We bought a property for the garage on it- we use this garage for our company vehicles.we do not live there Can we claim the mortgage payment as a deduction.Do we have to pay GST on this? We live in Alberta.
Hello and thank you for posting your question.
You can generally claim interest on property purchased for the use of your business. You can choose to capitalize interest on the money you borrow:
to buy depreciable property
to buy a resource property
for exploration and development
When you choose to capitalize interest, add the interest to the cost of the property or exploration and development costs instead of deducting the interest as an expense.
As a general rule, real property transactions are taxable, even when the vendor is a small supplier. In such cases, the vendor must collect and remit the tax (unless you the purchaser, is a GST/HST registrant).
If the property will be used 90% or more in commercial activities, a full ITC is available (except for financial institutions), and no tax has to be remitted. However, if the property won’t be used primarily in making taxable supplies, the purchaser must remit the applicable GST/HST. Under these circumstances, a partial ITC may still be available.