Rental Property ROI Calculator for Ontario

Property details

Purchase price

Down payment

Mortgage rate

Amortization period

yrs

Income and expenses

Expected monthly rent

Annual property taxes

Annual insurance

Include property management fee

Tax settings Sources: CRA T776, T4002, T4037

Your marginal tax rate

Verify at Canada.ca — Tax rates and income brackets for individuals

Building value (% of purchase price)

Land is not depreciable. Check your municipal assessment.

Claim CCA depreciation

Class 1 at 4% declining balance. Half-year rule applies in year 1.

Multi-year projection

Hold period

yrs

Annual rent increase

Annual appreciation

Year 1 results (pre-tax)

Monthly mortgage payment

Monthly cash flow

Annual cash flow

Cap rate

Cash-on-cash return

Year 1 results (after tax)

After-tax monthly cash flow

After-tax annual cash flow

After-tax cash-on-cash return

Income tax on rental income

CCA deduction year 1

Analysis

Multi-year projection

Year	Property value	Annual rent	Interest	CCA	Tax	Pre-tax CF	After-tax CF	Cumulative CF	Mortgage bal.

Sale analysis at end of hold period

Projected sale price-

Capital gain-

Capital gains tax (50% inclusion)-

CCA recapture tax-

Total tax on sale-

Equity at sale-

Net equity after sale tax-

Cumulative after-tax cash flow-

Total return after tax-

Results are estimates for planning and educational purposes only, not financial or tax advice. Tax formulas sourced from CRA T776, T4002 and T4037. Vacancy, maintenance and closing costs not included. Consult a qualified Canadian accountant before making investment decisions.

Investing in Ontario rental property

Land transfer tax Applies

Ontario charges a provincial Land Transfer Tax on all real estate purchases, calculated on a sliding scale based on the purchase price. The City of Toronto also charges a separate Municipal Land Transfer Tax, meaning buyers in Toronto pay land transfer tax twice. First-time buyers of a principal residence may qualify for a rebate, but this rebate does not apply to investment properties.

Rent control Partial

Ontario's rent increase guideline applies to units that were first rented for residential purposes before November 15, 2018. Units first occupied after that date are exempt from rent control. The annual guideline for controlled units is announced by the province each year. Verify the current guideline with the Ontario Landlord and Tenant Board before issuing any rent increase notice.

Legislation and disputes

Ontario landlord-tenant relationships are governed by the Residential Tenancies Act, 2006. The Landlord and Tenant Board (LTB) at tribunalsontario.ca/ltb hears applications and adjudicates disputes. For current rules on notices, eviction procedures, rent increases and maintenance obligations, the LTB website is the authoritative source.

Common questions about Ontario rental property

Is rent control being removed for new buildings in Ontario?

Since November 15, 2018, new residential units first occupied for residential purposes are exempt from Ontario's rent increase guideline. Landlords of newer buildings can raise rents without being bound by the annual guideline but must still provide proper written notice and can only increase once every 12 months for the same tenant. Verify the first-occupancy date of any unit you are buying, as this determines whether rent control applies.

What is land transfer tax in Ontario and how much does it cost?

Ontario's Land Transfer Tax is calculated on a sliding scale based on the purchase price. Toronto buyers pay a second layer of Municipal Land Transfer Tax on top of the provincial amount. Current rates and brackets are published by the Ontario Ministry of Finance and the City of Toronto. Always confirm current rates before finalizing your purchase budget.

Is positive cash flow realistic in Ontario rental properties?

In the Greater Toronto Area, positive cash flow on a residential rental property is difficult to achieve at current price levels and interest rates. Many Ontario investors accept negative monthly cash flow with an expectation of long-term appreciation. Markets like Ottawa, Hamilton and smaller Ontario cities generally offer better cash-flow potential. Run the numbers with this calculator before making an offer.

What legislation governs landlords and tenants in Ontario?

The Residential Tenancies Act, 2006 governs most residential rental relationships in Ontario. The Landlord and Tenant Board (LTB) at tribunalsontario.ca/ltb is the adjudicating body for disputes. Ontario landlords should read the Act before renting out any property.

Analyze any Ontario property

Return to the main calculator for the full experience or explore our guides for Canadian real estate investors.

Main calculator New landlord checklist

This page is for informational purposes only and does not constitute financial, tax or legal advice. Rules, rates and legislation vary and change. Verify current rules with the Ontario Landlord and Tenant Board and consult a qualified advisor before making investment decisions.