Other than an RRSP, the great Canadian Tax Shelter is the primary residence, or your house, especially if the mortgage is paid off.
As the value of your house rises, so does your retirement fund. When the time comes to retire, you can sell your house and pocket the equity.
The Canadian government does not touch the capital gains you make when you sell your house, and for that reason, it is a sound, tax-free investment.
When deciding how much to invest in RRSP each year, why not look at a minimum investment such as $2,000 for the year, and put $2,000 or whatever you can afford, per month in a house? Both investments will grow, and if you choose wisely, the house should appreciate faster than the RRSP.
Even if you decide to stay in your house after you retire, if it’s paid for, your cost of living will be less. No mortgage payments, no rent.
There are only three things to remember when buying a house:
1. Location
2. Condition
3. Price
If you are buying a first home, and can afford to purchase a new home in a nice neighborhood, this is the best investment you can make.
Not everyone can afford a new home, so be careful to buy a well maintained home in a good residential area.
It is extremely important to work with a professional realtor to make sure your investment is sound. A good realtor will know the community, and know the market values of the houses in the area. Get a market evaluation of the area from you realtor. Get any information on the zoning, the covenants, the future development, etc. In other words, do your homework. This is the biggest investment you will make.
Recent Comments