The inheritance

What a sob story. And a lesson.

Christine moaned to one of the Van papers that the house which has been in her family for eight decades must be sold. Mom died at 87 and left it to her five children-beneficiaries, Christine included. The trouble is the place granddaddy Domenic Liberto built in 1939 is now worth $1.7 million, because the world has lost its mind.

None of the five kids can afford to accept the house, since doing so would mean each of the other four must receive their $340,000 share. Christine lived in the place for two decades caring for mom, but she’s not willing to walk into a $1.36 million mortgage to pay off her siblings. Thus, the listing.

“The sad thing is the home is 80 years old and it’s been in our family from when it was built — it’s the first time selling it since my Grandpa built it. We tried to buy it. We’ve been saving like crazy and, of course, my inheritance on the house would have brought the price down a little bit more, but there’s just no way we can afford a home at that price right now. In our 60s now, we don’t want to consider a big mortgage for a long period of time.”

With real estate values in many places off the chart, passing on a house or a cottage is way more complicated than in the past. If there are multiple kids left behind, then not figuring this out in advance can lead to conflict, heartache, financial hardship and splintered families. As this blog has said before, money changes everything.

Christine’s family must give up the home they’ve had for 80 years. The reason? It’s worth $1.7 million and her mom made a mistake.

.

So what could C’s mom have done to keep the pile of sticks in the clan?

Of course she could have transferred ownership of it to one child prior to death, but that wouldn’t have solved much. The lucky kid would still have to mortgage the place at 80% LTV to pay off the others. She could have changed the deed to put them all on title, allowing one kid to live there as a part-owner. But that would require an agreement between siblings so one could not trigger a sale without consent. More importantly, if any of the kids already have homes, putting them on title would trigger capital gains tax in their hands (you can’t have two principal residences). Bad idea.

A better option is to use insurance. After all, everybody knew mom wouldn’t live forever and that the family home had appreciated wildly in value. So by insuring mom’s life enough tax-free money could be generated from an insurance policy to pay the other four kids a few hundred thousand and leave C the house with a more modest mortgage in return for her two decades of care-giving. Of course it’s only fair that Christine would pay the hefty insurance premiums in order to reap the benefit. But it would hang onto the asset.

To insure someone else’s life you need their consent, plus an insurable interest in that life. That means if they were to croak, you’d suffer a loss. So, taking out a policy on a friend or colleague who enjoys a Donald Trump lifestyle and you believe is doomed won’t cut it. Insuring your spouse or your parents (or your business partners) is okay.

Using insurance to deal with a cottage transfer is a sound strategy, too. A rec property is not usually a principal residence so all of the appreciation over years (or decades) is likely subject to capital gains tax. If a parent puts a child on title, it’s a taxable transaction. So better for the elder to retain title and the child to pay premiums on a policy great enough to handle the tax when the inevitable occurs.

If there are multiple siblings involved, the parents can take out a last-to-die policy which will pay out a tax-free wad to some kids while another gets the real estate. Everybody’s happy. No family meltdown. No lawyers fighting. Harmony.

Key to all of this is planning. Don’t die without a will. Don’t appoint your children as executors (if you want it done correctly and fairly). Have a strategy for passing on real estate and other capital assets, like an investment portfolio (you can give money tax-free, but not stocks). Make sure you and your spouse exchange POAs for each other, then have secondary ones done to cover all eventualities.

Talk to your adult children about what they want and expect. Just saying your estate is to be divided equally can create a quagmire and heartbreak, as Christine will attest. Get some help to figure this out – a good advisor doesn’t just manage money, but will also organize your life. Even your death.

Or you can buy a Harley, blow it all and check out with nothing but a smile. Maybe the kids were overrated anyway.

177 comments ↓

#1 the ryguy on 04.16.18 at 6:13 pm

Great advice garth.

But lets not bust out a go fund me page for this woman, yikes we really are talking about 1st world problems.

Sell it, split up the dough.

They should all be thankful that the Vancouver RE house of cards hasn’t crumbled yet.

#2 Pepe Le Pew on 04.16.18 at 6:13 pm

Another Buyer bites it big time

Link deleted, as this site respects the personal privacy of posters. Blog dog code. – Garth

#3 -=jwk=- on 04.16.18 at 6:19 pm

LOL, sure it is. Toronto is the closest resemblance to NYC that canada has wether you like it our not. Obviously don’t live in Toronto nor have you been there you old curmudgeon.

And you clearly have never lived in NYC. I have and as someone else pointed out, Montreal is FAR closer to NYC – rich history, deep culture – than Toronto is. Toronto’s history starts, effectively, July 24 1967. Before that it was nothing. In reality, still is a nothing on the global scale, at least nothing like NYC.

#4 You know Val on 04.16.18 at 6:19 pm

Hey Garth, what’s your opinion on the next BOC move? Thanks

#5 Mark on 04.16.18 at 6:27 pm

Never understood the often-given recommendation to ‘buy insurance’ against the future payment of taxes. Don’t insurance policies typically have huge embedded management fees? If one intends to inherit a particular piece of property with sentimental value that is to be split amongst heirs, why not save in a personal balanced portfolio, as Garth advocates?

Besides, could anyone really have, say, a decade or two ago, predicted that we’d have Toronto/Vancouver RE priced at the extremities reached in 2013?

The problem these siblings face, unfortunately, is that there might be some unrealistic expectations amongst some of the heirs as to the value of the house. Especially if one or more of them has been taking advice from a “pie-in-the-sky” Realtors who is not familiar with the falling market nor the impact of the sales mix in the post-2013 era on pricing. This could lead to a lot of strife and indecision, which would invariably leave a lot of value on the table as the market continues to fall. Maybe someone more learned in Estate law could explain/delineate the sort of authority an Executor has to “make a deal” when it comes to liquidating a hard-to-value, and illiquid asset such as RE.

#6 Pepe on 04.16.18 at 6:27 pm

Another Buyer bites it big time

Link deleted, as this site respects the personal privacy of posters. Blog dog code. – Garth

######################
It was a Toronto Star link about “Couple ordered to pay $470,000 after reneging on Ontario home deal”.

#7 Willy H on 04.16.18 at 6:27 pm

Christine lived in the place for two decades caring for mom, but she’s not willing to walk into a $1.36 million mortgage to pay off her siblings.
__ __ __ __ __ __

Christine, in my opinion, is entitled to a greater share of the estate for her 20 years of care-giving* (assuming she did this full time as she has sacrificed potentially larger earnings working for herself. We don’t have details, but if this care was essential to keeping her mother in her home vs very very expensive care in a nursing home, this would further bolster her case.

There are a couple of other solutions.

>The children who took a lessor role in care-giving could willingly forfeit part of their inheritance passing it onto the care-giver for his/her sacrifice. It’s the right thing to do if the situation warrants.

>Should the mother have been encouraged to pay the care-giving child a salary over part or all of the 20 year care-giving period compensating her for her efforts. In effect, passing on part of the inheritance while living.

>The home may be the most valuable estate asset, but what about other savings and investments? Could these be juggled to somehow keep the house in the family?

Of course we don’t know enough details and care-giving provided by family members can be a very complicated affair.

However, most of the time, the burden seems to fall on one child.

*not legally entitled, but morally and ethically entitled.

#8 Musty Basement Dweller on 04.16.18 at 6:29 pm

I don’t get it what’s the big deal with selling the house at an obscene profit and splitting it up amongst the siblings? Wow boo frickity hoo hoo hoo.

#9 Honey Dripper on 04.16.18 at 6:30 pm

Great advice again today!

When I got married the second time, my new wife asked me why I didn’t have much money saved.

I said “well I spent 50% of everything on booze and women, the other half I just wasted”.

My kids aren’t getting much about as much as my 88 yr.old will be leaving us.

#10 Reynolds531 on 04.16.18 at 6:30 pm

This is not a 2018 problem. Look at the habitants farms along the street Lawrence river in Quebec.

#11 Cto on 04.16.18 at 6:30 pm

Is that the pic of the house in question? 1.7 million? That little house is 1.7 million dollars??? They need to sell it as soon as possible pocket the cash and get the hell out of Vancover! Nearly $400,000 will buy you one hell of a nice Cottage Indy interior somewhere! Truly people of gone mad!

#12 David Dudek on 04.16.18 at 6:32 pm

Insurance is key in Estate planning. Crucial to set it up early enough while everyone is insurable and the premiums managenable. It gets difficult once a certain age barrier is crossed. Witness this quote often as it is getting more difficult to secure coverage once you reach that booked age and come with medical baggage.

My advice, everyone should get at least a term policy, make sure its convertible to a permanent plan without medicals. Aim for the reputację companies that have been around and will be around in the future so that you can actually convert once a medical crisis strikes.

#13 Cto on 04.16.18 at 6:34 pm

Is Vancouver is anything like Toronto, the only reason one should live there is if they have a really good job $200,000 a year plus. Otherwise it’s far more worth it to live in other cities and towns in Canada it offered just as many services and a great lifestyle.

#14 vanreal on 04.16.18 at 6:35 pm

I went to the open house at this place on the weekend. It was very crowded. The house needs a lot of cosmetic work but I am almost sure that it will sell over asking. It’s in a great area of the city, very close to downtown

#15 Cto on 04.16.18 at 6:36 pm

I am aware of many many professional people including Engineers who refused to accept vacant positions in Toronto because the cost of living prohibits the lifestyle that they’ve been used to outside of the city.
And OPG engineer with Canadian experience is offered a position in the Toronto area refuse is it because of the same pay in North Bay get some way more and a much better life. Why why should anyone want to move to Toronto.

#16 Bezengy on 04.16.18 at 6:36 pm

I think a lot of people are going to become very familiar with schedule 3 on their income tax return (Capital Gains on real estate). The days of non-reporting or cheating the tax man have come to an end as governments have realized they are sitting on a goldmine in tax revenue with real estate appreciation on non-principal residences. Good luck to those that don’t think they need to report.

https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-sold-your-home-cra-may-penalize-you-if-you-fail-to-report-it/

#17 Andrewski on 04.16.18 at 6:36 pm

A friend of mine has 2 siblings, one of which is the main caregiver for their remaining parent. The caregiver sibling does not work, lives with the parent & lives very well off of the eventual inheritance destined for the 3 siblings. To the best of my knowledge, the parent has no life insurance & is uninsurable. The other 2 siblings work & are concerned that the caregiver sibling is more than spending her (eventual) inheritance now. The family dynamic is totally jacked, to the point of current estrangement. Mo’ money, mo’ problems!

#18 Zapstrap on 04.16.18 at 6:37 pm

Did you all notice the fence? Maybe old Domenic was a pipe-a-fitter. Maybe made a little vino in the back lane with his friends too. Classic old school … East Van. Still a few left … along with a few corner stores and a very few cobblestones.

#19 Hope & Ruin on 04.16.18 at 6:38 pm

Gran should’ve left a greater portion of the house to the child who stayed with her in her later years.

If the adult children (double entendre intended) had any empathy they would enforce such an agreement.

#20 crowdedelevatorfartz on 04.16.18 at 6:42 pm

I suppose if the kids are that attached to the house several of them could pool together to buy out the other siblings….and then rent the house out to pay part of the ensuing mortgage…..
Either way.
Sad but not surprising in this over inflated , unaffordable market..

