If you own a rental property, basement apartment, duplex, triplex, laneway suite, or garden suite, there’s a powerful tax strategy that could dramatically improve your bottom line — and most Canadians have never heard of it.It’s called Rental Cash Damming. This CRA-compliant approach allows you to transform non-deductible mortgage debt on your personal residence into deductible investment debt — all without taking on new risk or adding to your total debt load.Let’s say you have a $640,000 mortgage on your primary residence and are earning $2400/month in rental income. You apply that income to pay down the mortgage on your home. You then borrow $2400 from your re-advanceable HELOC to cover your rental expenses (mortgage, taxes, insurance, repairs, etc.). Since that money is now being used for an income-generating purpose, the interest on the HELOC becomes tax-deductible. Over the life of the mortgage, you could receive $175,000 in tax refunds, pay off your home nearly six years sooner, and save more than $221,000 in interest.To set it up right, you need the right mortgage structure and a solid plan. I highly recommend speaking with Tyler Salmon, an expert mortgage broker who understands this strategy inside and out. You can reach Tyler at https://mortgageswithtylersalmon.ca/.If you own a rental property, basement apartment, duplex, triplex, laneway suite, or garden suite, there’s a powerful tax strategy that could dramatically improve your bottom line — and most Canadians have never heard of it.It’s called Rental Cash Damming. This CRA-compliant approach allows you to transform non-deductible mortgage debt on your personal residence into deductible investment debt — all without taking on new risk or adding to your total debt load.Let’s say you have a $640,000 mortgage on your primary residence and are earning $2400/month in rental income. You apply that income to pay down the mortgage on your home. You then borrow $2400 from your re-advanceable HELOC to cover your rental expenses (mortgage, taxes, insurance, repairs, etc.). Since that money is now being used for an income-generating purpose, the interest on the HELOC becomes tax-deductible. Over the life of the mortgage, you could receive $175,000 in tax refunds, pay off your home nearly six years sooner, and save more than $221,000 in interest.To set it up right, you need the right mortgage structure and a solid plan. I highly recommend speaking with Tyler Salmon, an expert mortgage broker who understands this strategy inside and out. You can reach Tyler at https://mortgageswithtylersalmon.ca/.