Going through some of the junk mail and flyers this past week, I noticed one flyer that talks about what is generally thought of as impossible: an interest-deductible mortgage in Canada. Unlike the US (where this deductibility is a big part of the sub-prime crisis in the States) one can't deduct mortgage interest.
The strategy is an old one, but a bizarre one too -- in a round-about way, it involves using a line of credit allegedly to make investments. In reality, you're using it to pay off the mortgage. Then you make payments on the line of credit, often interest only, and that interest becomes deductible. The way it's discussed in the flyer and advertising an upcoming "information" session, one can get even bigger tax returns since the money somehow finds its way into tax shelters.
The kicker: They claim to get the endorsement of the Financial Post writer Jonathan Chevreau.
Oh come on. When word of this gets back to The Revenue, you know they'll find a way to shut it down. There's nothing wrong with tax planning, but this comes very close to tax avoidance which is the grey area between planning and evasion.
As a still single guy without kids who's willing to pay the related higher income taxes because I am single income with no kids (a SINK), I have four words: I'm not that stupid.
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