For rental properties, Is principal taxable income?

I am in Canada and I have some rental properties. I want to ask if principal in mortgage payment should be counted as net-income or taxable income? I always think the principal part of mortgage payment is tax free income. I should only pay tax if I have positive cash flow. But my accountant told me that even my property break even with 0 cash-flow after mortgage payment. I still have principal as income, because only Interest is expense. So my principal become net-income and it is taxable. I can only claim depreciation to defer the tax. Is it true? It is against my knowledge that equity & principal is tax free income. Please clarify. Thanks Jordan

Public Comments

1. As per the other identical question you asked, yes, principal is income. The renters are giving you money to pay the principal portion of each mortgage payment. It is income. The entire rent is income. From this you have deductions, such as your interest, condo fees, management fees, upkeep, etc. Hope this helps.