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WHAT IS A MIC?

 

A Mortgage Investment Corporation (MIC) is comprised of a large and diversified mortgage portfolio, that provides a safer way to invest in the real estate market, avoiding the risk that comes with investing in individual mortgages. Investors have the opportunity to purchase shares in the MIC, which will pool their funds and invest this capital in mortgage loans. A MIC is a special entity created under Section 130.1 of the Canadian Income Tax Act, enabling investors to invest in a pool of mortgages. The act requires that 100% of the MIC’s annual net income be distributed to its shareholders by way of dividends. These dividends are a flow-through of the interest earned by the MIC’s mortgage portfolio and are taxed as interest income to individual investors.

 

Regiis Capital, the manager, is responsible for all aspects of the MIC’s operations. This includes sourcing of suitable mortgage investments; analysis of mortgage applications; and negotiation of suitable interest rates, terms and conditions, solicitor instructions, mortgage portfolio and general administration.

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Individual Investor

Purchase Preferred Shares

Receive Dividends. 100% of Net Income

Regiis MIC

Issues  Mortgage Loans

Mortgage Payments

Portfolio of Private Mortgages

1st & 2nd Mortgages

GTA Region

Private Mortgage

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Private Mortgage

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Private Mortgage

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Private Mortgage

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Private Mortgage

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Private Mortgage

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Private Mortgage

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Private Mortgage

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  • A Mortgage Investment Corporation must have at least 20 shareholders.

  •  A MIC is generally widely held. No shareholder may hold more than 25% of the MIC’s total capital

  • At least 50% of a MIC’s assets must be comprised of residential mortgages, and/or cash and insured deposits at Canada Deposit Insurance Corporation member financial institutions.

  • A MIC may invest up to 25% of its assets directly in real estate, but may not develop land or engage in construction. This ceiling on real estate holdings does not include real estate acquired as a result of mortgage default.

  • A MIC is a flow-through investment vehicle and distributes 100% of its net income to its shareholders.

  • All MIC investments must be in Canada, but a MIC may accept investment capital from outside of Canada.

  • A MIC is a tax-exempt corporation.

  • Dividends received with respect to directly held shares, not held within RRSPs or RRIFs, are taxed as interest income in the shareholder’s hands. Dividends may be received in the form of cash or additional shares.

  • MIC shares are qualified RRSP and RRIF investments.

  • A MIC may distribute income dividends, typically interest from mortgages and revenue from property holdings, as well as capital gain dividends, typically from the disposition of its real estate investments.

  • A MIC’s annual financial statements must be audited.

  • A MIC may employ financial leverage by using debt to partially fund assets.

Income Tax Act, Section 130.1 - Summary of Rules​​​​​

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