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Thread: Rental that becomes primary

  1. #1
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    Default Rental that becomes primary

    Ive had a rental for about a year and half now but it's now vacant as it will be torn down and turned into a duplex with myself taking one side and the builder taking the other side.

    Can I continue to write off the interest payments (heloc and interest on mtg) until the project is complete?

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    Sounds like a good question for an accountant.

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    Great excuse to circle over the property in a helicopter with your CMA.

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    Quote Originally Posted by suntan View Post
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    Great excuse to circle over the property in a helicopter with your CMA.
    That’s a CPA. Jeez
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
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    fact.
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    guessing who I might be, psychologizing me with your non existent degree.

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    The only time that interest can be deducted is when the property is occupied or able to be occupied because otherwise its not able to be generating revenue. So no, you can't deduct interest on the mortgage while its torn down.

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    Expenses can only be claimed against the income the rental generates. So not having any income means you have nothing to claim it against anyways.

    Do talk to an accountant though.

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    The moment you kicked out the tenants and made plans to start building for yourself is the date your rental switched over to primary. Even if you are living at another primary while the build happens you are building for yourself and not constructing for purposes of rental income. If you find a good accountant perhaps you can claim 1/2 of the interest since 1/2 of the build is for investment purposes.

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    Quote Originally Posted by jabjab View Post
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    Ive had a rental for about a year and half now but it's now vacant as it will be torn down and turned into a duplex with myself taking one side and the builder taking the other side.

    Can I continue to write off the interest payments (heloc and interest on mtg) until the project is complete?
    If you have revenue from other rental properties, sure.

    And if you have a traditional mortgage on your house, you can't tear it down until that mortgage is paid off or converted to a construction mortgage. Because you can't tear down something you don't own.

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    Just get some bums from a C-Train station and let them live on top of the rubble.

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