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My question is: Canadian-specific
QUESTION: okay, so here it is,,,,
if i bought a heritage house and i ,,lets say put 7-10 % down,
and i want to convert my rsps to chuck at it while interest is
low, is this a good plan and is this tax deductible, if i say
borrow money back as per an article i read in your book,, (
actually given to me by me realtor),, the property is in Mission
B.C.. and i want to convert it to a biz as well as my main
living quarters,,it has 3 suites right now.. is there any
possibilities,, i am just starting out in this venture, and any
info would be great.
thanks and i look forward to a reply.
D
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david ingram replies:
If you have not owned another home in the last five years, you
can borrow up to $20,000 from your RRSP and use it to buy the
house if you are going to live in it.
You must then pay back 1/15th of the borrowed amount each year
for the next 15 years. If you do not have the money to put into
the plan any year, you would add that amount to your income for
the year.
Depending upon your tax bracket and if you have more than $20,000
in your RRSP, you could always cash in more to put into the
house. If your other income is over $30,000, this is not likely
a good idea.
"NO" money put into the house, whether from an RRSP or from your
private funds is a deduction when you buy the home or do repairs
that you planned on doing when you bought the house.
Any R & M (repairs and maintenance) which becomes necessary
"AFTER" you have started renting, would be deductible on a
pro-rata basis for repairs to the entire house (roof, furnace,
etc.) or 100% for the amounts spent on the rental area of the
house.
Congratulate your realtor on their good taste in books.
I have added your name to the email list
david ingram - [email protected] <mailto:[email protected]>
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 913-9133 - (604) 913-9123 www.centa.com
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