintenance.
  • Property management software fees.
  • Rent collection or lease management fees.

6. Accountant and Legal Fees

Professional fees directly related to your rental activity are deductible.

  • Fees for preparing T776 (federal) and TP-128 (provincial) forms.
  • Legal fees for drafting leases, formal notices, representation before the TAL (Tribunal administratif du logement).

📌 Note: notary fees at purchase are not annually deductible — they are added to the capital cost.

👉 For everything on your rights and obligations toward tenants: Landlord Rights and Obligations in Quebec.

7. Electricity, Heating and Utilities

If you pay electricity, heating or water for your tenants (included in rent), these expenses are deductible.

  • Electricity for common areas.
  • Heating provided by the landlord.
  • Internet or cable included in a furnished unit.

Only deduct what you actually pay. If your tenants pay their own Hydro-Québec bill, that's not your expense to deduct.

8. Advertising and Marketing

Your expenses to find tenants are fully deductible.

  • Listings on Kijiji, Facebook Marketplace, rental platforms.
  • Professional photos of your units.
  • Referral services or listing management.

9. Vehicle Expenses

If you use your vehicle to manage your plex (inspections, supervising work, picking up supplies), you can deduct expenses proportional to kilometers driven for rental purposes.

  • Keep a mileage log: date, destination, purpose, kilometers.
  • Deduct the % corresponding to property management (gas, insurance, maintenance, auto loan interest).

10. CCA (Capital Cost Allowance) — Optional but Powerful

The CCA (Capital Cost Allowance) lets you progressively recover the cost of your building and its equipment, year after year. It's optional — but if you're not planning to sell soon, not claiming it means leaving money on the table.

  • Class 1 (4%/year): concrete, brick or stucco buildings
  • Class 6 (10%/year): wood-frame buildings
  • Class 8 (20%/year): furniture, appliances, equipment
  • Half-rate rule in the first year

⚠️ Watch out for recapture of depreciation on sale — plan ahead with an accountant

  • 💡 Example: A triplex with a building value of $500,000. Maximum CCA in year one: $500,000 × 4% × 50% = $10,000 deduction. At a 50% marginal tax rate, that's $5,000 in tax savings.

What Is NOT Deductible

  • Mortgage principal repayment (only interest)
  • Municipal fines — e.g., citation for non-compliant rental = not deductible
  • Your own time (unpaid labour)
  • Personal expenses related to your own unit in the plex
  • CAPEX (major renovations) — except through CCA depreciation
  • The welcome tax (transfer tax) — it is added to the capital cost
  • Fines and penalties

Government grants received: impact on your CAPEX

If you received a grant for work done — RénoPlex, Rénoclimat, Hydro-Québec, or municipal subsidy programs — that amount must be subtracted from the capital cost of your project (CAPEX). It is not declared as income, but it reduces the base on which you calculate your CCA.

  • 💡 Example: Roof replacement at $20,000 with a $4,000 RénoPlex grant. The actual CAPEX to depreciate is $16,000 — not $20,000. Not accounting for the grant means overstating your deduction.

Conclusion

Plex taxation is a mechanism that can be mastered. Keep all your receipts, clearly separate personal from rental expenses, and maintain your records throughout the year.

📌Concrete action: create a digital folder with a subfolder for each expense category (taxes, insurance, maintenance, management, etc.) and update it once a month. Your accountant will thank you in March.

👉 To complete your knowledge: How to report your rental income.

👉 Good to Know for Property Owners

  • Mortgage interest: fully deductible for the rental portion — not principal repayment.
  • Operating expenses: taxes, insurance, management and routine maintenance are fully deductible.
  • Major renovations (CAPEX): must be depreciated through CCA over several years — not deducted in full the same year.
  • Personal use: if you live in your plex, prorate all shared expenses according to the rented portion.
  • Keep receipts 6 years: the CRA can audit retroactively.

👉 FAQ About Plex Tax Deductions

Q: Can I deduct all my renovations in the same year?

A: No. Major renovations (CAPEX) must be depreciated through CCA over several years. Only routine repairs (OPEX) are immediately deductible. The distinction is crucial — consult an accountant if in doubt.

Q: Can I deduct my own labour if I do the repairs myself?

A: No. Only amounts actually paid to a third party are deductible. Your personal time cannot be claimed as an expense, even if you invoice a nominal amount.

Q: How do I prorate expenses if I live in my plex?

A: Divide by the number of rented units over the total. E.g., you live in a triplex with 2 units rented: 2/3 = 66.7% of all shared expenses are deductible. For greater accuracy, use square footage instead.

Q: Are Airbnb fees deductible?

A: Yes, 100%. Airbnb commissions are considered marketing costs, fully deductible against your rental income.

This blog content is for informational purposes only. It draws on the Civil Code of Québec and the Tribunal administratif du logement Act, as well as guidelines from Revenu Québec, the CRA and the CITQ. Laws change — consult a qualified professional (accountant, lawyer or tax advisor) before making any tax or legal decision. For any update or correction, contact us!

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