Remortgaging to make more deductible -

My question is: Canadian-specific
QUESTION: I don't know if this has been addressed in archives so I will
attempt to explain myself. Myself and my spouse are joint shareholders in a
BC corporation that presently is operating out of our home. We are starting
to burst at the seams and are now looking for office /storage space. I would
prefer to purchase a space rather than lease it as the payments would be
somewhat the same (within a few hundred a month). I figured it would be
better to outright own the property. Our house mortgage is coming up for
renewal in 3 months. The present value on the home is close to the $600K
range with approx 160k owing.Of the 160k mortgage, 100k is presently used as
a tax deduction as I was an active shareholder in an Ontario Corporation.(
Presently in the works to sell the shares as I have not been active in the
business for 7 years. Once those shares are sold I will not have this
deduction any longer. My questions based on these events are as follows,
Should I on the refinancing issue, go for a mortgage that will also
incorporate the commercial space as well? Rates are historically low and it
appears that they may even slide back a hair.
Do we lock it in for a long fixed term as the interest may be tax
deductible? Then do we lease the space to our corporation?
As for the new mortgage I assume we would only be able to claim the portion
used based on what was used for the commercial building.
We would still use a portion of our home as an offsite office so that we can
use that portion as legitimate deductions?
Any opinion would greatly be appreciated.
david ingram replies:
I think you are smart to buy even though i am predicting a temporary
slowdown and even a drop of 10 or 15% in prices.  However, since everyone
else is against me here it makes total sense to buy now and get the use and
pride out of your new building.
If you are self employed, it is easy to make your whole mortgage deductible.
read the Smith Manoeuvre and my November 2001 newsletter in the top left
hand corner at
When you have a corporation, it is difficult.  A solution is to operate a
part of your business as a proprietorship for just long enough to make your
mortgage deductible.
I charge a minimum of $400 for that kind of consultation but you can get
lots of free information by attending one of Fred Snyder's free seminars
every Thursday at noon and 7 PM.
In addition, you can listen to Fred's 600AM programs every Sunday morning
from 9 to 10:30 AM.  I used to be the co-host but have been relegated to
occasional guest now.  However, this next Sunday is one of those days and I
will be on from 9 to 10:30 Sunday Oct 29 on CKBD which is at 600 on the AM
If you are on Vancouver Island, Ralph Hahmann, Fred's Victoria
Representative has free seminars on this and other financial subjects every
Tuesday Night - call him at (250) 727-9238 or (250) 472-0700 to reserve a
Glen Kelleway at glen at (604) 476-0053 is one of the few
local mortgage brokers who truly understands the principal and I used him
for my own mortgage even though I was a licenced mortgage broker myself (no
Stuart Rodger is also a regular guest on Fred's Show and represents Manulife
Bank.  They have the most innovative approach to this technique but are less
free when it comes to approving anything out of the ordinary (ie, you have a
bankruptcy or other credit problem in your background)  You can listen to
Stuart on Sunday, meet him at Fred's Seminars on Thursday evenings or call
him at (604) 351-6133.  My rather public bankruptcy a few years ago meant
that I was turned down when I applied.
Answers to this and other similar  questions can be obtained free on Air by
david ingram on the last Sunday of each month.
On the last Sunday at 9:00 AM on 600AM in Vancouver, I, david ingram will be
a guest on Fred Snyder of Dundee Wealth Managers' LIVE talk show called "ITS
Those outside of the Lower Mainland will be able to listen on the internet
at <>
Call (604) 280-0600 to have your question answered.  BC listeners can also
call 1-866-778-0600.
Callers to the show and questioners on this board can also attend the
Thursday Night seminars on finance and making your Canadian Mortgage
Interest deductible.
I will be at the seminar following the last Sunday of the month.
Every Thursday Evening, Fred Snyder of Dundee Wealth Management conducts one
of 17 different financial seminars in the boardroom of his office
Time:    7:00 to 9:30 PM
Date:    Every Thursday evening
Place    1764 West Seventh
             Vancouver (corner of Burrard)
Phone (604) 731-8900 to register
No cost - no obligation
Topics always cover mortgage interest as a deduction
other topics - getting the mortgage, estate planning, critical care
insurance, income taxation, differences between stocks and bonds, and
usually the most innovative HELOC mortgage offered in Canada from Manulife
If you are starting in downtown Vancouver and do not want to go home first,
one of the excellent THAI HOUSE restaurants is in the same building and
makes a nice start to the evening. If it is your first seminar, Fred will
buy you dinner if you are pre-registered.
I, david ingram, will be at the Thursday evening following the last Sunday
of each month to cover mortgage interest as a deduction and give the class
an adding test.
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 10 PM 7 days a week  Vancouver (LA) time -
(please do not fax or phone outside of those hours as this is a home office)
email to taxman at <mailto:taxman at> <>
Disclaimer:  This question has been answered without detailed information or
consultation and is to be regarded only as general comment.   Nothing in
this message is or should be construed as advice in any particular
circumstances. No contract exists between the reader and the author and any
and all non-contractual duties are expressly denied. All readers should
obtain formal advice from a competent and appropriately qualified legal
practitioner or tax specialist for expert help, assistance, preparation, or
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