#21 young & foolish on 04.16.18 at 6:43 pm

Hmmmm ….. I better have a chat with my grandad about all those slanty semis

#22 paracho on 04.16.18 at 6:46 pm

Another great article. Insurance works well up until payout time. The you need a lawyer to get the Insurance company to pay out…but even then it works out better than the above scenario.
Not in rhythm with today’s topic but dealing with previous topics..in today’s Toronto Star
https://www.thestar.com/news/gta/2018/04/11/couple-ordered-to-pay-470000-after-reneging-on-stouffville-home-deal.html

#23 Nonplused on 04.16.18 at 6:46 pm

“Or you can buy a Harley, blow it all and check out with nothing but a smile. Maybe the kids were overrated anyway.”

Increasingly a wise decision in a world with stagnant wages, persistent inflation, skyrocketing taxes, constant war, and insane house prices. At some point the average person just has to conclude that there isn’t the estimated $150,000 in after tax expenses required to raise a child in the budget. Children aren’t a right. Blessing maybe but not a right. So at some point it makes sense to admit you just don’t have the capacity, Turdeau and the like have taxed it all away. Anyway with all the automation, is it possible to even foresee how junior is going to look after himself 21 years from now? The kids can’t now.

Anyway I don’t see what’s so sad about Christine’s story. Selling the house is pretty typical upon death. That’s what happened to my grandmother’s house and she’d been in it since it was built too.

The way I would look at it is the kids are lucky to be splitting $1.7 mil. A $340,000 injection can be a game changer for most people. They are lucky mom hadn’t already sold the house, moved into a care facility, and blown the remainder on cruises and bingo.

The only issue I see here is that Christine should have been compensated by the other siblings for the care she provided. It could have been in part free rent from her mom or some other sort of sweeteners including possible cash. But unfortunately that should have all been worked out in advance. Never hope that your service will be rewarded in the will, get the cash monthly, even if it’s just free or cheap rent. That’s worth something.

#24 Lost...but not leased on 04.16.18 at 6:47 pm

Re Insurance Policies..

I would submit many people may find it morbid…perhaps even leary that some “accident” may happen to them sooner than later.

Finally…what age should the party (Christine’s Mom)
be for insurance eligibility…..there must be a cut-off age.

#25 Whatcha Minnie on 04.16.18 at 6:49 pm

I love animals and helping people. A couple of years ago I adopted a labradoodle named Millie, and began visiting an elderly shut-in neighbor with her. My neighbor loved her, and it was clear from the start how much joy she brought him. This gave me the idea of devoting some time each week to training therapy dogs at my local shelter. I’m now a certified dog trainer, and currently spend four hours every weekend training therapy dogs. I also occasionally get to take them to local nursing homes for resident visits.

#26 Smartalox on 04.16.18 at 6:56 pm

The reason for this woman’s sadness is that the family house has to be sold, is that it? There’s no mortgage on the property, no ‘reverse’ mortgage that Nonna’s been using to liquidate the equity in the house, leaving the heirs high and dry – or leaving one sibling on the hook for the bill to make the others whole?

What’s the problem, here? Have the estate sell the property, everybody gets an inheritance.

If this story takes place in Vancouver, the value is in the land, not the buildings. If the kids sell the property to a developer, they might let the kids keep the house itselfitself,n for the cost of moving it.

Then the kids can love the horsehair plaster and asbestos tiles all they want, on some plot of land in a cheaper jurisdiction.

And that won’t be Vancouver: after Trudeau’s failue to bring Horgan to heel on Sunday, Notley and the Albertans have decide to throttle BCs fuel supplies. Gas over $1.50/L as profiteering sets in. Meanwhile Trudeau’s in Paris spending carbon dollars, while his father’s legacy lies in ruins.

#27 B20 Bust on 04.16.18 at 7:00 pm

Looks like the GTA is heating up again.

It looks like Garth called it – your buying opportunity in the GTA has passed if you sat on the sideline.

So much for that little 20% ‘correction’ which looks like a little blip on the path to higher prices.

After a 250% gain in the last 10 years, things were bound to pull back for a bit – just like the stock market. And like the stock market, consolidatiokn is great before the price ascension.

https://www.msn.com/en-ca/money/homeandproperty/gta-housing-market-poised-for-spring-thaw/ar-AAvWruj?li=AAggNb9&ocid=mailsignout

#28 renter in Surrey on 04.16.18 at 7:02 pm

here BoC favorite move

https://youtu.be/iDVuQi4gdtk?t=56

#29 Alberta Ed on 04.16.18 at 7:17 pm

Better, get a Harley AND an advisor (not necessarily in that order).

#30 Mattl on 04.16.18 at 7:17 pm

#3 Montreal is nothing like NYC economically. And wake me up when NYC has language police chasing businesses out of town.

Listen I’d rather go out for a night in Montreal then almost any city in NA but I wouldn’t start a business or move a corp head office there. Great cafes and peelers, horrible business environment. Compared to NYC? Minnow.

#31 Financial Orchid on 04.16.18 at 7:18 pm

For those wanting to bypass the fees from the insurance policy, one workaround is for the owner to sell the home prior to decease and live in a family member’s home or in an elderly care facility. Basically liquidate all assets near end of life and beneficiaries take cash.

#32 Yanniel on 04.16.18 at 7:19 pm

“she could have transferred ownership of it to one child prior to death, but that wouldn’t have solved much. The lucky kid would still have to mortgage the place at 80% LTV to pay off the others. ” – Garth.

If one (and only one) kid became the owner, why does s/he have to pay anything to the others?

#33 Alan Dee on 04.16.18 at 7:32 pm

Umm who was supposed to pay for the insurance?

If insurance was the answer, realistically they would have needed to start investing in the insurance 20 years ago, when the house was only worth $200K, and the high valuation was not a problem. The other siblings have since invested in their own houses. The daughter who remained at home perhaps got some lodging in return or other benefit.

The ‘problem’ is that for the last 20 years these people have not had a plan, and the other 4 have just been waiting for their ‘share’ …

#34 Hope & Ruin on 04.16.18 at 7:36 pm

5 Mark on 04.16.18 at 6:27 pm
nor the impact of the sales mix in the post-2013 era on pricing.
—————————-

Omfg. I’ve been gone 2 years and the first thing I read is Mark talking about the sales mix. The more things change, the more they stay the same.

#35 For those about to flop... on 04.16.18 at 7:37 pm

Here is the latest assessment of that place.

They are going above and beyond…

M43BC

YearLandBuildingAssessment
2017 $1,550,000 + $38,500 = $1,588,500

#36 Ronaldo on 04.16.18 at 7:40 pm

Typical “tear down” for Vancouver. Most of the value is in the land. They would be wise to sell this thing while there are still greater fools to buy it.

#37 Yaroslav on 04.16.18 at 7:40 pm

Your advice is unusual to say the least Garth.

My parents both had life insurance, from back in the late 1960s, and the payout on each life was nowhere close to being able to cover the cost of their house when I sold it (as the Executor). What kind of insurance policy are we talking? I would hate to see the premiums on that.

They had purchased their house in Calgary for $17,000 in 1971, and it was sold for $380,000 in 2016. Those insurance policies were long since fully paid off…

When both my parents had passed away, it was a 113 year old house, and there were problems with the exterior walls and possibly the foundation.

The person who bought it let it sit for a year, and then likely paid $25,000 to $35,000 to have it torn down, so that they could promptly build a $1.4 million dollar monster home on the same land parcel…

I had two beneficiaries to deal with (in addition to myself). There was no way I was going to pay each of them $127,000, and then take out a mortgage for the place. Not when I was unsure whether I could even insure it. And not when I already had a mortgage on a primary residence…

So I split it 3 ways, as per the will. We each walked away with a modest amount, and no one was wronged.

Being an executor often also takes a hell of a lot of work, when it comes right down to it. Good luck getting someone to do that for you who is not family. I charged the Estate for my time and labour. A trustee would charge you handsomely for that as well.

Christine should have had an arrangement with her mom in writing to pay her for the care that she provided over the last portion of her mother’s life. The house should not figure into that agreement.

I was my mother’s Power of Attorney, Personal Directive provider, and then Power of Estate. I didn’t ever expect to be receiving her house for doing those things. The will was clearly a 3 way split, and I knew the chances of any beneficiary holding on to the house were small.

Christine should have seen that coming, as the Executor. She would have been familiar with the will no doubt.

#38 FLHTK on 04.16.18 at 7:46 pm

Good advice and tips!

#39 slick on 04.16.18 at 7:52 pm

Sorry G, but the insurance scheme isn’t the way to go.
In order for it to work, the insurance should have been purchased years ago. The problem is the house may have only been worth $500K then [or less], ergo buying only $500K of insurance.
The huge increase in house value would outstrip the insurance payout. Mind you, it definitely would tip the decision, but not solve it.
Insurance is cheaper if both parents are insured, with a last top die payout. That second parent can hang on a long time.
I will post later on our insurance plan 30 years ago.

If one of the kids wanted the house, the way to go is buy another comparable property 10 years ago, live in it, then switch when mom dies.

Did you miss this sentence?: “Key to all of this is planning.” Of course these actions need to be taken years in advance. – Garth

#40 Warren Buffett on 04.16.18 at 7:53 pm

When I croak my inheritance is split up evenly between each of my kids and donated to the CHARITABLE ORGANIZATION of their choice.

They can fight over whats left over…..

#41 MP on 04.16.18 at 7:55 pm

Would the appreciation on the house up to the time of death not be considered a tax-free capital gain to Christine’s mom as the principal residence? And should the kids, as beneficiaries, agree to keep it in the family for a few years, do they eventually only pay tax on the difference between the appraised value at time of death and the eventual sale price (if in fact the price goes up not down, and assuming the kids already have principal residences of their own)?

#42 SimplyPut7 on 04.16.18 at 8:01 pm

Unless you know someone close to you that went through this it’s hard to explain to older people they are not going to live forever and need to plan how they want to share their assets before they die.

I have had a few family members go through this, they never expected their health to deteriorate before they could work out how they wanted to split their assets (and share where they hid all of their assets). Or the people they chose to look after their estate were not the best choice and they should have chosen a person not related to them to handle their affairs, instead of their children who only cared about getting as much as possible from the estate when they should be more focused on using their parent’s money to provide the best care for them until they passed.

Everyone assumes the kids will be civilized and everything will go smoothly once they are gone.

#43 Ronaldo on 04.16.18 at 8:08 pm

Here is an example of what one of these old houses are worth in comparison to the lot value. Not much. This is just west of Ontario St. which is the dividing line between East and West side of Vancouver.

https://www.bcassessment.ca/Property/Info/QTAwMDAwMTk1WQ==

Here is what a new build is valued at a few houses over from the above property.

https://www.bcassessment.ca/Property/Info/QTAwMDAwMTk2Ng==

The kids would be smart to dump that thing before the market turns. Eventually all those old places will be torn down. I don’t see much upside on this one.

#44 Baloney Sandwitch on 04.16.18 at 8:13 pm

Christine, Its just a pile of bricks — just let it go – and buy a harley.

#45 Grateful Boomer on 04.16.18 at 8:17 pm

“It’s worth 1.7 million and her mom made a mistake”.

Not sure I understand the tears. Mom lived and died in the house her father (or father In Law) built. …Should mom have sold it 30 yrs ago for 400k and left each offspring say what …50k?….assuming she spent something on herself in her last thirty years?

#46 Legal Stuff on 04.16.18 at 8:28 pm

The costs for the Executor are capped by law, and be careful about any Power of Attorney witnessed by a lawyer as this can be challenged. It must be witnessed by the family medical doctor to be sound.

