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Tax credits when renting property from a family member
There is a lot to unpack with your question, Satyesh, but I will address your direct question right off the bat.
If you rent real estate from a family member, if you both treat it as a legitimate landlord-tenant relationship, you may be able to claim a tax credit just as if you were renting from a third party.
Ontario has an energy and property tax credit, Quebec has a solidarity tax credit, and Manitoba has a residential renters tax credit. Each of these has a rent component and may result in tax savings for lower income taxpayers.
Your daughter would report the rental income and deduct applicable expenses like property taxes, insurance, utilities (if she pays them) and mortgage interest (if applicable). It bears mentioning that she may end up paying more tax on the net rental income than you would save on the tax credit…
The Latest in Mortgage News: RBC downgrades its housing market forecast
– canadianmortgagetrends.com
Thanks to the mortgage stress test, many now have to qualify at 7% — but is there a way around that?
– thestar.com
One option to help you pass the mortgage stress test, experts say, is to opt for a variable rate loan which favours borrowers. But there are downsides to that strategy.What Rocket Mortgage’s entry into Canada means for brokers and mortgage shoppers
– canadianmortgagetrends.com
Variable Rates Go Up, Fixed Rates Come Down
– canadamortgagenews.ca
If you’re reading this, you probably know by now: the Bank of Canada has been raising their benchmark rate aggressively to battle inflation. And I mean aggressively. Their rate has gone up by 2.25% in 6 months which is absolutely – wait for it – unprecedented.
As a result, variable rates have shot up. Everyone expected fixed rates to follow suit – but interestingly enough, the opposite has happened. They’ve actually gone down. Yup, you read that right: while variable rates are going up, fixed rates are going down.
How Is That Possible?
Fixed rate mortgages are priced against 5-year bond yields. The yield rate reached a high of 3.59% on June 14th. Only a month and a half later, that rate is now hovering around 2.82%. What does this tell us? Fixed rates are based on speculative factors. Investors anticipated rate hikes 6 months ago and priced them in early. Now, we’re on the other side.
Not long ago, most 5-year fixed rate mortgages were hovering at around 5…
