From: tsanford@nf.sympatico.ca 
  
 jk wrote: 
 > 
 > According to Canadian tax law, interest on money borrowed for investment 
 > purposes is deductible for Canadian Income Tax purposes for as long as you 
 > own the investment or a replacement investment. 
 > 
 > Why interests on mortgage or my line of credit that I use to pay off my 
 > house are not tax ductible? 
 > 
 > Regards, 
 > 
 > J.S. 
  
 Govt of Canada through CCRA have probably decided that since we 
 are not taxable on any gain (or loss) on the sale or purchase of 
 'A personal residence' we are not entitled (according to their 
 current rules any way) to be able to get any tax relief on money 
 borrowed to buy a house. I believe that in some US states there 
 can be a tax reduction; I guess they want to encourage home 
 ownership? 
 It occurs to me that if you started a business that involved the 
 purchase and sale of housing etc. (in other words a business with 
 expectation of profit/loss) then the interest on any money 
 borrowed WOULD be an expense. If you happened to live in one of 
 the residences 'owned' (on borrowed money) by the business and 
 CCRA did not find out I guess you could achieve that objective? 
 Another way that occurs to me is if we could persuade the 
 Canadian government that buying a house would be so good for the 
 economy and so worthwhile for families to own a home that they 
 would allow some tax reduction on the interest (or perhaps the 
 principal) that we pay? With current low interest rates, the 
 current spate of building, Canada wide, and the fact that for 
 years one has been able to buy a house with only 5% down and CMHC 
 insurance of the lender for the remainder of the 95%, makes it, 
 IMHO, very unlikely. 
 My idea anyway. But they would have to institute rules to prevent 
 people like myself; with no mortgage at all, from going out, 
 getting a mortgage on our fully owned home (for 33 years) and 
 getting a tax break on it! Hmm! I must think about that! 
 I compliment you though for raising the question. 
 Terry. 
  
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