What is a “MIC”
What is a Mortgage Investment Corporation (MIC)?
Mortgage Investment Corporations (MICs) were created by the Federal Government in 1973 to allow investors to participate in a pool of mortgages secured by real property. MIC shares are a qualified investment for registered plans such as RRSP’s, RRIF’s, LIRA’s. TFSA’s and RESP’s. MICs are a flow-through investment vehicle and as such must distribute 100% of their net income to shareholders.
MICs are also guided by and subject to certain investment requirements, some of which are:
- Investments must be mortgages on real property located in Canada.
- At least 50% of the mortgages must be against residential properties and/or cash and insured deposits at CDIC member financial institutions such as banks and credit unions
- Dividends not held within registered plans are taxed as interest income in the shareholders hands and can be distributed in cash or additional shares.
- No more than 25% of a MIC’s assets may be invested directly in property.