I own a town house which is almost paid off (only about $15,000 to be paid in balance against the mortgage). I intend to rent out this townhouse and buy a new detached home which will be my principal residence.
If I take out a line of credit against my current townhouse and use the money from the line of credit to make a down payment on the new detached home, would I be able to expense the interest I pay on the line of credit towards the rental income?
I know interest payments on line of credit are deductible only if they are used for income earning investments. In my case I am using the line of credit to make a down payment on my new principal residence.
Please advise
If I take out a line of credit against my current townhouse and use the money from the line of credit to make a down payment on the new detached home, would I be able to expense the interest I pay on the line of credit towards the rental income?
I know interest payments on line of credit are deductible only if they are used for income earning investments. In my case I am using the line of credit to make a down payment on my new principal residence.
Please advise