Renting Out Your Home? How the 45(2) Election Can Defer the Tax Hit
Converting your principal residence into a rental triggers what the Income Tax Act calls a change of use. The CRA treats this as a deemed disposition, meaning you are considered to have sold the property at its fair market value (FMV) and bought it back the same day, even though no actual sale happens. That […]
Second Mortgage vs Refinance to Invest: Which One Actually Costs Less?
A second mortgage and a refinance both turn home equity into cash, but they are priced, secured, and qualified differently. Whether the interest is tax-deductible depends entirely on what you do with the money, not which product you pick. This guide compares the cost, the qualifying impact, and the tax treatment of each so you […]
Using a HELOC to Buy a Rental: When the Interest Is Deductible (and the Qualification Trap)
Interest on a home equity line of credit (HELOC) used to buy a rental property is generally tax-deductible under Canada Revenue Agency (CRA) rules, because the borrowed money is used to earn income. The part almost nobody mentions is what that same HELOC does to your ability to qualify for your next mortgage. The deduction […]