Many Canadians pay off their mortgages each year without receiving any tax benefits. However, if you own a rental property or a rental basement unit, there is a legal strategy that can change this: it’s called Rental Cash Damming.   This approach allows you to convert your personal, non-deductible mortgage interest into deductible investment debt. The benefits of this method include larger tax refunds, faster mortgage repayment, and a more efficient use of the income generated from your rental property.   Here’s a simplified overview of how it works: 1. Use your rental income to pay down your home mortgage. 2. Re-borrow that same amount using a re-advanceable HELOC (Home Equity Line of Credit). 3. Use the borrowed funds to cover expenses related to your rental property. Since the borrowed money is used for income-generating purposes, the Canada Revenue Agency (CRA) allows you to deduct the interest. Why is this important? – It is fully compliant with CRA regulations. – It does not increase your overall debt. – It could save you thousands of dollars in taxes over time.   To effectively implement this strategy, you need the proper mortgage setup, thorough record-keeping, and a basic understanding of how to manage your cash flow. Interested in learning more?  Book a Call