TaxTips.ca - Borrow to Invest Calculator

Input data into the yellow input fields, tab to the next field or press the calculate button.
The calculator uses 2023 tax rates, which are used for all years.
Make sure you review the Details page (with a wide screen!) to see the possible income reduction, which may be significant.
1	Start year		2023
2	Choose province or territory from drop-down list
3	Your approximate taxable income per year
4	Estimated annual % increase in income in future years
Borrow to purchase investments
5	Amount borrowed
6	Borrow the money over a period of how many years? (1 to 10)
7	Interest rate
8	Amortization period in years, starting after borrowing period (0 to 20)
	- choose 0 years if you would like to pay only interest for the entire time
% of investments in:
9	Canadian stocks/ETFs eligible for enhanced dividend tax credit
10	Other stocks
Rates of return on investments
11	Estimated total annual return including capital gains and dividends
12	Dividend yield on Canadian stocks/ETFs eligible for enhanced dividend tax credit
13	Dividend yield on other stocks/ETFs
14	Average annual capital gains (unrealized until investments are sold)
	- on Canadian stocks/ETFs eligible for enhanced dividend tax credit
	- on other stocks/ETFs

15


16	Difference per year
17		A
18	Balance of investments	B
19	Outstanding loan balance	C
		A + B - C
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Tax is not payable until investments are sold.
Dividends are not reinvested.
Does not include: Foreign w/h taxes / foreign tax credit; NT & NU cost of living tax credit; ON health premium; low income tax reductions; QC HSF contributions or prescription premiums.
Includes Federal, Yukon & Nova Scotia additional personal tax credits where applicable.
Tax rates used are rates known as of May 30, 2023.
Tax Tip: Borrowing to Invest should not be done by a novice investor!

Non-registered Investments and Debt

Non-registered investments in stocks & ETFs
using borrowed funds

Tax Calculation

Net Disposable Income Calculation
& Balance of Investments Less Loan

Results with no borrowing

Difference Borrowing less No Borrowing

Net Disposable Income
Annual Avg to Date

Yr #

Regular
Income

Inv.
Buys

Actual
Cdn
Dividends

Other
Dividends

Cdn
Stocks

Other
Stocks

Investments
Balance

Inv
Cost Basis

Interest
Expense

Taxable
Income

Tax
Payable

Loan
Payments

Net
Disposable
Income

Loan
balance

Inv-Loan
Balance

Tax
Payable

Net
Disposable
Income

Net Disp.
Income
Difference

Incr in MV
Investments
Net of Loan

Net Annual
Gain

Cumulative
Gain

Borrowing

Not
Borrowing

TaxTips.ca Borrow to Invest Calculator

1	Start year
2	Choose province or territory from drop-down list
3	Your approximate taxable income per year
4	Estimated annual % increase in income in future years
Borrow to purchase investments
5	Amount borrowed
6	Borrow the money over a period of how many years? (1 to 10)
7	Interest rate
8	Amortization period in years, starting after borrowing period (0 to 20)
	- choose 0 years if you would like to pay only interest for the entire time
% of investments in:
9	Canadian stocks/ETFs eligible for enhanced dividend tax credit
10	Other stocks
Rates of return on investments
11	Estimated total annual return including capital gains and dividends
12	Dividend yield on Canadian stocks/ETFs eligible for enhanced dividend tax credit
13	Dividend yield on other stocks/ETFs
14	Average annual capital gains (unrealized until investments are sold)
		- on Canadian stocks/ETFs eligible for enhanced dividend tax credit
		- on other stocks/ETFs

15


16	Difference per year
17			A
18	Balance of investments		B
19	Outstanding loan balance		C
			A + B - C
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TaxTips.ca Borrow to Invest Calculator