Real Estate

How to properly use HELOC as deposit for rental property

  • Last Updated:
  • Oct 21st, 2017 11:39 am
Jul 7, 2008
23 posts

How to properly use HELOC as deposit for rental property

Hi everyone,

I am planning to use my heloc to put down as deposit for a rental property that I"m purchasing. How can I make sure that I'm doing it properly for tax purposes. Can I write a cheque directly from my heloc to the seller or would I need to first deposit the money into my business account and then write a cheque to the seller?

Hoping to get an answer by tomorrow morning as I need to write up one tomorrow!.

Thanks everyone.
2 replies
Feb 12, 2008
212 posts
You should be asking an accountant or real estate lawyer this question. If you must ask a forum of users (for which you can't easily verify their qualifications to answer you), post in the mortgage rate sticky thread. A few accredited mortgage specialists frequent that thread and can provide a more reliable answer to this question.
Nov 24, 2015
375 posts
Toronto, ON
CRA needs you to track the source of invested funds separately. So if you pay directly from line of credit you are good to go. This will help you show the exact interest you paid related to this investment property. The best way is to not use this line of credit for any other purpose.

Some banks e.g. National Bank allow you to split available credit among separate lines. Thus help you separately track them as needed.