A Mortgage Investment Corporation (MIC) is a lending company designed specifically for mortgage lending in Canada. Owning shares in a MIC enables investors to participate in income from a diversified and secured pool of mortgages. Shares of a MIC are eligible investments under the Income Tax Act (Canada) for RRSPs, RRIFs, DPSPs, or RESPs and TFSAs.
A MIC mortgage portfolio can include everything from a small second mortgage on residential property to commercial and development mortgages on new projects. A typical MIC loan does not exceed 75%-85% of the current value of the property. The rules for MICs, which are flow-through instruments (meaning that tax is not paid by the company, only its investors), are found in the Tax Act, and include the following:
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