# Rental Property interest



## pravspresso (Nov 9, 2011)

I saw the other heading but it didn't answer my question:

1) $300,000 loan at 5% yr on investment property

2) 1st yr pay $15,000+- on interest alone

3) What percentage of this interest actually gets written off
towards my yearly salary? ie full $15,000 comes off my
yearly wage of $70gs? i know that's wrong. Please 
enlighten.

Thanks in advance.


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## orange (Oct 23, 2011)

You deduct your mortgage interest, like all of your other rental property operating expenses, from your rental income. This reduced your rental income that will be added to your salary (from your "day job") on which you pay income tax.


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## marina628 (Dec 14, 2010)

Your salary has nothing to do with it ,it is income from rent minus expenses then you report that number on your income tax


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## Young&Ambitious (Aug 11, 2010)

Marina is right. You might be thinking of the US where they are able to write off property interest on properties against their general income.


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## nathan79 (Feb 21, 2011)

If you come up with a negative number after you deduct your interest and other expenses (ie, your rental operation lost money that year), then you can use whatever you lost against your regular income.

For example, I collected $7860 in rent from my rental last year, but my expenses (interest, utilities, property tax, mainenance, etc) were $8250... so I lost money that year. I entered the amount I lost (-$390) on line 126 where it says net rental income.


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## Berubeland (Sep 6, 2009)

Young&Ambitious said:


> Marina is right. You might be thinking of the US where they are able to write off property interest on properties against their general income.


Property mortgage interest on a *rental property* is also 100% tax deductible in Canada, always.


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## cardhu (May 26, 2009)

Berubeland said:


> Property mortgage interest on a *rental property* is also 100% tax deductible in Canada, always.


No ... not always ... if that rental property happens to be vacant land, the interest expense cannot be deducted against other income ... it can only be used to bring the rental income down to zero, after which it gets added to the ACB of the property. Same goes for property taxes. That may have been what Y&A was thinking of. 

OP just said "investment property" ... that could mean any one of a number of things.


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## Cal (Jun 17, 2009)

I generally get a year end statement from my lender that breaks apart the payments into principle and interest.


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