The interest you pay on your investment loan can be claimed as a tax deduction. For the interest expense to be tax-deductible, you must:
- Use the borrowed money to earn income from a business or property.
- Pay the interest during the tax year for which you are claiming the deduction.
- Have a legal obligation to pay the interest.
- The interest charged and paid must be reasonable as defined by the CRA, usually one established by market rates.