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A.5 Introducing tax deductibility of interest payment into the Canadian tax system would help to increase home ownership in this country, especially among low- ncome households.

indicate whether it's true, false or uncertain and explain the reason.

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Answer #1

"True"

If the government is allowing tax deductibility for the poor household then they can take the loan even when the interest rates are high. It will increase the demand for housing loan in the market and with it the house ownership will increase. People will buy more home because the loans are much cheaper for them now.

This will especially work for the households which are in the lowest bracket of taxes.

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