Can you split reno tax deductions across several years? (Canada)

[Vlad Popovici]

Hi everyone,

I have a question specifically about claiming expenses (tax deductions) on "major" renovations/repairs for rental properties, specifically in Canada (but perhaps US has a similar system).

As far as I'm aware, in Canada at least, renovations can either be considered as current expenses (ie: tax deductions on your yearly rental income) or capital expenses (ie: tax deductions that are applied only upon the sale of the property).

I am using the following link to distinguish between these two types of renovations. 

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/rental-income/current-expenses-capital-expenses.html

I plan to perform two major renovations on my rental income property this year (brick wall repair and roof repair). I am considering these as current expenses based on one definition from the above link which states: "an expense that simply restores a property to its original condition is usually a current expense."

However these are very expensive repairs (30k+ in total) and will definitely exceed the rental income for one year. My questions are:

1) What happens when deductible expenses exceed rental income for a particular year from a tax perspective?

2) Can you split the deductible expenses over several years?

Thanks for helping out!