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Tax laws differ from country to country and maybe state to state but I think in general:

Interest paid on money borrowed for investment purchases is tax deductable.

The home equity line of credit was develped for this purpose. You don't pay interest unless you withdraw the money, and if it is withdrawn for a downpayment on a rental property that classifies as money borrowed for investment purposes. Same as borrowing money to buy an RRSP. The interest on that loan is tax deductable.

That is the way it is in Canada.

2007-02-13 19:54:34 · answer #1 · answered by glen s 3 · 0 0

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