Sent: Wednesday, November 23, 2005 9:09 AM
To: taxman at centa.com
Subject: Re: Money out of RRSP for son's condo - ask
international non-resident income tax expert preparation &
immigration consultant david ingram, experts on rentals mutual
funds RRSP RESP IRA 401(K) & divorce CKBD 600AM 9 AM Sunday on
Fred Snyder's
In respect to the question and answer listed bellow. Is it
possible for a Canadian resident to use funds from RRSP account
to invest in secured 1st mortgage? Self-directed RRSP account
allows mortgage investments, so why not advance the funds in a
form of a mortgage?
Your comments would be appreciated.
Thank you,
==========================================
david ingram replies:
Yes, they could do that but they are now caught up in CMHC rules.
Dad has to pay CMHC fees and charge CMHC rates which are likley
higher than the son could get a traditional mortgage at and lower
than dad would like as a return on his RRSP.
I could make a better argument for dad to just cash in XX
dollars, pay the tax and give the net money to his son for the
down payment or take a 10% or 20% piece of the house as tenants
in common. His share of the house would be taxable but only one
half. When his son gets in a better poisition, he can remortgage
and buy dad out or just leave dad there for a while. If the s9on
happens to end up in a divorce, that part fo the house would not
be a family asset and would stay in the family.
What this person needs is a FREE written financial plan with all
the parameters involved. He or she can get that by attending one
of
Fred Snyder's seminars. This next Thursday's seminar is on Part I
of buying a house. Details are as follows
Every Thursday Evening, Fred Snyder of Dundee Wealth Management
conducts one of 17 different financial seminars in the boardroom
of his office
Time: 7:00 to 9:30 PM
Date: Every Thursday evening
Place 1764 West Seventh
Vancouver (corner of Burrard)
Phone (604) 731-8900 to register
No cost - no obligation
Topics always cover mortgage interest as a deduction
other topics - getting the mortgage, estate planning, critical
care insurance, income taxation, differences between stocks and
bonds, and usually the most innovative HELOC mortgage offered in
Canada from Manulife Bank
If you are starting in downtown Vancouver and do not want to go
home first, one of the excellent THAI HOUSE restaurants is in the
same building and makes a nice start to the evening.
I, david ingram, will be at one Thursday only. That will be the
Thursday Night following the last Sunday of the month to cover
mortgage interest as a deduction and give the class an adding
test.
.
centapede at lists.centa.com wrote:
My question is: Canadian-specific
QUESTION: I would like to assist my son buy his first property,
condo, or
single family home. How is the best way to do this without
triggering
income tax if the money I propose to use for this would need to
come out of
my RRSP? Can monies loaned to a son or daughter for the purpose
of real
estate as a principal residence considered immune from tax?
---------------------------------------------------------------
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david ingram replies;
Any money taken out of an RRSP is taxable at the top of your
tax rate
"UNLESS" it is taken out to buy your first home or home for a
disabled
relative. If your son is not disabled, you can only withdraw
money that is
taxable.
You can read more about a Home Buyer's Plan withdrawal at:
http://www.cra-arc.gc.ca/tax/individuals/topics/rrsp/withdrawals/
hbp/menu-e.
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