Deduct Your Mortgage Payments
This is a common question asked by many Canadians: is there a way to deduct my mortgage payments? The answer is yes, if certain conditions are met. There are typically 2 ways to do this:
1) If as an example you have $200,000 of mortgage debt and a $200,000 investment portfolio, you can deduct your mortgage interest payments by liquidating the portfiollio to pay off the mortgage, and then simultaneously borrow back to re-create the same portfolio you had prior. What this does in effect is change the loan from a mortgage on a home to money borrowed to invest or generate income. The interest on this debt is now tax deductible.
2) The second method is to utilize the Smith Maneuver™, however, this is more complex and involves leveraged investments.
Both have their merits depending upon your financial situation.