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From a practical perspective, Mortgage Investment Corporations are similar to Investment Funds, although not publicly traded. While Investment Funds invest in equities, Mortgage Investment Corporations invest in mortgages.


Mortgage investments offer a very real and significant advantage over equity investments; mortgages are legally secured against the real estate of the borrower. That security provides collateral for the debt obligation.

Why are Mortgage Investment Corporations (MICs) such a compelling choice for Canadian investors?

Mortgage Investment Corporations:

•  Distribute all net interest income to investors
•  Offer favorable tax treatment if held in a registered investment
•  Spread risk across a pool of mortgages instead of an individually held
•  Are professionally managed

Shares of MICs must also be widely held ensuring accountability and transparency.

MIC’s must have a minimum of 20 investors, and no one person can own more than 25% of the shares of a MIC.

Mortgage Investment Corporations are governed by the tax regulations of Section 130.1 of the Income Tax Act of Canada and are treated for tax purposes as a “flow-through” entity. As such, the income of a MIC is not subject to corporate income tax. Accordingly, the income of the MIC, after expenses, “flows-through” and is paid directly to the shareholders. It is the shareholder who pays tax on the interest income. This “flow-through’ advantage result in more income in the hands of the shareholders and avoids the “double taxation” that occurs with most investments.

Shares of a MIC are qualified investments under the Income Tax Act (Canada) for RRSP, TFSA, RRIF, RESP and LIRA investments.

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