Categories
Financial Planning

Tax Rules for Home Buyers

First Time Home Buyers Image courtesy of photostock at FreeDigitalPhotos.net[/caption] If you’re one of the many Canadians who dream of home ownership, and you’re working hard to make this goal a reality, you should know that the Canada Revenue Agency has two programs that can help you get there faster. There is the First Time Home Buyers’ Plan. Because the required down payment on a house purchase can be a stumbling block, the government will actually let you borrow the money to put down on your dream home – from yourself. Under the rules of this program, you are allowed to take money out of your RRSP to help buy your home – up to $25,000. This money will remain sheltered from tax, so long as you pay it back within 15 years. This is a great way to put your retirement savings to work for you today, without the considerable tax consequences of withdrawing it outright. The only downside is that you won’t be earning interest on your investment, but that might be outweighed by the interest cost saved by using your own money instead of a loan. Another helping hand for new homeowners from the CRA is the First-Time Home Buyers’ Tax Credit on your tax return. It’s a non-refundable tax credit that can put money in your pocket by reducing the amount of tax you owe for the year in which you buy your house. Both of these programs are for first-time buyers only, and are designed to help you get yourself into the real estate market. If you have questions about these programs (or any other areas of estate planning or financial management), contact YourStyle Financial Inc. We take the financial stability or our clients very seriously, and can help you get your financial house in order, so you can get into the house you want. We’re more than an investment company – we tailor financial plans individually, to fit each one of our clients. If you’re thinking about jumping into the real estate market, we can help make sure you do it with both eyes open.]]>

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Financial Planning

Manulife's Are you ready? – The Call

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Financial Planning

Manulife's Are you ready? – The Meeting

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Financial Planning

Manulife's Are you ready? – The Ride

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Debt Management

What is the True Cost of Debt?

you have now is $85 that is lost. Today, that sacrifice may be two nice meals out – something we can all manage without. If that money was put into an RRSP, however, it grows over time and potentially that $85 becomes $125 by the time you retire (again, these are arbitrary numbers and do not reflect any interest rate predictions). Sure, by that time, inflation being what it is that may be the same cost for your two nice meals out, but it can also be a gift for grandkids or a tank of fuel to drive out to cottage country. Looking at this scenario, you can start to see where debt can be better alleviated by lump sum payments rather than sprawl over time. Bear this in mind when looking at sudden income increases like a bonus at work or tax credits.]]>