Incorrect. – Garth

#47 Willy H on 04.16.18 at 8:30 pm

#27 B20 Bust on 04.16.18 at 7:00 pm
Looks like the GTA is heating up again.

https://www.msn.com/en-ca/money/homeandproperty/gta-housing-market-poised-for-spring-thaw/ar-AAvWruj?li=AAggNb9&ocid=mailsignout
___ ___ ___

Huh, this article is realtor infotainment.

The only sources cited are realtor shills.

Not an objective economist anywhere in sight.

This is the kind of propaganda that get’s everyone into bubble trouble. It’s semi-fake news chalk full of cherry-picked stats. Enough to make some Bay Street analyst-promoters blush with envy.

To be fair, there are herds of Greater Fool’s who have been holding back their load for almost as long as this blog’s short and nasty life hoping for the slightest hint in affordability. Folks will make stupid buying decisions all the way up and down the demand curve without heeding basic economic tenants – all assets revert to their mean over time.

Sadly, no surprise here, Canadians, generation after generation, are world class when it comes to investing in over-valued unproductive assets. We are in a class of our own.

This is likely just one of many half-dead-cat bounces as this vampire housing market and interest rates ratchet themselves back to reality as a sharp B20 stake drives deeper into the heart of this monster.

#48 LivinLarge on 04.16.18 at 8:30 pm

Take out insurance to effectively pay off the siblings? Really? Any idea what a $1M policy on an 80 y/o would set you back per month presuming she took out a term policy? She’d be upping the face value every few years to match the house’s appreciation too.

Don’t see any advantage to spending all that cash on premiums when in the end the premiums are come in around the price of the house on an 80+ y/o. All she’s doing is buying the house in premiums rather than a mortgage.

A fancy sounding method sure but really no advantage financially.

Planning. Did you miss that part? – Garth

#49 Happy Housing Crash Everyone! on 04.16.18 at 8:33 pm

#27 B20 SHYSTER Bust

Please tell us another story. You useless morons are FINISHED. Most SHYSTERS are LAZY , useless and dont want to work. How many pretty girls become SHYSTERS just because they are LAZY and uneducated ? Same with lazy useless guys. No education and very little work to make big dollars thanks to a criminal closed system. Once it opens up we will have real competition which SHYSTERS hate. All SHYSTERS do is tell stories. Aka lies.

#50 FOUR FINGERS WATSON on 04.16.18 at 8:36 pm

#25 Whatcha Minnie on 04.16.18 at 6:49 pm
I love animals and helping people. A couple of years ago I adopted a labradoodle named Millie, and began visiting an elderly shut-in neighbor with her. My neighbor loved her, and it was clear from the start how much joy she brought him. This gave me the idea of devoting some time each week to training therapy dogs at my local shelter. I’m now a certified dog trainer, and currently spend four hours every weekend training therapy dogs. I also occasionally get to take them to local nursing homes for resident visits.
…………………………

I woke up one morning in Hong Kong and my entire body was covered in honey and feathers and i was missing a kidney. How much are those therapy dogs ?

#51 Fish on 04.16.18 at 8:36 pm

Buy a Harley, possibilities are endless, might even meet someone who may just what you need yes true friend maybe go and have a coffee together enjoy the moment

#52 BG on 04.16.18 at 8:49 pm

#30 Mattl on 04.16.18 at 7:17 pm
Montreal is nothing like NYC economically
*******************************************

You are completely missing the point here.

The person you are replying to was saying Montreal is closer to New York in terms of being a city with strong personality and and its own vibe – VS generic Toronto.

#53 OttawaMike on 04.16.18 at 8:50 pm

A paid executor is an expensive option, No?

What would a bank charge? 4-5% of the estate value.

A normal rate is 4% and worth every cent. – Garth

#54 Arctic Gringo: Qalunaaq on 04.16.18 at 8:50 pm

The ultimate question – did the manliest dog cruise the Harley to Port Dover for Friday the 13th? I hope portfolio management, or weather, didn’t get in the way of a good time.

Dude. It’s winter there. – Garth

#55 Boomust on 04.16.18 at 8:57 pm

#27 B20 Bust

ER, not quite. IF the TO market “heats up” again, it is only a dead cat bounce.

Got that?

People were lulled into it here in Greater Van last year at this time; now we’re seeing a LOT of flip flops showing up.

Some people never learn, I guess…

#56 Rational Observer on 04.16.18 at 9:04 pm

Inheritances are income to the beneficiary and should be taxed as such. The current tax-free treatment of inheritance penalizes workers and entrepreneurs, while providing enormous financial advantage to unproductive leeches.

Ah, but you say, the leeches provide a valuable service?
They take care of the elderly, no? Why, yes indeed, but so do workers in assisted living homes, and they are taxed. So, why do beneficiaries receive special treatment?

Tax free inheritances are a vestigial remnant of colonial society – masters and serfs; wealthy masters preserving every advantage for themselves while burdening working serfs with every heavy load they can devise.

No other reason I can think of.

Wealth accumulated by parents is after-tax. Taxing it again when passed on is punitive. – Garth

#57 Lost...but not leased on 04.16.18 at 9:05 pm

This inheritance issue seems a bit silly….

I would hazard a guess that Christine realized a while back that the family home would be out of reach for any family member to buy the rest out, she is simply venting.

While it is commendable that her mother was able to live at home, with Christine as caregiver….I assume the deal cut with her family is that Christine lived there “rent free” as part of the deal ?

The issue appears to be that Christine will be “homeless” upon sale of the house, and other housing options are also becoming cost prohibitive, so unfortunately caught in the middle.

#58 Down and out on 04.16.18 at 9:08 pm

The question is who will snap it up. When you consider the terrible price Germans paid to acquired someone else’s country only temporarily, I’d say Canada is going cheap.

It’s a Long Term multi generational investment.

A concept the locals seem unable to comprehend

#59 Ron on 04.16.18 at 9:10 pm

#52 BG on 04.16.18 at 8:49 pm
#30 Mattl on 04.16.18 at 7:17 pm
Montreal is nothing like NYC economically
*******************************************

You are completely missing the point here.

The person you are replying to was saying Montreal is closer to New York in terms of being a city with strong personality and and its own vibe – VS generic Toronto.

——————-

Thank you, that was my point yesterday, and I’ve lived in all three cities.

In my Montreal hood, they actually closed down a Starbucks because it couldn’t compete with the local cafes.

If looking up at tall buildings make you feel like a Somebody, then by all means, enjoy Toronto. I just don’t get why that’s worth paying double for housing.

#60 slick on 04.16.18 at 9:16 pm

Arctic Gringo: Qalunaaq

I did take the wing up to Port Dover on friday the 13th.
It was about 45 F on the ride home at 5 pm.
Pretty slow day, but wait till July.
It will be a monster.

#61 Fish on 04.16.18 at 9:24 pm

RE #57 Lost…but not leased on 04.16.18 at 9:05 pm
This inheritance issue seems a bit silly….

I would hazard a guess that Christine realized a while back that the family home would be out of reach for any family member to buy the rest out, she is simply venting.

While it is commendable that her mother was able to live at home, with Christine as caregiver….I assume the deal cut with her family is that Christine lived there “rent free” as part of the deal ?

The issue appears to be that Christine will be “homeless” upon sale of the house, and other housing options are also becoming cost prohibitive, so unfortunately caught in the middle.

*****************
said it well

totally agree

#62 Lost...but not leased on 04.16.18 at 9:26 pm

#53 Ottawa Mike

Executor Fees ? 4-5%

I am an Executor(and beneficiary).

I could have claimed between 3-5 %….but waived it….at minimum I could have garnered $ 60,000..but long story short..I may have cleared about $10,000 as Executor fees are deemed as income.

I know Garth has advised neutral “3rd” party as Executor..but again that depends on each case…though I will admit Executor is a thankless job and not for weak of mind and spirit.

Getting financial statements is very tedious. The upside is one is in control (peace of mind)and can access the various banks, gov’t agencies etc. that one otherwise could NOT if one is not Executor.

IMHO, if all parties named in a given “Will” are on the same page, access a Lawyer that specializes in Estates, which is what we did. Many olde school types drafting Wills do NOT trust strangers..it is family or nothing.

#63 Angry Loser on 04.16.18 at 9:35 pm

So that’s the mysterious Derek’s house, eh? About what I expected. Derek is clearly a wealthy man, but he thinks nothing of ruining six lives in order to “finance” his retirement. He’s a piece of work if you ask me. But I guess that’s the sort of person you have to be to own a house like that in the first place.

#64 slick on 04.16.18 at 9:37 pm

‘Insurance Poor’
that is the term my Father used for spending too much on insurance, in case something happens. Life has risks, live with them.
In 1989 we [my wife and I] got married and bought 1/2 of the family business. I have many siblings. 6 years later we bought the rest. I looked into buying insurance on my parents lives in case they passed away, and we had to pay out the other siblings.
Even with a ‘last to die’ policy, the premiums would have crippled the business. Instead we used all the extra income to pay down debt, and expand the business. My father died 19 years later. My mother passed away 8 years after Dad. 27 years of insurance premiums, and the property had prolly tripled in value.

Garth says ‘planning’, but I don’t know how you could plan for 20+ years of increasing premiums, and also raise the insured amount. The best thing we did was plug along and pay down debt. Of course now the debt is behind us, and things worked out fine. Once we got through the first 5 years, we were prolly in a position that we could have borrowed the money from a conventional lender.

Our problem now is how do we get this to the next generation?

#65 FOUR FINGERS WATSON on 04.16.18 at 9:39 pm

Wealth accumulated by parents is after-tax. Taxing it again when passed on is punitive. – Garth
……………………………….

Dividends distributed by corporations are after-tax. Taxing it again when passed on to shareholders is punitive.- Watson

#66 BC earthquake on 04.16.18 at 9:39 pm

A solution to Vancouver’s RE problem may come as a result of nature’s wrath (although a few decades in the future).

https://globalnews.ca/news/3981536/tsunami-earthquake-canada-the-big-one/

#67 meslippery on 04.16.18 at 9:43 pm

#58 It’s a Long Term multi generational investment.
———-
Thats why I have not pulled the trigger and sold in the GTA and bought in say Halifax.
100 years from now a place in the good parts of GTA
priceless.

#68 Myra Andrews on 04.16.18 at 9:46 pm

Greater Vancouver Stats from realtor Paul Boenisch

April 16 New 377 Sold 191 TI: 9799

April 13 New 152 Sold 137 TI:9727
April 12 New 199 Sold 112 TI:9748
April 11 New 248 Sold 101 TI:9709
April 10 no posting from Paul
April 9 New 382 Sold 117 TI: 9450

April 6 no posting from Paul
April 5 New 268 Sold 164 TI: 9264
April 4 New 324 Sold 154 TI: 9204
April 3 New 538 Sold 131 TI: 9104

Mar 26-29 New 793 Sold 455 TI: 9032
Mar 19-23 New 1041 Sold 617 TI: 8916
Mar 12-16 New 1147 Sold 682 TI: 8743
Mar 5-9 New 1101 Sold 542 TI: 8510

#69 Mattl on 04.16.18 at 9:47 pm

#52 sorry, didn’t realize we were talking “vibes”.

Fact remains TO is to Canada what NYC is to the US…the financial centre of the country. It may not be a hip as Montreal, or as pretty as Vancouver, but it is our NYC. Can you guess where Garth’s firm is located? Not in Montreals or Halifax or Winnipeg. Vibes don’t drive high home prices, economies do and TO is where everything happens in Canada.

#70 S. Bby on 04.16.18 at 9:54 pm

They’ll get about 1.6 million for that place in this current market.

