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Property

Income Tax Act s. 248(1)

The wording of the definition of "property" in the Income Tax Act was revised, but the revision was not intended to change the application of the definition.  The definition of property is (words in italics were added by legislative change):

“property” means property of any kind whatever whether real or personal, immovable or movable, tangible or intangible, or corporeal or incorporeal and, without restricting the generality of the foregoing, includes

1. a right of any kind whatever, a share or a chose in action,
2. unless a contrary intention is evident, money,
3. a timber resource property,
4. the work in progress of a business that is a profession; and
5. the goodwill of a business, as referred to in subsection 13(34)

Paragraph (e) was added by Bill C-29 Budget Implementation Act, 2016, No. 2, and came into force (became effective) January 1, 2017.

Investment Income

Investment income, other than capital gains, is considered property income.  What would normally be classed as capital gains can be considered to be business income.

Rental Income

Rental income can be considered property income, but rental income can also be classed as business income.

Taxation of Property Income/Loss

When a loss from property exceeds income from other sources and cannot be deducted on the current year tax return, it becomes a non-capital loss, and can be carried back to the previous 3 taxation years, or forward up to 20 taxation years.

Change in Use of Property

When the use of property changes from income-producing to non-income-producing (i.e., personal use) or when it changes from personal use (non-income-producing) to income-producing, there is a deemed disposal of the property.  Regarding real estate properties, see Change in Use of Real Estate.  These rules apply to rental properties and principal residences, as well as 2nd homes that are not income-producing.

Revised: October 26, 2023

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