Mortgage Interest Tax Deduction -> Makes Sense

A small number of countries like the US, the Netherlands and Switzerland allow homeowners to deduct mortgage interest from their taxable income. Most countries do not - the UK (although they once did), Canada and most others. Why should they - these are some reasons:

  • it promotes home ownership;
  • for the same reason that corporations can deduct interest expense - it is a required productive asset (in this case to live and potentially raise a family);
  • it levels the playing field slightly between the residents/taxpayers of a country and wealthy foreign buyers (non-taxpayers in that country) and reduces crowding out of domestic population;
  • it is a clean and easy to follow deduction that can be verified with a bank (many others are much more objective).