#71 Mark on 04.16.18 at 9:54 pm

“What would a bank charge? 4-5% of the estate value.
A normal rate is 4% and worth every cent. – Garth”

Is that 4% straight, or 4% + disbursements? If its + disbursements, that could be a lot more expensive than 4% because you better believe a bank (for example) will pick the most expensive professionals possible to execute whatever business, and render whatever advice they deem necessary on behalf of the Estate.

At least an executor who is nominally ‘family’ and may face the long-term wrath of the beneficiaries will shop around before spending crazy money on third party professionals.

#72 YVR Renter on 04.16.18 at 10:02 pm

#26 Smartalox – where do you live?! Gas has been at $1.549 in YVR for quite a while now…close to $1.80 for premium in my Beamer. Cant wait till it’s over $2.

#73 Mattl on 04.16.18 at 10:04 pm

“If looking up at tall buildings make you feel like a Somebody, then by all means, enjoy Toronto. I just don’t get why that’s worth paying double for housing.”

Cities are not expensive because they are cool. If they were Charlottetown would be insanely expensive. I mean who would live in Montreal when you could live in PEI?l

Montreal is cheap because the economy sucks. The city is run by fools. Construction is non stop and taxes are insane. Revenue Quebec are a bunch of goons. Great city to visit, does not appeal to most folks as a place to grow roots.

You may not like TO – personally I have no interest in living there, but homes will always be more then Montreal and Halifax because the job opportunities are endless.

#74 Tony on 04.16.18 at 10:05 pm

What I learned is remember to file income tax on time. My stupid brother was named executor of my father’s estate. My father died very close to the very end of December so there was two taxation years as a lot of remaining stocks and bonds were sold at the start of the New Year. My brother was in a divorce settlement at the time and since he was the executor he decided to do the income tax return. Then he forgot to file it and 4 days after 6 months was up I asked him how much did he owe? Then he tells me I forgot to file it and so he files it 4 days late and Canada Revenue levies a 30 thousand dollar penalty. What else I learned was beware of fast talking money grubbers. My Aunt died about two years ago and her will had all the assets split between me, my two brothers and my sister. Low and behold my niece gets her to rewrite the will on her deathbed and she took all the money. She didn’t even need the money because her mother hooked her up with some guy at the golf and country club whose father is worth about half a billion dollars. So my brother who was co-executor of my Aunt’s will tells her just keep it all.

#75 LS in Arbutus on 04.16.18 at 10:16 pm

I just did my mom’s final tax return. She had $55,000 in RRIFs that all went into her income for her final tax year. She had been drawing it down according to the RRIF mandatory minimum amortization each year, but the $55k was the residual.

So the $55k all goes into her taxable income this year. This on top of her other income. A better strategy would have been to draw an extra $5,000 out a year for the past 10 years and paid less marginal tax on it. She didn’t need the money though, so she didn’t pull it out.

It would not have made a big difference in overall tax payable, but it’s something to consider when you have years when you have less taxable income to pull money out of your RRSPs/RRIFs. Of course you then lose out on the balance accruing tax deferred, but my mom had her RRSPs invested in money market funds, so not yielding much/anything. Or you can pull out of your RRSP and put into a TFSA to maintain tax deferred earning status.

All that said, anything in an RRSP/TFSA goes directly to the beneficiaries named, (and the bank does not withhold at disbursement, although it’s taxable to the estate.) This means you do not have to wait for it to go through probate and it’s not subject to probate fees of 1% (or more) of the balance. So on the flip side (even though you might pay more tax) this is definitely an added benefit of holding in registered accounts. Helps with final expenses. Particularly a TFSA as this is pulled out upon death with no tax implications as it was contributed with after tax money.

Also don’t leave the registered accounts to one person and the house to another. The estate (the final tax return) pays money on the RRSPs/RRIFs. So if you distribute to different people, one gets the RRSPs/RRIFs tax free, the person who inherits the estate gets the tax bill on those RRSPs.

Things to think about with RRSPs/RRIFs. And make sure your beneficiary/beneficiaries is/are up to date!

One last thing, any money held in joint accounts automatically transfers over automatically and doesn’t go to probate, not subject to tax. This is another strategy, to have a joint account with a child and have some monies in there. It could help with final expenses, RRSP/RRIF tax burden.

#76 Rational Observer on 04.16.18 at 10:16 pm

Tax free inheritances are a vestigial remnant of colonial society – masters and serfs; wealthy masters preserving every advantage for themselves while burdening working serfs with every heavy load they can devise.

No other reason I can think of.

Wealth accumulated by parents is after-tax. Taxing it again when passed on is punitive. – Garth

—————————————————–

If I make a toy for $5 in material cost and sell it to my neighbor for $10, my neighbor pays $1.50 in HST and I pay the CRA $2.50 in income tax. But my neighbor has some tools that I want to buy, priced at $10. When I buy them, I pay $1.50 in HST and my neighbor pays $2.50 in CRA income tax. All the taxes, $8.00 in total, are on transactional transfers. Inheritance is also a transactional transfer.

If you wish to call the concept punitive, that is fine. Income tax is therefore also punitive and so are sales taxes. They are all punitive taxes on previously taxed income.

You must love government. – Garth

#77 Long-Time Lurker on 04.16.18 at 10:21 pm

#175 wxman on 04.16.18 at 10:03 am
So now you censor your comments..nice. This is the second time in a month that my comments were not posted and my comments were pretty meek..is questioning you not allowed?

Are you only accepting comments that agree with you? I was not insulting nor derogatory nor disrespectful..you always have the option of adding a snotty little response in italics at the bottom which of course we cant respond to so you always have the last word.

I guess dissenting voices are just now allowed..hail Garth the King!

>Get your own blog.

I think it’s going to be very entertaining when Alberta gives BC a reality check and restricts the oil & gas flowing in. It’ll be like Notley giving Horgan and Weaver a combined double wedgie. I want to see the look on their faces.

#78 Andre on 04.16.18 at 10:23 pm

#15 Cto

I am in a similar position. I have a possible career opportunity in Vancouver and I am now running the numbers and pro/cons of this option. I live in Sudbury, ON and our life honestly is great. Great neighborhood, great school, great outdoor activities and very low operating cost. I am almost finished paying the house (only 10% left and no other debt), cars paid for, good retirement plan, high savings as % of gross income…but my career is not advancing as fast I would like to and also it would be great to be exposed to different challenges and business. Vancouver is also a hub in the business I am in; better possible future opportunities without the need to relocate. Vancouver has also been sold to me as a great place to live…. :) close to the mountains and to my in-laws (they live in Alberta)…. all that … but the housing cost is so high that makes seriously doubt if this is really the right move for us… my household income bracket is +250K/year and I dont think we should buy a house in Vancouver….I dont think we can afford one

#79 Blobby on 04.16.18 at 10:33 pm

What entitles people these are!

Your parents owe you nothing other than giving you life

#80 Not Wrong on 04.16.18 at 10:34 pm

The executor only has the legal right to be paid an amount of 5% equal to the size of the estate value, and above this amount is subject to the approval of the court. No lawyer is qualified to witness a power of attorney to certify mental capability. This can be challenged, and only a family physician can witness to make it sound.

You mistake a POA for continuing care which a competent person grants to a trusted individual for future use with one which is determined by a third party without consent. Two totally different things. – Garth

#81 burnaby guy on 04.16.18 at 10:34 pm

5 Mark on 04.16.18 at 6:27 pm
nor the impact of the sales mix in the post-2013 era on pricing.
—————————-

Omfg. I’ve been gone 2 years and the first thing I read is Mark talking about the sales mix. The more things change, the more they stay the same.

Totally agree with you man – that 2013 peak RE ” know-it-all” Mark is out with his sales mix 2013 peak RE talk again. I just quickly scrolled pass it.

#82 Moister Miller on 04.16.18 at 10:35 pm

This boomer also died without a will

https://thegrapevine.theroot.com/lawyers-leach-millions-from-prince-s-estate-while-his-f-1825299916

http://minnesota.cbslocal.com/2018/04/15/prince-estate-heirs/

https://www.billboard.com/articles/columns/rock/8338336/prince-heirs-stew-bankers-lawyers-cash-in-estate

https://www.yahoo.com/entertainment/why-princes-heirs-nothing-while-161856779.html

#83 Andre on 04.16.18 at 11:26 pm

Garth,

What do you think of the paper below? I would generally avoid all dark gray neighborhoods ( high indebtedness levels)..

http://neighbourhoodchange.ca/documents/2013/09/mapping-the-urban-debtscape-the-geography-of-household-debt-in-canadian-cities-alan-walks-2013.pdf

#84 LivinLarge on 04.16.18 at 11:28 pm

“Dividends distributed by corporations are after-tax. Taxing it again when passed on to shareholders is punitive.- Watson”…I’m guessing here Watson but you don’t actually understand how and why dividends are taxed the way they are in Canada do you?

Do you even receive any dividends? The Dividend Tax Credit, even if it is a tad convoluted, is there to account for the fact that distributed dividends are after corp tax dollars.

On a related note, dividends are, in some countries, added to general income and taxed so there is no accomodation for prepaid taxes. The UK does it that way.

#85 For those about to flop... on 04.16.18 at 11:32 pm

If you were going to buy an old banger in Vancouver at the moment ,you could probably do worse than this one.

Asking 1.25

Assessment 1.46

Sale…

M43BC

https://blurealty.com/r2257222-136-garden-drive#

#86 FOUR FINGERS WATSON on 04.16.18 at 11:42 pm

#84 LivinLarge on 04.16.18 at 11:28 pm
“Dividends distributed by corporations are after-tax. Taxing it again when passed on to shareholders is punitive.- Watson”…I’m guessing here Watson but you don’t actually understand how and why dividends are taxed the way they are in Canada do you?

Do you even receive any dividends? The Dividend Tax Credit, even if it is a tad convoluted, is there to account for the fact that distributed dividends are after corp tax dollars.

On a related note, dividends are, in some countries, added to general income and taxed so there is no accomodation for prepaid taxes. The UK does it that way.
……………………

I do in fact receive dividends dude, and i do understand how and why they are taxed. It is double taxation. You seem to be the one who does not understand. I am guessing that you are not livin’so large after all.

#87 LivinLarge on 04.16.18 at 11:43 pm

“Planning. Did you miss that part? – Garth”…no I didn’t. I just don’t see the point in paying periodically increasing premiums for maybe 20 years to end up having paid close to what you get at the end…an over priced house. Insurance is only “cheap” to buy if you beat the actuarial calculation and die soon after a policy is written. The insurer is in it for a profit.

Better she bites the bullet, sells and splits with the siblings. There may be lots of memories associated with house but the memories are there regardless whether she lives there.

#88 LivinLarge on 04.16.18 at 11:45 pm

Sorry Watson, you wouldn’t be making such moronic claims like “double taxation” if you understood that corp tax rate isn’t anything like personal graduated rates and the DTC is compensation for the corp tax already paid.

#89 LivinLarge on 04.16.18 at 11:53 pm

“You seem to be the one who does not understand. I am guessing that you are not livin’so large after all.”…wrong there too. I am living VERRRYYYYY large almost entirely on dividends.

#90 Mark on 04.17.18 at 12:05 am

“#81 burnaby guy on 04.16.18 at 10:34 pm
5 Mark on 04.16.18 at 6:27 pm”

Its not just Mark saying that changes to the sales mix have been prominent in much of the alleged “price changes”, its also Ross Kay:

https://www.youtube.com/watch?v=nA_syBbggpQ

Once again, a great interview on TDN with Ross Kay.

