There is no blanket CRA workbook rule requiring rental income to directly pay every rental expense. In some situations, investors may use a re-advanceable line of credit to cover eligible rental costs, helping manage cash flow while keeping funds available for other uses. The key tax principle is the purpose of the borrowed money: when funds are used to earn rental income, the related interest may be deductible, subject to Canadian tax rules. Maintain a clear paper trail, avoid mixing personal and investment borrowing, and consult a qualified tax professional before implementing this strategy.
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