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Real Estate The Investor’s Toolkit


Should you manage your own property? When can you deduct mortgage interest? Here’s what every investor needs to know about buying real estate


by Rosalind Stefanac A illustration by Pepifoto/iStock


MAJOR DRIVER OF ECONOMIC GROWTH, Canada’s real estate and housing market has been a hot prospect for buyers here and abroad for decades. And with good reason. Even with recent price hikes in some markets, Canada has shown a lot of underlying stability in comparison with other countries. Plus, our property laws to this point have generally favoured investors.


For those eager to get in on the action, take heed. Whether you’re a first-time buyer or a sea-


soned one, there are plenty of considerations to take into account when buying property for per- sonal use or as an investment. Here’s a sampling.


How do I deduct mortgage interest? Interest on mortgage loans in Canada can only be deducted on investment income. In other words, if you buy an investment property, 100% of the mortgage interest is deductible. But if the property serves as your principal residence and is not producing income, don’t expect any tax breaks. Of course, if you rent out part of your principal residence, you can subtract expenses incurred in maintaining it for rental. And the percentage of the mortgage interest that is attribut- able to the rental portion of the home will also be deductible.


28 | CPA MAGAZINE | NOVEMBER 2017


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