#91 Russ on 04.17.18 at 12:06 am

Rational Observer on 04.16.18 at 10:16 pm

Tax free inheritances are a vestigial remnant of colonial society – masters and serfs; wealthy masters preserving every advantage for themselves while burdening working serfs with every heavy load they can devise.

No other reason I can think of.

Wealth accumulated by parents is after-tax. Taxing it again when passed on is punitive. – Garth

—————————————————–

If I make a toy for $5 in material cost and sell it to my neighbor for $10, my neighbor pays $1.50 in HST and I pay the CRA $2.50 in income tax. But my neighbor has some tools that I want to buy, priced at $10. When I buy them, I pay $1.50 in HST and my neighbor pays $2.50 in CRA income tax. All the taxes, $8.00 in total, are on transactional transfers. Inheritance is also a transactional transfer.

If you wish to call the concept punitive, that is fine. Income tax is therefore also punitive and so are sales taxes. They are all punitive taxes on previously taxed income.

You must love government. – Garth
===============================

Hey R O,

You have a very good point.

There should be either income tax or consumption tax or property tax.

The current system, where we have all three is very inefficient and prone to be abusive to the (poor) taxpayer.

As a discussion point, is dividends truly a property tax, an income tax or a wealth tax?

#92 Salted on 04.17.18 at 12:24 am

#83 Andre
That’s quite the paper. Thanks for posting.

#93 YVR Renter on 04.17.18 at 12:33 am

#78 Andre -don’t do it! The housing costs are beyond belief…no one believes them until they get here and really tries to live. And it rains for 9 months straight. Your car insurance cost is double. If is snows, the entire city shuts down and a zillion folks with summer tires and no driving skills are there to skid into you. Whistler has also become completely unaffordable, not only to own, but just to ski there or stay for a weekend. Sudbury vs Vancouver…you haven’t seen anything! No comparison for costs! You wont even afford a slanty semi. We cant wait to get out of here (and the endless rain!)

#94 Salted on 04.17.18 at 12:37 am

So it’s my first foray into commercial property.

The 2-story cinderblock building is a court-ordered sale. 7200sqft divided into 4 units each with its own bay door.

Triple net lease and rents for $8/sqft. New slabs being poured across the street points to an up-and-coming area.

All systems are a go until I climb over the chain-link fence into blackberry brambles of the vacant lot next door to have a look the north side of the building.

A big shear crack half a cinderblock in running up the wall from 2’ above ground to nearly the roof line. Crap.

#95 Don Der on 04.17.18 at 12:57 am

“To insure someone else’s life you need their consent”

I learned something new. In a Michael Moore doc, he shows a woman who died of cancer where her husband collects about $10K on his policy, but her employer (Walmart) pulled in about $75K on a secret policy they held, if memory serves correct. It’s called a dead peasant policy. Only in America I guess. Safe in Canada.

It’s too bad the siblings couldn’t agree on renting the house out and splitting the cash flow. I wonder if they had the square footage to duplex it – an insane idea in an insane market but the cash flow baby the cash flow.

I thought I saw the insurance policy trick on a TV commercial in the 80’s (Honey…it’s Patrick…he bought Life Insurance!). My thought at the time was “cripes the monthly payments…oh the humanity. But is there a tax scheme where the payments could be deducted?

If the siblings do rent it our you’d hope the grandchildren would follow suit when they get the house in 25 years. You could avoid tax/buyouts/insurance until the cows come home…or until an earthquake levels the lower mainland.

What’s the tax implication on collecting earthquake insurance then? Another day another Valtrex I guess.

Surculus et Pruna Garth….Surculus et Pruna.

#96 conan on 04.17.18 at 1:24 am

I would be using a term to 100 universal policy that allows for a variable premium. Choose the low fee option on a quality product, and it becomes investment grade.

Now that interest rates are on the way up, level term insurance costs are getting attractive.

Like Garth said, its planning. Once an insurance solution has been crafted, It works better then any other strategy.

If it does not work better, then you have not figured out the proper configuration.

#97 YVRmoister on 04.17.18 at 1:36 am

I cannot believe the financial ignorance on this blog.

For those here bashing life insurance, there is only ONE question you need to answer:

ARE YOU GOING TO DIE?

If the answer is YES, then you protect your estate with life insurance. The End.

Because you only have two choices:

1) let the insurance company pay your estate taxes (and leave a sizable TAX FREE, PROBATE FREE death benefit to your beneficiaries)

Or

2) you “self-insure” which means trying to save up enough income to cover your taxes which leaves LESS to your beneficiaries.

This is why I have a permanent, whole life participating life insurance policy. It will never expire as long as the level (aka never increasing) premiums are up.

Furthermore, my policy keeps up with inflation, so by the time I die, my beneficiaries will recieve my original death benefit PLUS all of my premium payments PLUS several hundred thousand more Death Benefit from growth in my policy.

There is a reason banks and rich people are the number one purchasers of these policies.

#98 jane24 on 04.17.18 at 2:43 am

This really is a first world problem. Family are lucky to have such a large pot of wealth to share out. Re the carer then yes she should be compensated but it should have been sorted out years ago. She has saved her siblings massive amounts of care money and care time. She should have organized a wage to look after Mum on everyone’s behalf years ago. She was foolish.

We had a similar case in our family with my in-laws. They lived in Montreal and we as you know live in England. Their younger son stepped in as their main carer and when the estate was eventually shared equally among the three sons we made sure that part of our share was made over to that younger son as compensation and thanks. Only fair.

#99 Nonplused on 04.17.18 at 2:58 am

#56 Rational Observer

I hate to talk this way because I may get deleted, but you are an idiot. My dad always paid all his taxes. When he dies, if he ever does he just seems to keep on going like the energizer bunny, I don’t see why taxes need to be paid again. He already paid the taxes. Must you pay taxes both coming and going?

#100 Nonplused on 04.17.18 at 3:06 am

PS that’s why estate taxes are popular. Most people don’t intend to leave their kids shit but bills. And poor people just want to steal from anybody who has a nicer TV than they do.

If the tax has already been paid, which it has to be upon death, (all assets are deemed to be sold) an additional tax is discriminatory.

Jesus said that the meek shall inherent the earth. But not the poor, they are just thieves. The meek and the poor are not the same thing. The poor become thugs.

#101 bdwy sktrn on 04.17.18 at 3:27 am

I know that house, it’s just around the corner. It’s a real oddball – the house is sitting all the way back , on the rear property line.
extra deep front yard though, one could build a ‘laneway house’ in the front yard!
when driving a truck in the alley you can see in the windows a bit too well.
1.7 is a bit ambitious. could have got it late 2016 but lot value has slipped a tad since then

===————===
#83 fosbury flopp
https://blurealty.com/r2257222-136-garden-drive#
1.25 move in condition is unheard of!
location is kind of sketch – hastings is the newest hip strip however.

that place is 10 min walk from poor Christine’s house featured in todays blog. it would fetch 2m in her location.

there will be a 4-6 story apt/condo on the site before too long, the big payout is still yet to come.

#102 bdwy sktrn on 04.17.18 at 3:30 am

further – whoever took those/doctored those photos is a wizard (lighting!!!) as it looks faaaaar more old and tired in real life.

#103 Buttercup on 04.17.18 at 4:55 am

“#65 FOUR FINGERS WATSON on 04.16.18 at 9:39 pm
Wealth accumulated by parents is after-tax. Taxing it again when passed on is punitive. – Garth
……………………………….

Dividends distributed by corporations are a.,fter-tax. Taxing it again when passed on to shareholders is punitive.- Watson”
———————-

When a Cdn resident has no other taxable income they may receive somewhere around $70,000 in eligible Canadian dividends without paying any personal income tax! That is the dividend tax credit mechanism at its very best!

Consider Great Britain, where the tax man visits the home after a death to evaluate EVERYTHING the deceased owned (going as far as kitchenware and clothing) for their 40% death duties! –On everything, including the bank account, if I recall correctly. Talk about punitive! Thankful the FIL got some advice after moving back there, to leave most of his cash in Canada. The Vanc house was sold in 2012. Sigh.

Remember, in Canada there is income tax paid upon death on all real and capital assets’ fair market values, so not an entirely tax-free transfer to the heirs. Except that Cdn holy grail, the principle residence!

#104 Howard on 04.17.18 at 4:58 am

#69 Mattl on 04.16.18 at 9:47 pm
#52 sorry, didn’t realize we were talking “vibes”.

Fact remains TO is to Canada what NYC is to the US…the financial centre of the country. It may not be a hip as Montreal, or as pretty as Vancouver, but it is our NYC. Can you guess where Garth’s firm is located? Not in Montreals or Halifax or Winnipeg. Vibes don’t drive high home prices, economies do and TO is where everything happens in Canada.

—————————————————

Which again has nothing whatsoever to do with the type of comparison made.

Just stop.

#105 Victor V on 04.17.18 at 7:15 am

Canadians say in poll they are feeling the effects of rising interest rates

https://www.thestar.com/business/economy/2018/04/16/canadians-say-in-poll-they-are-feeling-the-effects-of-rising-interest-rates.html

The quarterly MNP consumer debt index survey says 43 per cent of Canadians say they’re feeling the effects of higher interest rates, up five percentage points from three months ago.

The poll done for insolvency firm MNP also said 51 per cent of respondents fear rising interest rates could impact their ability to repay their debts, while 33 per cent agreed that rising interest rates could possibly push them towards bankruptcy.

Forty-seven per cent said they do not believe they’ll be able to cover all living and family expenses in the next 12 months without going into further debt.

The poll comes ahead of the Bank of Canada’s interest-rate announcement later this week.

#106 Mattl on 04.17.18 at 7:19 am

NP Howard, I will let you guys go back to being flabbergasted at how RE in Toronto is more expensive then Madrid or Montreal because architecture and vibe.

#107 LivinLarge on 04.17.18 at 7:45 am

“Wealth accumulated by parents is after-tax. Taxing it again when passed on is punitive. – Garth”…well, except for cap gains and since the balanced portfolio approach relies heavily on capital appreciation, the elderly folks in a balanced portfolio “should” have accumulated the bulk of their estate in the form of capital appreciation along with other tax advantaged investments.

Without knowing much about reverse mortgages, it seems like one alternative route for the mother in this example would be to have taken out the reverse mortgage and socked the proceeds in a balanced portfolio of ETFs and just waited out the reaper or even to have socked it into an insurance company product with a death benficiary so that none of that is taxed at all and doesn’t form part of the estate for probate. That at least doesn’t forfeit the principal residence protection but certainly doesn’t deliver admirable rates of return either.

Also, as for a UK tax resident keeping coin in Canada to avoid paying death duties, as far as I am aware, the coin in Canada is subject to the appraisal and “should” have been declared. “Hiding” it here I think steps over line into evasion. I’d live in the EU 12 months per year rather than 5 months if it weren’t for the fact that being an EU tax resident means my global income is taxed regardless of where it’s earned…same here in The Great White North too.

#108 MF on 04.17.18 at 7:52 am

-=jwk=- on 04.16.18 at 6:19 pm

Even though it’s the most bilingual part of Quebec, the French in Montreal is prohibitive for a lot of people.

No one cares about “rich history” in the day to day. What matters is jobs, family, entertainment etc. And with all that Toronto beats Montreal hands down. Even the weather is “slightly” better.

MF

#109 Polozified on 04.17.18 at 7:58 am

#69 Mattl on 04.16.18 at 9:47 pm
#52 sorry, didn’t realize we were talking “vibes”.

