What is a Mortgage Investment Corporation?

Mortgage Investment Corporations (MICs) were created by the Federal Government in 1973 to allow investors to participate in a pool of mortgages on real property. MIC shares qualify for registered plans such as RDSPs, RRSPs, RRIFs, TFSAs, and RESPs. MICs are a flow-through investment vehicle and as such must distribute 100% of their net income to shareholders.

MICs are also subject to investment restrictions, some of these are:

  • Investments must be mortgages on real property located in Canada
  • At least 50% of the mortgages must be against residential properties, including multi-residential, and/or cash and insured deposits at Canada Deposit Insurance Corporation member financial institutions such as banks and credit unions.
  • Dividends not held within registered plans are taxed as interest income in the shareholder’s hands and can be paid in cash or additional shares.
  • A MIC cannot construct buildings or develop land, and no more than 25% of its assets may be invested directly in property.