Is Mortgage Interest Tax Deductible in Canada?
When it comes to taxes, every homeowner and investor is looking for a way to save a few bucks. The burning question: Is mortgage interest tax deductible in Canada? Let's break it down!
Your Primary Residence
For most Canadians, the dream of deducting mortgage interest on a primary residence remains just a dream. Unfortunately, you can't deduct interest on your primary home.
Rental Properties to the Rescue
Here's where it gets interesting. If you own a rental property, the interest on that mortgage is fully deductible. This can significantly reduce your taxable income from rental earnings. So, if you're considering a real estate investment, this is a golden nugget.
The Mixed-Use Scenario
What if your home is pulling double duty? Say you rent out your basement or use part of your house as a home office. Good news! You can deduct the mortgage interest proportionally. For example, renting out a quarter of your home means you can deduct 25% of the interest.
Steps to Claim Your Deductions
Rental Properties: Use Form T776, Statement of Real Estate Rentals.
Home Office: Use Form T2125, Statement of Business or Professional Activities.
Why Bother?
Tax Savings: Reduce your tax bill and keep more of your hard-earned cash.
Accelerate Mortgage Payoff: Use the savings to chip away at your mortgage faster.
Build Equity: Watch your net worth grow as you reduce your mortgage debt.
Understanding these rules can help you make smarter financial decisions.
Mortgage Rates starting @ 4.99% as of this publication.
Let's Connect: Roshaan P
Powered by: Ikonic Mortgages - Let's Make Your Real Estate Journey IKONIC
Your one-stop shop for all things mortgages 👉 Click Here
Content Creator || Videographer || Drone Operator
3moHi, This is Danish, a content creator based in Dubai. I specialize in creating and editing high-quality videos and managing social media to boost your brand's presence and engagement.