Fact remains TO is to Canada what NYC is to the US…the financial centre of the country. It may not be a hip as Montreal, or as pretty as Vancouver, but it is our NYC. Can you guess where Garth’s firm is located? Not in Montreals or Halifax or Winnipeg. Vibes don’t drive high home prices, economies do and TO is where everything happens in Canada.

—————————————————

Completely useless comparison. Lagos is the NYC of Nigeria!

#110 Proof ? on 04.17.18 at 8:01 am

WHY POLOZ HAS DELAYED RAISING INTEREST RATES

Between July 2017 and Jully 2018 47 % of all Canadian mortgages outstanding are up for renewal.

Poloz is trying to get everyone he can renewed at the lowest possible rates during this time by making up excuses and dragging out the rate increases. This kicks the RE crisis can down the road.

He is seeking to keep the gasbag inflated so as to not adversely affect the Canadian economy and thereby keep inflated the RE values upon which much economic activity relies.

(Think HELOCs and other home equity based lending upon which construction, RE commissions, LT taxes, etc. relies).

Your government at work making your life even more expensive !

#111 IHCTD9 on 04.17.18 at 8:02 am

Make it easy, die broke. Gramps on Mom’s side did this. As he neared 90 he started selling off every thing and controlled the disbursements himself. By the time he was 92 he had moved in with a couple of his kids who were retired empty nesters, and owned what was in his apt. He essentially became what we know as a “moister” camping out in the basement.

He passed away at 99 and there were no complications that I know of, and the family still gets along fine.

#112 MF on 04.17.18 at 8:02 am

69 Mattl on 04.16.18 at 9:47 pm

You gotta be careful citing the obvious here. You can get in trouble.

Some implicit Rules of the blog:

-don’t praise Toronto ever.
-all small towns with no economy or life are to be praised
-anyone pro Toronto re is bad.
-Trump is bad.
-you can be pro American…but only with regards to its economy/stock market. You cannot be pro American in any other way (culturally, militarily, Republican etc.)
-balanced portfolios rock, but completely ignore anyone who made a fortune in RE to have money to invest.
-anyone under 45 who mentions displeasure with anything is a “whiner”.

Anyone else is free to add more!

MF

#113 crowdedelevatorfartz on 04.17.18 at 8:17 am

@#23 Hope and Ruined
“I’ve been gone 2 years …”
+++++

Completed the “2 years less a day” sentence without time off for good behaviour…?

#114 Rational Observer on 04.17.18 at 8:27 am

#99 Nonplused

Wishing you and your father many years of continued good health.

#115 Another Deckchair on 04.17.18 at 8:40 am

@78 Andre;

What? Great income. Why don’t you just save for a few years, and “retire” and live life without a honking-great mortgage?

You’ll know MrMoneyMustache, right? Here’s one that lays it on the line:

http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

Whether you agree with his writing style or not, the ideas he is pushing are sound.

#116 WhenItsAllBeenSaidAndDone on 04.17.18 at 8:52 am

It’s just a house … and we’re just passing through. Home is where we will spend eternity. Far more important decisions to be made.

#117 Steven Rowlandson on 04.17.18 at 8:57 am

The solution is obvious. Let the oldest or most in need of a home have the house to live in and presume the value to be one dollar.
Split the contents and the rest of the estate up in an equitable manner. The house is only a place to live.

#118 Steven Rowlandson on 04.17.18 at 9:02 am

Current home prices are not fair market value as they are not affordable. Instead they constitute financial gross indecency and genocide.

#119 dharma bum on 04.17.18 at 9:30 am

How silly it is to become attached to “assets”.
An old pile of bricks and concrete, or cinder blocks and stucco, or whatever that ugly monstrosity of an excuse for a house is.
Who cares?
Cherish the memories made there, and move on.
Do not become attached to material possesions.
Everything is temporary.
All is impermanent.
“The root of suffering is attachment.”
If those people lived in Halifax, they’d all be getting $1.98 each.
Suck it up, be grateful, and move forward with your lives.

#120 not so liquid in calgary on 04.17.18 at 9:36 am

@ Yaroslav on 04.16.18 at 7:40 pm

—————————————————————————————-

obviously your parents did not have Term insurance. It sounds like they had Whole Life insurance, as you mention the policies “were paid off”. wrong kind of insurance. even I, with severe health issues can find policies to cover me, priced very reasonably, no health exam necessary!

#121 not so liquid in calgary on 04.17.18 at 9:47 am

@ YVR Renter on 04.16.18 at 10:02 pm
#26 Smartalox – where do you live?! Gas has been at $1.549 in YVR for quite a while now…close to $1.80 for premium in my Beamer. Cant wait till it’s over $2.

————————————————————————————————–

won’t be long now… just keep those Trans Mountain protests going Elizabeth!

#122 Shawn on 04.17.18 at 10:05 am

VWO>SPY, VGK>SPY – both crowded trades.

You will see US equities (especially tech) outperform for 2018…

#123 Matt on 04.17.18 at 10:11 am

Hi Garth,

This isn’t related to your post directly, but it seems to deserve a blog. It even got the attention of brokers, who are saying some pretty stunning things about FSCO. Reading this, I get the feel that there are some angry people out there who are going to start talking. And some Canadians about to lose money.

The executives of that firm have been called frauds for years now and by who? No other than Ben Rabidoux and Marc Cohodes.

> “Nobody feels FSCO has any clout at all, and when you do find people doing inappropriate things, very little happens,” said Smith-Gatcke, adding FSCO cannot execute its mandate “in a concise and swift manner.”

> Fortress’s co-founders Vince Petrozza and Jawad Rathore previously paid the Ontario Securities Commission a $3mln settlement, and the latter received a lifetime ban from the Mutual Fund Dealers Association and fined $25,000 in penalties and $7,500 in costs.

> If I was giving money to a development company, I would not want the people to whom I was giving money to have accepted a voluntary ban from the mutual fund industry,” said Butler. “Personally, I would not feel comfortable with it. Others might, but I wouldn’t.

> There’s nothing in our industry to protect you as a broker or an agent. There’s no incentive for a broker or agent to willingly declare that they had seen something fraudulent. Most brokerages make those claims regardless, and those are the brokerages you want to be aligned with, but, unfortunately, there are a lot of other bad brokerages out there.”

Here’s the link: https://www.mortgagebrokernews.ca/news/broker-networks/fortress-real-fiasco-underscores-fscos-impotence-241075.aspx

Have a good one.

#124 IHCTD9 on 04.17.18 at 10:24 am

#6 Pepe on 04.16.18 at 6:27 pm
Another Buyer bites it big time

Link deleted, as this site respects the personal privacy of posters. Blog dog code. – Garth

######################
It was a Toronto Star link about “Couple ordered to pay $470,000 after reneging on Ontario home deal”.
_______

“I’m trying to be as positive as possible. This stuff can just destroy your health,” [Hu] said.”

Good Grief Dave, there is nothing positive here. You’ve blown a colossal pile of money chasing after a house you could not afford. You don’t need a McMansion for retirement.

Enjoy paying the sellers that half million for nothing, so much for your retirement.

#125 quakeNshake on 04.17.18 at 10:26 am

Considering that place could float out to sea when the big one hits, there could be just a wee bit of discrepancy between market price and market valuation.

I mean, really, you can look at the tide the wrong way and get flooding in Hongcouver. A life raft and launch pad on the roof should be mandatory.

Please, please try and direct your sentiment to photo albums.

#126 IHCTD9 on 04.17.18 at 10:31 am

#118 Steven Rowlandson on 04.17.18 at 9:02 am
Current home prices are not fair market value as they are not affordable. Instead they constitute financial gross indecency and genocide.
_____________________________

All the more reason to sell now – before folks smarten up. Take the windfall and run.

Christine can take her 340K and try her luck somewhere else.

#127 Renter's Revenge! on 04.17.18 at 10:38 am

All taxes in their current form are completely arbitrary. The government just needs to tax something (anything) in order to balance expenses with revenues. There is no such thing as fair taxation.

Shifting all taxes to land tax is an interesting argument, because land is the most basic requirement for life (it provides food, shelter, commodities, etc.), and a land tax would discourage people from hoarding land, but it still seems like a bit of an anachronism.

The only way to make taxes fair is if the government tallied up all the public services an individual used in a year and then sent them a bill for the costs, although this would be extremely inconvenient and a huge cost to people’s privacy. The only other option would be to charge user fees for literally everything a person uses, but that still wouldn’t cover indirect usage of things like the military.

It seems like we are stuck with the current system of taxing everything that moves, and the only recourse is for citizens to pressure the government to be more efficient with their spending and not create unfair situations, such as with public servants receiving better compensation than the rest of the population. See the Financial Post today for an article on a retired football coach in Oregon receiving a publicly-funded pension of $46,000 per month!

#128 fancy_pants on 04.17.18 at 10:40 am

#105 Victor V on 04.17.18 at 7:15 am

meanwhile, banks continue to draw huge profits with no skin in the game as they will be bailed when shtf. CMHC, banks and gov’t all know well that the dumb a$$ taxpayer gets the bill if/when there is a fallout. The gold lined pockets running the game simply walk away unscathed.

#129 FOUR FINGERS WATSON on 04.17.18 at 10:44 am

#88 LivinLarge on 04.16.18 at 11:45 pm
Sorry Watson, you wouldn’t be making such moronic claims like “double taxation” if you understood that corp tax rate isn’t anything like personal graduated rates and the DTC is compensation for the corp tax already paid.
…………………………………..
Hey genius, tell it to Warren Buffett:

In order to avoid double taxation, some companies (for example, Berkshire Hathaway) choose not to pay a dividend. But many investors desire the steady income that dividends can provide.

Read more: What is the double taxation of dividends? | Investopedia https://www.investopedia.com/ask/answers/03/102203.asp#ixzz5CwOIBf00

#130 45north on 04.17.18 at 10:45 am

Grand Étang, Nova Scotia: I am very happy in my house by the sea, but I have become increasingly nervous about the roof. So before this March, I had the great good luck to engage a local carpenter, Gerard Miller who has “stiffened” the rafters of more houses than he can remember.

http://ottawacitizen.com/opinion/columnists/doucet-in-cape-breton-we-dont-suete-the-small-stuff-but-we-do-worry-about-climate-change

Sounds like houses in Cape Breton need extra bracing. If you were building a house from scratch, you could buy trusses with the extra bracing.

Grand Étang, Nova Scotia – not New York City

#131 IHCTD9 on 04.17.18 at 11:02 am

#78 Andre on 04.16.18 at 10:23 pm
#15 Cto

I am in a similar position. I have a possible career opportunity in Vancouver and I am now running the numbers and pro/cons of this option. I live in Sudbury, ON and our life honestly is great. Great neighborhood, great school, great outdoor activities and very low operating cost. I am almost finished paying the house (only 10% left and no other debt), cars paid for, good retirement plan, high savings as % of gross income…but my career is not advancing as fast I would like to and also it would be great to be exposed to different challenges and business. Vancouver is also a hub in the business I am in; better possible future opportunities without the need to relocate. Vancouver has also been sold to me as a great place to live…. :) close to the mountains and to my in-laws (they live in Alberta)…. all that … but the housing cost is so high that makes seriously doubt if this is really the right move for us… my household income bracket is +250K/year and I dont think we should buy a house in Vancouver….I dont think we can afford one
____________________________________

Holy moly dude, this is a no brainer (to me anyway).

