Yes, if you rent out a property in Quebec, the insurance premiums you pay for that property are deductible expenses.
You can claim them against your rental income on your federal CRA return. You can also claim them on your provincial Revenu Québec return.
This applies to landlord insurance and rental property insurance. The rule is straightforward. The property must generate rental income. The premium for the home you live in is a personal cost, and the cost of protecting your personal property is not deductible.
What Does Deducting Home Insurance Actually Mean?
A tax deduction is an expense you are allowed to subtract from your income before tax is calculated. When you rent out a property, you report the rent you collect as rental income. You are then allowed to subtract the costs of earning that income.
This is not a loophole or a legal grey area. The Canada Revenue Agency and Revenu Québec both treat rental activity as a source of income. They allow the ordinary costs of running that activity to be claimed.
Why Is Rental Insurance Deductible When Personal Home Insurance Is Not?
The difference comes down to one question.
Is the property earning income, or is it a place you live?
Insurance on your own home is a personal expense. The Income Tax Act does not let you deduct personal living costs.
A rental property is different; it is run to earn income. The insurance that protects it is therefore a cost of earning, and the law allows that cost to be claimed. Section 9 of the Income Tax Act sets out that income from a business or property is the profit from it, and the deduction of reasonable expenses flows from that.
This is also why using the wrong insurance policy can cause two separate problems. If you rent out a property but keep a standard homeowner policy on it, a claim can be denied because the insurer was never told the property was tenanted.
Our guide on what landlord insurance covers in Quebec explains why the right policy matters in the first place.
What Insurance Costs Can a Quebec Landlord Deduct?
Landlord insurance and the cost of protecting a property that generates rental income are generally fully deductible. This includes the building coverage, liability coverage, and standard protections included in the policy. Additional endorsements added to the landlord policy are also deductible.
Loss-of-rental-income coverage is deductible as well. Mortgage default insurance, such as CMHC insurance, is handled differently. It is not deducted as a regular annual expense because it becomes part of the property’s cost.
4.1 Premiums Paid During the Year
The general rule is that you deduct the insurance premium in the year it applies to. If you pay a twelve-month premium that runs into the next tax year, you may need to split it. For most landlords paying a yearly premium that lines up with the calendar, this is straightforward.
4.2 Endorsements Are Part of the Premium
Add-on coverages such as sewer backup, overland flood, equipment breakdown, etc., are billed under the landlord policy premium. Because they protect the income-earning property, they are deductible along with the base premium.
4.3 The Quebec Insurance Premium Tax
Quebec applies a tax on private insurance premiums. It is 9% in 2026 and is scheduled to rise to 9.975% effective January 1, 2027. This tax is part of what you actually pay for the coverage, so it forms part of the deductible premium.
How Do You Claim the Deduction on Your Tax Return?
A Quebec landlord files in two places, and the rental insurance is claimed on both. On the federal return, rental income and expenses are reported on Form T776, the Statement of Real Estate Rentals. Insurance has its own dedicated line on this form. You enter the total premiums paid on the rental property, and that amount reduces your net rental income.
Insurance is again listed as an allowed expense. The federal and provincial systems run in parallel, so the same premium supports a claim on both returns. The premium you claim should equal the premium shown on your broker invoices and your bank or card statements. If you own the property with a spouse, the insurance is split according to the share of ownership.
How Do You Split the Deduction When You Live in Part of the Property?
Many Quebec owners live in one unit of a duplex or triplex and rent out the rest. This is one of the most common ownership types in Montreal, and it has a specific rule. You can only deduct the share of insurance that relates to the rented portion.
The usual method is to split by the number of units or by floor area. If you live in one unit of a triplex, you can rent out the other two units. A reasonable approach is to claim two-thirds of the building insurance as a rental expense.
The split has to be reasonable and you should be able to explain it. The CRA and Revenu Québec both accept a sensible method applied consistently year over year.
How Are Insurance Claim Payouts Taxed?
This is the part many landlords get wrong, so it deserves attention. The premium and the payout are treated differently. When you receive an insurance payout, how it is taxed depends on what the money is replacing.
Because rent is taxable, a payout that replaces lost rent is generally treated as taxable rental income in the year you receive it.
A payout that pays to repair or rebuild damaged property is treated differently. It is generally not income. Instead, it is matched against the cost of the repair. The simple way to remember it: insurance that replaces income is taxable, and insurance that repairs property is not. Keep claim documents separate from your premium records.
What Insurance Costs Cannot Be Deducted?
Understanding what you cannot claim is as important as knowing what you can. The following are not deductible as a yearly rental expense:
- Insurance on the home you live in, this is a personal cost
- The personal-use share of a building where you occupy one of the units
- Title insurance and similar one-time costs at purchase, these are added to the property's cost base
- Life insurance on yourself, even if a lender required it for the mortgage, in most cases
- Mortgage default insurance (CMHC) as a single-year expense, it is capitalized and claimed gradually
- Any premium for a period that falls in a different tax year - only the portion for the current year is claimed now
- Penalties, late fees, or interest charged on an overdue premium account
The line that catches most new landlords is the personal-use share. If you live in the building, you simply cannot deduct the part of the premium that protects your own living space.
