home rental/tax question

[mindflayer]

Where do you live? (country).

In Canada the system is totally different from the US.
In Canada, your primary residence is treated differently than a home you own and rent out.
IN Canada;
On a primary residence, your interest portion of your mortgage is NOT tax dedudtible; and when you sell your home, the Capital gains is NOT taxable. (pay now, benifit later)
If the home is rented out (you dont live there) it is an investment property. The rental income is added to your income BUT then
the interest Portion IS tax deductable and then the Capital Gains ARE taxable. (benifit now, pay later)
A lot of other things are also deductable as well.

If it is split.. (ie you own it and live there but rent out the basement etc) you can write off up to 30-35% of the hydro/gas/interest/insurance vs the rent coming in without the property being considered an investment property.
(ask your accountant on what is a safe %)