You have achieved financial greatness – a high income, in a low cost locale. Life will be very easy on the money front, retirement will come soon as will the 7 figure portfolio. The wife and kids will be happy.

YVR is a much nicer place to be than Sudbury, no doubt. But is it worth a 10-20K mortgage payment? Hell no, it ain’t. What happens in Van if you or the wife gets laid off? What if she splits? What happens to your kids down the road – are they going to make 250K/yr too?

Going to BC is akin to laying the ground work for financial destruction. Life can throw unexpected curves, and you need to be able to weather the storm(s). You do not want to willingly put yourself in a position where all you got is a house that used to be worth 2.5 Mil.

#132 Howard on 04.17.18 at 11:02 am

#106 Mattl on 04.17.18 at 7:19 am
NP Howard, I will let you guys go back to being flabbergasted at how RE in Toronto is more expensive then Madrid or Montreal because architecture and vibe.

———————————————-

Which again has nothing to do with the pdiscussion. Nobody is flabbergasted that Toronto RE is expensive given an annual influx of 150,000 from outside Canada. That will keep Toronto RE going forever.

#133 Howard on 04.17.18 at 11:13 am

#111 IHCTD9 on 04.17.18 at 8:02 am
Make it easy, die broke. Gramps on Mom’s side did this. As he neared 90 he started selling off every thing and controlled the disbursements himself. By the time he was 92 he had moved in with a couple of his kids who were retired empty nesters, and owned what was in his apt. He essentially became what we know as a “moister” camping out in the basement.

He passed away at 99 and there were no complications that I know of, and the family still gets along fine.

—————————————————-

I wonder why more elderly people don’t do this. Sure you can’t predict when you’ll die. But for those in their 80s, or diagnosed with an incurable illness, it would make sense to hand out the dosh to the kids/grandkids while still living. Wouldn’t there also be a tax benefit to the recipients if they get the money as gifts rather than as an inheritance via a will after death?

#134 Big Kahuna on 04.17.18 at 11:20 am

#112MF-LOL! I am shocked you were allowed to point out the obvious-you must be connected to the elite.

#135 Big Kahuna on 04.17.18 at 11:22 am

Here is a question-1.7 million divided 4 ways isn’t enough for her to stop whining-would 17 million do the trick? I say probably not.

#136 burnaby guy on 04.17.18 at 11:24 am

90 Mark on 04.17.18 at 12:05 am

Who care what that Ross who says. I sure don’t. Who is that Ross who? Put away your 2013 peak RE, peak sales mix, peak rent mix talk. Nobody believes it except 2 people. Your reply is short this time so I read it otherwise I just scroll pass it.

#137 TurnerNation on 04.17.18 at 11:40 am

If I perish in a road crash will strangers give my family $1 million? Evidently my life is not worth that to them.
So I don’t give it.

#138 For those about to flop... on 04.17.18 at 11:47 am

I went to El Paso once.

Next time I’ll Paso…

M43BC

“Mapping Top 10 Cities with the Best (and Worst) Salaries.

What is the most important measure for your family when it comes to financial security? Is it the poverty rate in your community? The overall unemployment rate? Or is it the total take-home pay coming into your pocket each year? We suspect it’s the latter, so we created a new map showing the places with the 25 highest and 25 lowest median annual earnings in the country.

We gathered the data from 24/7 Wall St, which analyzed occupational employment statistics from the Bureau of Labor Statistics for 381 metro areas. Figures represent the median annual income as of May 2017, the most recent information available. We took the 25 cities with the highest incomes and the 25 with the lowest and mapped them as green and red spikes, respectively. We then labeled the top 10 in each category.

Top 10 Cities with the Highest Annual Median Wages

1. California/Lexington Park, MD: $62,820

2. San Jose/Sunnyvale/Santa Clara, CA: $57,540

3. Washington/Arlington/Alexandria, DC/VA/MD/WV: $53,430

4. San Francisco/Oakland/Hayward, CA: $52,210

5. Trenton, NJ: $51,440

6. Boston/Cambridge/Nashua, MA/NH: $50,550

7. Bridgeport/Stamford/Norwalk, CT: $49,630

8. Seattle/Tacoma/Bellevue, WA: $49,110

9. Fairbanks, AK: $48,150

10. Boulder, CO: $48,050

Top 10 Cities with the Lowest Annual Median Wages

1. Brownsville/Harlingen, TX: $24,100

2. McAllen/Edinburg/Mission, TX: $25,600

3. Myrtle Beach/Conway/North Myrtle Beach, SC/NC: $26,710

4. Laredo, TX: $26,760

5. Gadsden, AL: $26,760

6. Hot Springs, AR: $26,910

7. Sebring, FL: $27,240

8. Jacksonville, NC: $27,710

9. El Paso, TX: $28,080

10. Hattiesburg, MS: $28,190

The most obvious trend from our map is that cities with the lowest paying jobs tend to be in the Southeast, whereas most of the cities with the highest paying jobs are either on the West Coast or in the Northeast. You might expect places like San Jose and San Francisco to top the list, given the presence of so many high paying jobs with the tech community. The same can be said for Seattle and Boston. Interestingly, Washington, DC makes the top 10 as well, perhaps suggesting that there’s money to be had if you’ve got connections to those in power.

But we think the best place to live is probably San Francisco. It has an unemployment rate of just 2.8% (the lowest of any in the top 10) and a poverty rate of just 9.2% (the second lowest in the top 10). That signals an economy running at top speed. Great weather, by the ocean, plenty of good paying jobs—now if only they can do something about the earthquakes.

Seattle, Boston, San Francisco—you’ve no doubt heard of many of the cities with the highest paying jobs. Brownsville, Gadsen, Hot Springs—do any of those places ring a bell? Many of the metro areas with the lowest paying jobs are hard to find on a map precisely because they aren’t known for any booming industries. As a matter of fact, Texas has four cities in the bottom 10, none of which are the big ones you’ve already heard of like Dallas or Houston.

There are a couple of interesting surprises on our map at both ends of the spectrum, however. Fairbanks, Alaska makes it into the top 10 (with a median salary of $48,150), thanks in large part to the scarcity of labor on the last frontier and the oil industry. Alaska produces so much oil that instead of taxing people’s income, the state government actually pays people to live and work there. Minneapolis, MN also made it onto the map, albeit not into the top 10, making it the best metro area in the Midwest in terms of median salary levels. Boulder, CO also stands out as the only city on Mountain Time making it into the top 25.

Inequality is one of the defining themes of the U.S. today, but it can be a hard thing to illustrate. Our map shows where the haves and the have-nots tend to live and, although it is not a complete picture, it demonstrates enormous regional differences in take-home pay for American workers.”

https://howmuch.net/articles/10-cities-highest-lowest-average-annual-salary

#139 april on 04.17.18 at 11:55 am

#136 – Maybe you should listen to a few of Ross Kay’s talks before you judge.

#140 Ian on 04.17.18 at 12:13 pm

Latest Atlanta Fed Q1 GDP update:

2.0%

https://www.frbatlanta.org/cqer/research/gdpnow.aspx?panel=fa9ccf1bede04c3b8a3ac751883e58a93

#141 FOUR FINGERS WATSON on 04.17.18 at 12:20 pm

#103 Buttercup
When a Cdn resident has no other taxable income they may receive somewhere around $70,000 in eligible Canadian dividends without paying any personal income tax! That is the dividend tax credit mechanism at its very best!
………………………

Head fake….Almost no one qualifies under those conditions. If you have a job or if u collect OAS or CPP or if u have RRIF income or a company pension plan you have “ other taxable income “.

#142 James on 04.17.18 at 12:22 pm

#97 YVRmoister on 04.17.18 at 1:36 am

I cannot believe the financial ignorance on this blog.

For those here bashing life insurance, there is only ONE question you need to answer:

ARE YOU GOING TO DIE?

If the answer is YES, then you protect your estate with life insurance. The End.

Because you only have two choices:

1) let the insurance company pay your estate taxes (and leave a sizable TAX FREE, PROBATE FREE death benefit to your beneficiaries)

Or

2) you “self-insure” which means trying to save up enough income to cover your taxes which leaves LESS to your beneficiaries.

This is why I have a permanent, whole life participating life insurance policy. It will never expire as long as the level (aka never increasing) premiums are up.

Furthermore, my policy keeps up with inflation, so by the time I die, my beneficiaries will recieve my original death benefit PLUS all of my premium payments PLUS several hundred thousand more Death Benefit from growth in my policy.

There is a reason banks and rich people are the number one purchasers of these policies.
……………………………………………………………….
Wow I just read a report that says 10 out of every 10 people will die! Well what do you know!

#143 IHCTD9 on 04.17.18 at 12:37 pm

#130 45north on 04.17.18 at 10:45 am
Grand Étang, Nova Scotia: I am very happy in my house by the sea, but I have become increasingly nervous about the roof. So before this March, I had the great good luck to engage a local carpenter, Gerard Miller who has “stiffened” the rafters of more houses than he can remember.

http://ottawacitizen.com/opinion/columnists/doucet-in-cape-breton-we-dont-suete-the-small-stuff-but-we-do-worry-about-climate-change

Sounds like houses in Cape Breton need extra bracing. If you were building a house from scratch, you could buy trusses with the extra bracing.

Grand Étang, Nova Scotia – not New York City
___

Years ago I was in NS, did the Cabot Trail, stayed overnight at Cape North, watched the tidal bore come up a creek, did whale watching, and ate seafood non stop – awesome trip!

Somewhere along the line there was an old restored 100+ year old house. It was an exhibit IIRC. It was a traditional NS home from way back and it was built like a Brick SH to take the storms. I forget the name of this East Coast style of house, but it was simple, and had about 3 houses worth of wood in it. It was solid as a rock!

This thing for sure could take the abuse – way more than your typical vinyl/foam/chipboard houses they make today.

#144 Shortymac on 04.17.18 at 12:38 pm

This makes me realized I got lucky with my husband’s family and my brothers.

When my husband’s spinster great-aunt died, the house (which was also his great-grandmother’s house, great-aunt took care of great-grandmother) went to his grandmother.

BUT grandma shopped the house around to husband and his cousins and sold it to a cousin of his for very cheap (225k, in 2015 in Alliston you could have gotten over 350k easy). House money was given to grandma to invest and we’ll all get a piece when she passes. Easy.

My brothers and I aren’t that attached to the house we grew up in and the neighborhood is so-so. We’ll do the “does anyone want to buy it at a reduced rate” option, but I think we’ll just end up selling it.

#145 KLNR on 04.17.18 at 12:56 pm

@#3 -=jwk=- on 04.16.18 at 6:19 pm
LOL, sure it is. Toronto is the closest resemblance to NYC that canada has wether you like it our not. Obviously don’t live in Toronto nor have you been there you old curmudgeon.

And you clearly have never lived in NYC. I have and as someone else pointed out, Montreal is FAR closer to NYC – rich history, deep culture – than Toronto is. Toronto’s history starts, effectively, July 24 1967. Before that it was nothing. In reality, still is a nothing on the global scale, at least nothing like NYC.
________________
Total BS. I’ve lived in all 3. Toronto is currently the closest thing to NYC that Canada has to offer. No one said it was as good or as exciting or as historical. Simply the closest thing Canada has to that type of city. Montreal is a great city with history and a Euro flair but nothing like NYC, more like one of it’s smaller boroughs. You clearly haven’t lived in TO.

#146 Wrk.dover on 04.17.18 at 12:57 pm

Meanwhile I have the greenest lawn on this side of the Rockies, here in SW Godawful NS. Sunny and 15 degrees C.

