Tag Archives: income


Residential rental property – a good investment?

What are the first things you should ask yourself before buying rental property?
First of all, will you live there or not? From a fiscal point of view, if you are renting out the entire property, you could deduct all of the day-to-day expenses related to the building from your income. But if you’re an owner-occupant, only expenses related to the rental units will be deductible. On the other hand, when you go to sell, the portion of the building occupied by the owner is exempt from capital gains tax. If it is completely rented out, all of your capital gains will be taxable.

In addition, when you have a specific property in mind, you need to consult the assessment roll to ensure that the number of units on the realtor’s listing is correct. If a livable basement is considered to be a dwelling by the city, this counts as one more unit. If this is the case, you might have to make a bigger downpayment.

Speaking of which, how much of a downpayment do you need for this type of purchase?
If you’re renting out all of the units, you need to make a minimum downpayment of 20% of the building’s purchase price.

If you’re going to be an owner-occupant, you could lower the downpayment to 5% of a duplex’s purchase price with mortgage loan insurance. For a triplex or quadruplex, you’ll need to put down a minimum of 10%.

The rules are the same for all Canadian financial institutions. Continue reading

Can the value of a home replace an RRSP?

According to TD Bank Group, the answer is no. “Even if selling your home is a great way to increase your retirement income, and unless you want to adopt a much simpler lifestyle, it probably won’t generate enough money for your entire retirement. It’s important to have access to savings funds and additional investments, such as an RRSP, a TFSA, pension benefits or shares,” states a press release where, in conjunction with a questionnaire, the institution unveils the results of a survey on beliefs about retirement in Quebec.

It’s true that the net worth of a home represents a significant amount. Until recently a house could provide the owner with a comfortable cushion, but that no longer holds true today. Continue reading