This is not a good idea. Reasons below.
A much better way to handle this is to create a reimbursed utilities expense pro-rated to actual amounts and based on square footage.
An alternative is to issue a T2200 and claim employment expense on T777 for Employment Expense.
The reasons not to pay a “RENT EXPENSE” are the following:-
- Change of use of residence from principal residence to commercial rent.
- GST applies to commercial rent.
- Capital Gains implications.
As far as the second home is concerned there are a heap more considerations for business use.
- City Zoning and Permits.
- Who should own the property? A Corporation or the individual. The same corporation or a different one?
This is not for the faint of heart. Consider seeking expert advice. Special GST rules may apply as well.
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Ian V. MacInnis
Easy-to-read analysis of real estate income taxation with expert commentary
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