Real Estate

Heloc Interest Claim for Investment Property with future closing

  • Last Updated:
  • Jan 24th, 2021 7:47 pm
[OP]
Member
Sep 12, 2008
217 posts
53 upvotes
Toronto

Heloc Interest Claim for Investment Property with future closing

To all investors, Can the HELOC interest used for down-payment for investment property be claimed in the current year if the closing is at future date? So lets say closing is in 2024 and we put the down-payment from Heloc in 2021, can we claim the interest for the year 2021, 2022 and 2023 until the closing is complete.
3 replies
Deal Addict
Jan 9, 2010
2213 posts
1666 upvotes
You add it to the acb of the property until the property actually closes and is ready to be rented out.
Sr. Member
User avatar
Jul 1, 2005
541 posts
149 upvotes
rahulpatel1987 wrote: To all investors, Can the HELOC interest used for down-payment for investment property be claimed in the current year if the closing is at future date? So lets say closing is in 2024 and we put the down-payment from Heloc in 2021, can we claim the interest for the year 2021, 2022 and 2023 until the closing is complete.
No you don't. Because you have zero income from the investment property to claim against. You cannot claim them against other income source.

As other suggested, you add it to the cost of the property and you claim it when you sell it in future, when you calculate your capital gain tax.
Newbie
Jan 1, 2019
32 posts
6 upvotes
Very timely question, I am in same situation. i booked a pre-con rental property in 2020 using HELOC and it will be closed in 2021 (hoping to start generating (rental)income from it by June 2021). So, HELOC interest from 2020 will to ACB of the property ( will reduce the capital gains when the property is sold) and HELOC interest from 2021, since the property will start generating income, will charged as expense like the mortgage interest for the rental property. Correct? thanks.

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