# Question on rental property buying specific to deductions/expenses



## kubatron (Jan 17, 2011)

Hello

Can someone deduct a cmhc premium and land transfer tax payment when buying a rental property as an "expense"?

If not, and it's in a holding company, can they do it in that case?

Just curious. Thanks.

(Why is there a cmhc premium you ask? Some lenders, regardless of down payment, charge it)

Thanks Jake


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## marina628 (Dec 14, 2010)

I was not even aware you can buy investment with CMHC and in all my years of purchasing except for my first home we have never paid CMHC.You can write off the land transfer and legal fees although for some reason our accountant told us to leave these until we sell the properties.


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## Just a Guy (Mar 27, 2012)

There were ways to get CMHC backed rentals...but the premiums never really made sense to me. I think they turfed the option when they reformed CMHC last year and made it strictly homeowners.


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## stardancer (Apr 26, 2009)

Land transfer tax gets added to the cost of the property, along with lawyer's fees. Then when you come to sell, the ACB is higher than just the price of the property. It is not a current expense.

Never having dealt with CMHC, can't help on the other question


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## balexis (Apr 4, 2009)

re: CMHC premiums, you can deduct the amount over a period of 5 years.

See this thread:
http://canadianmoneyforum.com/showthread.php/2522-Rental-unit-and-CMHC-mortgage-insurance-deductible


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## OurBigFatWallet (Jan 20, 2014)

stardancer said:


> Land transfer tax gets added to the cost of the property, along with lawyer's fees. Then when you come to sell, the ACB is higher than just the price of the property. It is not a current expense.
> 
> Never having dealt with CMHC, can't help on the other question


This is true. The gain (or loss) is then affected by the capitalized costs. It can't be expensed because it relates more to a cap asset than an expense


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## Berubeland (Sep 6, 2009)

Large property owners get CMHC in residential properties because the banks will give them a very good rate on a mortgage. This will save them about 2-3 % which is not chicken food on multimillion $$$ property


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