# Loan tax deductible on condo



## rassmy (May 7, 2010)

Guys,

I am new to the realestate investement, I bought a my first condo which will be delivered in 2013, I borrow 10% down payment from HELOC. My question is that can I claim the intrest on this loan in my tax?. although this loan does not produce any income until summer 2013?.

Thanks for your reply.


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## andrewf (Mar 1, 2010)

Do you intend to live there or rent it?


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## rassmy (May 7, 2010)

I will not live in it. I just bought it for investment.


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## stardancer (Apr 26, 2009)

Since you won't be making any income until 2013, the loan interest is not tax deductible right now.

Keep track of the loan interest you pay, as it can be added to the cost base of the condo (with the purchase price and fees). This increases your adjusted cost base and reduces any capital gain you make on selling the place.

Then when you do start earning rental income, the loan interest at that time then becomes tax deductible as an on-going expense.


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## Cal (Jun 17, 2009)

Probably something you should have asked prior to signing. Not that it would be a deal breaker, but you should know what you are getting in to.

When you get your taxes done in the spring ask your accountant a few questions regarding rental properties and your individual situation.


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## MoneyGal (Apr 24, 2009)

These are known in CRA lingo as "soft costs." Here is the circular from CRA that you should read: 

http://www.cra-arc.gc.ca/E/pub/tg/t4036/t4036-10e.pdf

See page 11 on soft costs.


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## rassmy (May 7, 2010)

Thanks moneygal for the link.


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