Obtain a Tax Refund On Your Home Purchase Using Your RRSPs
The Federal Home Buyer’s Plan allows first time home buyers use up to $20,000 of their RRSPs for the purchase a home. For a couple, the amount is doubled to $40,000. If you are in the market today, making use of this privilege may allow you to obtain a significant tax deduction. The optimum time to make use of this benefit is before February 29, 2008. A contribution before this date will allow you to obtain the deduction on last year’s income resulting in a tax refund.
Say, for example, you make a $40K investment in an RRSP today and you are in the 30% marginal tax bracket. You would could obtain a tax refund cheque for $12000 (or 30% of $40K). This is nothing to scoff at.
Be sure to consult your financial adviser before proceeding with any investment. Please call me if you need more information or clarification.
February 4, 2008 at 1:18 pm
I formed a company majority owned by my foreign partners, we purchased two apartments as in investment property but not rented because we want to sell them. Unfortunately the price today is not profitable to us so we continue to pay the mortgage interest, property tax & maintenance fees. QUESTION: are the mortgage interests, maint fees, property taxes & other expenses or cost during the purchase of these investment properties that accumulate to date are tax deductible? appreciate your expert opinion.
thanks
letty
February 4, 2008 at 7:48 pm
Hi Letty, It sounds like these costs should be tax deductible. However, this is a question for your accountant. Mortgage brokers will know a great deal about finance but we do not profess to be experts in taxation. John