What Records Should a Landlord Keep for the CRA and Revenu Québec?
Good records are what turn a deduction into a claim that survives a review. Both the CRA and Revenu Québec can ask you to support the numbers on your return. Keep the following for each rental property:
- The broker invoice or policy declaration page showing the premium and the Quebec premium tax
- Proof of payment - bank statements, card statements, or cleared cheques
- The policy document showing the property address, so the premium clearly ties to the rental
- Records of any premium split where you live in part of the building, with the method you used
- Claim documents kept separately, so payouts are not confused with premiums
The general rule is to keep tax records for six years from the end of the tax year they relate to. Storing each property's insurance paperwork in a folder, year by year, makes both filing and future review far simpler.
How Does the Deduction Work for Short-Term Rentals (Airbnb and VRBO)?
Short-term rental income is still rental income, and the insurance on a short-term rental property is deductible. What changes here is the kind of policy involved and the rules that surround it.
In Quebec, any owner offering stays of 31 days or less must register with the Corporation de l'industrie touristique du Québec (CITQ). They must display the registration number on all listings, and carry at least two million dollars in civil liability insurance. Hosts usually need a short-term rental endorsement or a specialty tourist-accommodation policy. The premium for that proper coverage is deductible against the short-term rental income.
There is a tax trap to watch here. If you list a property on Airbnb without the right insurance, and a guest claim is denied, you pay the loss. Carrying the correct policy protects both the property and the deduction.
Our guide on short term vs second home insurance covers this in detail.
How Does It Work for Condo Landlords in Quebec?
A condo owner who rents out a unit holds a personal landlord policy on top of the building's master policy. The premium on that personal policy is deductible against the rental income from the unit. The syndicate's master policy is handled differently. The portion of your condo fees that goes toward the building's master insurance is within your deductible condo fees.
What matters most for the insurance deduction is your own personal unit policy. This includes any deductible-assessment endorsement that protects you if the syndicate bills you for the master policy.
Because condo insurance for landlords in Quebec has these moving parts, it is worth reviewing the policy structure with a broker. The broker makes sure the coverage is right. The accountant makes sure the deduction is claimed correctly.
Common Tax Mistakes Quebec Landlords Should Avoid
A few errors come up again and again, and each one is avoidable. The first is claiming the full premium on a building you partly live in. Only the rented share is deductible. The second is forgetting that loss-of-rents payouts are usually taxable, which can lead to an unexpected bill.
The third is mixing up premiums and payouts in the records, which makes the return harder to support. The fourth is keeping a personal home policy on a rented property - this risks a denied claim and signals a mismatch. The fifth is simply not keeping the invoices, which leaves a valid deduction unsupported if a review ever happens.
Frequently Asked Questions
Can I deduct home insurance on a rental property in Quebec?
Yes. Insurance premiums on a property you rent out are a deductible expense against your rental income. The premium on a home you live in is personal and is not deductible.
Where do I claim rental insurance on my tax return?
On the federal side, insurance is claimed on Form T776, the Statement of Real Estate Rentals. On the Quebec side, it is claimed on Form TP-128. The same premium supports a claim on both returns.
If I live in one unit of my duplex and rent the other, how much insurance can I deduct?
Only the share that relates to the rented unit. A common method is to split by number of units or by floor area. For a duplex where you live in half, you would typically claim half the premium.
Is an insurance payout taxable?
It depends on what it replaces. A payout that replaces lost rent is generally taxable as rental income. A payout that repairs or rebuilds damaged property is not taxable, because it is matched against the repair cost. Large payouts can raise capital gains questions worth reviewing with an accountant.
Does the Quebec insurance premium tax count as part of my deductible premium?
Yes. The Quebec insurance premium tax is part of what you pay for the coverage, so it is included in the deductible amount. Keep the full invoice showing both the premium and the tax.
Conclusion
Home insurance for a rental property in Quebec is fully deductible on both your federal and provincial returns. A rented property earns income and the insurance that protects it is a cost of earning that income. The safest approach is to carry the correct landlord policy, claim it properly, and keep clear records for tax purposes.
Most landlord tax mistakes are avoidable, such as incorrectly claiming a personal-use share, forgetting that loss-of-rents payouts are taxable, or holding a homeowner policy on a tenanted property. Getting the insurance right is the first step, and getting the deduction right is the second.
Qubit Insurance is an AMF-certified damage insurance brokerage based in Montreal, serving landlords across Quebec. We help owners place the right landlord, condo, multi-unit, and rental coverage. We secure policies that protect the property while clearly outlining how the premium should be claimed at tax time. While we are insurance brokers and not tax advisors, getting the coverage right is the foundation on which everything rests.
Request a no-obligation landlord insurance review from an AMF-certified Qubit Insurance broker. Get a Free Quote or call +1 450 234 2120.
Disclaimer
The information provided in this blog post is for general informational purposes only and does not constitute professional tax, financial, or legal advice. While we strive to keep the information accurate and up-to-date, tax regulations are complex and subject to change. Always consult with a qualified accountant or tax professional regarding your specific financial situation and before filing any tax returns. Qubit Insurance is an insurance brokerage and does not provide tax or accounting services.
