Unlike our neighbor on the south, we as Canadian are not allowed to deduct the income taxes for interest payments on mortgages against the homes we live in. That being said, mortgage interests on owner-occupied properties are not tax deductible.
Many people wanted to know why. It is simply because owner occupied properties don’t produce income.
The solution becomes obvious once we know the reason — Convert the non income producing debt to an income producing debt. The former is called bad debt and the latter good debt.
So there are basically three steps to make your mortgage tax deductible:
- A mortgage program that allows you to pay off your mortgage and take out equity periodically;
- An investment program that produce positive cash flow;
- A tax planning to claim your tax return
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