Home Ownership, Canadian Style

Candy Evans — Wed, 04 Mar 2009 00:05:33 +0000

I had the pleasure of having lunch today with Bob Schlegel, Chairman and CEO of PAVESTONE, the Grapevine-based manufacturer of concrete pavers and building products, and his darling daughter, Kim Schlegel Whitman. We discussed home ownership in Canada versus the U.S. Canadians cannot deduct the home mortgage interest from their taxes. (Which does not steer them away from home ownership in the least.) President Obama is looking to limit that deduction for high net worth individuals to recoup additional revenue. With our Wall Street meltdown, many folks are looking closely at our rock solid neighbor to the north where the banks are not hemorrhaging and socialized medicine is the health plan. Canadian mortgages, says Bob, are higher. Schlegel told me his first home in Canada cost about $25,000 in the mid 70′s and held a 12% interest rate. Since you cannot deduct home mortgage interest in Canada, he says, the incentive is to hurry up and pay off that mortgage and own the home, which he and his wife Myrna did. Business interest is deductible, so Canadians tend to pay off their homes and take out other loans with deductible interest. The end result — more paid-off homes. From the perspective of good conservative fiscal living, says Bob, that’s what happens in Canada.

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Home Ownership, Canadian Style