CRA finds that most insurance premiums and municipal taxes incurred during a rental building renovation are deductible

CRA found, in the situation where a taxpayer renovated a rental property, that: s. 18(3.1) only required the capitalization of insurance premiums that related to any risk connected to the renovation (suggesting that most of the premiums would be deductible), and; municipal taxes incurred during the renovation period were only required to be capitalized to the extent they related to the relevant land, rather than to the building (which, although not so stated by CRA, typically would represent a large part of the property’s value).

Neal Armstrong.  Summary of 5 July 2013 2013-0489821I7 F under s. 18(3.1).