Is municipal property tax deductible for tax returns in Canada? What about mortgage payments? ?

Question

Is municipal property tax deductible for tax returns in Canada? What about mortgage payments? ?

Answer 1

Unless you are paying property tax on a building you use to produce income, only Ontario and Manitoba (and possibly Québec) allow credits on your return in respect of property tax paid, and then only for your principle residence, and then only if your income is under a certain level. The property tax credit would appear on form ON479 or MB479, depending on which province you actually live in.

Mortgage payments are never deductible, however, if you use a building to earn income, you may be able to claim Capital Cost Allowance. Consult with an accountant before doing this. When you claim Capital Cost Allowance on a building, you are in effect telling the Revenue Agency that the value of your building is going down. If you eventually sell your building for more than its adjusted cost, you will have to include all the prebiously claimed CCA in your income in the year of disposition.

Answer 2

Municiple tax, no.

Mortgage payments, possibly.  If you use your home for business purposes you can write off a portion of the interest paid to the mortgage, but that is unter strict guidelines.  You can also re-structure your mortgage debt to make it a tax deductible debt, however this depends how much equity you have in your come and it involves leveraging.  Can be very rewarding financially, however if you don't do it right CRA might refuse the deduction.  Visit a Financial Advisor or Accountant that is familiar with leveraging to convert your mortgage or who is familiar with business deductions.

Answer 3

On residential properties, the answer is no and no.

If the property is being used for business purposes, some or all of those might be deductible.  Under very strict rules.