My_question_is: Canadian-specific
Subject: interest on rental income mortgage
Expert: taxman at centa.com
Date: Sunday August 13, 2006
Time: 10:08 AM -0700
QUESTION:
Hello,
We are a young family who decided to purchase a second home to rent. We
were told that we could claim 100% of the interest on the mortgage for the
house being rented however we are now getting conflicting advise about this.
Can you please advise.
Thank you so much,
---------------------------------------------
david ingram replies:
The interest on anything to do with the rental house is deductible,
If, for instance, you have $34,000, $50,000 or a $100,000 for a down
payment, you should pay that down on the house you live in and borrow the
money for the down payment.
After, when you have your rental house, by taking the rents you receive and
paying them against your non-deductible personal mortgage and borrowing to
pay the payments on the rental or the taxes on the rental or the
repairs,etc., on the rental, you can use the rental to make your own
mortgage deductible as well.
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hand box.
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