#147 Ronaldo on 04.17.18 at 1:00 pm

#131 IHCTD9 on 04.17.18 at 11:02 am

Totally agree.

#148 LivinLarge on 04.17.18 at 1:04 pm

“Hey genius, tell it to Warren Buffett:”…if I lived in the US then maybe I’d be attentive to what the oracle was saying about why Berkshire doesn’t pay dividends but I don’t. For tax purposes I live in Canada and we have the Dividend Tax Credit at our disposal.

One last time Watson…the DTC is a convoluted but none the less effective method to adjust dividend income to a pre-corporate tax position. There is no double taxing of dividends in Canada, in fact, even after the DTC adjusts to pre-corp tax levels, dividends are given a preferential tax treatment in Canada. I’d have to double check past year’s taxes but right this moment my recollection is that I pay about 36% or 37% on my 1%er dividend income rather than the current 53.5% top marginal rate on other income.

#149 That's Life on 04.17.18 at 1:11 pm

Christine may have lived with her mother for twenty years but it is doubtful that she was a care giver for the entire time. More likely for most of those years she had a place to live and every thing else provided for her. Only the last three or four years would the work required exceeded her living expenses. No point second guessing what could have been done. Enjoy your share of the inheritance and be grateful she was able to leave anything.

#150 LivinLarge on 04.17.18 at 1:13 pm

“Head fake….Almost no one qualifies under those conditions. If you have a job or if u collect OAS or CPP or if u have RRIF income or a company pension plan you have “ other taxable income “.”…now this is 100% correct. However, with careful planning and an education in choosing great dividend paying Canadian shares along with DRIPing them for years, it is very possible to maximize your net, clear income in retirement. I know this to a mathematical fact because I do it and have done it for years.

One of the important aspects to constantly keep in mind when doing it is that you must try to minimize “other income” in retirement. I have railed on repeatedly here about the “trap” that RRSPs and hence resulting RRIFs can suck many people into later in life by saddling them with high taxed “other income” at obligatory minimum withdrawal rates, so in that respect, I am biased.

#151 LivinLarge on 04.17.18 at 1:25 pm

Also, I have repeatedly pointed out that adjusting dividends to pre-corp tax levels isn’t the norm in many or most other jurisdictions other than Canada.

In the jurisdictions I have any interest in residing, divs are simply lumped in with virtually all other forms of income and taxed accordingly. So, while places like the UK may have a top marginal rate of 45%, it’s applied to a
significantly wider cohort of income sources.

#152 IHCTD9 on 04.17.18 at 1:26 pm

#133 Howard on 04.17.18 at 11:13 am

I wonder why more elderly people don’t do this. Sure you can’t predict when you’ll die. But for those in their 80s, or diagnosed with an incurable illness, it would make sense to hand out the dosh to the kids/grandkids while still living. Wouldn’t there also be a tax benefit to the recipients if they get the money as gifts rather than as an inheritance via a will after death?
____

I think if you die broke, the gov should be unable to retroactively tax you on your previous possessions from years past.

But this is Canada, so who knows.

#153 SilverSon on 04.17.18 at 1:54 pm

Seen this happen to a lot of family and friends in my lifetime. It’s a large part of why we chose to only have one kid. The kid gets everything. Done.

#154 smartalox on 04.17.18 at 2:15 pm

@YVR renter #72:

I live in South Vancouver, near the River District. Filled my Beamer (e39 M-sport manual) yesterday at the Petro-Can at SE Marrine and Fraser.
Usually fill it once every three weeks. The manual shift keeps the fuel economy manageable.

Petro-Can has a great deal for 3-cents/L if you use an RBC card.

Your mileage may vary, of course.

#155 Victor V on 04.17.18 at 2:34 pm

#122 Shawn on 04.17.18 at 10:05 am
VWO>SPY, VGK>SPY – both crowded trades.

You will see US equities (especially tech) outperform for 2018…

=========

Agreed regarding US tech ETFs leading.

VGT is a core holding of mine and one of my best performers. More to come…

#156 Stan Brooks on 04.17.18 at 2:49 pm

https://ca.finance.yahoo.com/news/cp-newsalert-law-allow-alberta-205258629.html

EDMONTON — The Alberta government has introduced legislation that would give the energy minister power to restrict the flow of oil, gasoline and natural gas leaving the province.

Once passed, Marg McCuaig-Boyd would be able to direct truckers, pipeline companies and rail operators on how much product could be shipped and when. Violators would face fines of up to $1 million a day for individuals and $10 million a day for corporations.

“The bill sends a clear message: we will use every tool at our disposal to defend Albertans (and) to defend our resources,” Notley said Monday before introducing the proposed law in the legislature.

Fun Boy Three – The Lunatics (have taken over the Asylum)

https://www.youtube.com/watch?v=WRNYqsMIbg0

#157 Honey Dripper on 04.17.18 at 2:50 pm

Wrk.dover

Still waiting on spring here in the centre of the universe Ontario. Count your blessings my friend:)

#158 not so liquid in calgary on 04.17.18 at 2:50 pm

@ Nonplused — I don’t see why taxes need to be paid again. He already paid the taxes.

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the gov’t assumes you sell all assets in the minutes before your death; ergo, taxes due, sucka!

#159 Shawn on 04.17.18 at 2:52 pm

A 5% weight in Canadian equities is reasonable until the next secular bear market occurs.

#160 not so liquid in calgary on 04.17.18 at 2:58 pm

@ Steven Rowlandson on 04.17.18 at 8:57 am
and presume the value to be one dollar.

——————————————————————————————

pretty sure this is no longer valid, as it must be, at least, the assessed value! not legal advice, consult a proper lawyer

#161 not so liquid in calgary on 04.17.18 at 3:04 pm

@ FOUR FINGERS WATSON on 04.17.18 at 10:44 am

————————————————————————————–

do you live in the US? no? then your link is null

#162 AirBnB or Bust on 04.17.18 at 3:14 pm

Uh oh, it looks like the lucrative Air BnB model in Vancouer has just taken a turn for the downside.

If Air BnB requires a posting of Vancouver’s business licenses, that means there will be a paper trail for the CRA to follow.

All that undeclared income from Air BnB fueling housing prices and restricting rental supply may be coming to an end shortly.

http://vancouver.ca/news-calendar/city-signs-first-mou-in-canada-with-airbnb-for-short-term-rentals.aspx

#163 not so liquid in calgary on 04.17.18 at 3:19 pm

@ #97 YVRmoister on 04.17.18 at 1:36 am

—————————————————————————————-

Whole/Universal Life policies are issued for specific situations… consult a life insurance broker

#164 Stan Brooks on 04.17.18 at 3:36 pm

Toronto is a dump.

House proud Canadians are idiots who deserve every drop of water/taxes from the financial tsunami that is going to hit them.

When this credit orgy is over we will deservedly take our proper place in the world wealth pyramid which will be just bellow eastern Europe and (maybe) above Russia.

And I am absolutely/deadly serious here.

#165 aa5 on 04.17.18 at 3:37 pm

In politics, how do you destroy anyone? Answer: Make them live by their own beliefs (Saul Alinsky).

If my fellow BC’ers are so radically anti-oil that we will not even allow oil to transit our province… then cut all oil off to the province.

Obviously all of these green socialists don’t have cars, don’t use electricity, and only buy food grown in a 17th century organic farming.

#166 FOUR FINGERS WATSON on 04.17.18 at 4:13 pm

#148 LivinLarge on 04.17.18 at 1:04 pm
“Hey genius, tell it to Warren Buffett:”…if I lived in the US then maybe I’d be attentive to what the oracle was saying about why Berkshire doesn’t pay dividends but I don’t. For tax purposes I live in Canada and we have the Dividend Tax Credit at our disposal.

One last time Watson…the DTC is a convoluted but none the less effective method to adjust dividend income to a pre-corporate tax position. There is no double taxing of dividends in Canada, in fact, even after the DTC adjusts to pre-corp tax levels, dividends are given a preferential tax treatment in Canada. I’d have to double check past year’s taxes but right this moment my recollection is that I pay about 36% or 37% on my 1%er dividend income rather than the current 53.5% top marginal rate on other income.
………………………

Double taxation is double taxation. BTW I spoke to Warren this morning and he said yer an idiot.

#167 Renter's Revenge! on 04.17.18 at 5:07 pm

@LivinLarge

While it is true that you can earn a lot of dividend income in Canada without paying any tax, there is the concept of Alternative Minimum Tax (AMT), which you have failed to mention in your comments expounding the beneficial tax treatment of Canadian dividend income. It applies if the only income you receive in a year is dividends, and only above a certain amount of dividends, but the minimum amount of dividends you have to receive before it kicks in seems to vary widely by province.

Given the fact that RRSP contributions are made before-tax, and the fact that they are allowed to grow tax free until withdrawn, and the fact that receiving RRIF distributions exempts you from the possibility of paying AMT, and the fact that there are many government benefits that are income-tested (and that dividend income increases your total income faster than regular income because of the gross up, and capital gains even less so), maybe the way the system is set up is not as bad as you think it is, and that most people will be fine making RRSP and TFSA contributions, taxable account investments in Canadian dividend stocks, and paying their mortgage.

Life is grand, ain’t it?

#168 tccontrarian on 04.17.18 at 5:14 pm

As someone else stated, such ‘first world’ problems!

How about they sell the dumpy little place (on a 33-foot lot?), and thus cash out on the current insanity of valuations.
Then, to drown their sorrow from the ‘loss’ experienced, they can collectively contribute 10% of the total towards the building of a school/hospital/…etc. in a 3rd world country. Two hundred grand will go along way in those places. Then, upon seeing the smiles on the many faces which have benefited from their generosity, they will be able to ‘move-on’ from their grief in dealing with attachment issues.

Just an idea, Christine et al.

TCC

#169 LivinLarge on 04.17.18 at 5:47 pm

“and the fact that there are many government benefits that are income-tested (and that dividend income increases your total income faster than regular income because of the gross up, and capital gains even less so)”…I really have ignored most of the things you bring up Christine because, while your statement may be correct, it is also inconsequential. Dividends do indeed pollute the income tested entitlement program qualification but those programs at geared to the low end of the income spectrum and for those of us intending for divs to be our primary income source in our dotage, getting into OAS clawback range isn’t in the books. It takes maybe $7K per month today to live in a nice seniors’ apartment in TO and not too much less out here in the Ontario boonies so that $84K per year net is well into the OAS clawback range. And the really nice feature to buying top flight div paying shares is that they also always have nice cap gains associated as well. OK, 2008-12 was ugly for my capital value but it was also exceptional for the number of shares I acculated in the DRIP so it pretty nicely balanced out.

There is never a perfect world when it comes to long term investments. If there were then the feds would go after it damn quick.

#170 LivinLarge on 04.17.18 at 5:52 pm

“Double taxation is double taxation.”…life slow at the home today? No rice pudding?

As I said last night, you simply don’t understand the taxation of dividends in Canada. Double taxation may indeed be double taxation, it’s just that Qualifying Canadian dividends aren’t double taxed in Canada.

#171 LivinLarge on 04.17.18 at 5:53 pm

Christine, ignore last comment, I meant to address to Renter

#172 DQ on 04.17.18 at 6:31 pm

What’s the problem here? The solution is obvious. Mom passes away, the house gets put up for sale and each of the five children walk away with $340K give or take? There’s no need or requirement to keep you childhood home in your family well into your own 60s.

What these people want to do is preserve the status quo of owning the home without financial penalty. Apparently they want to do this to preserve memories from decades ago, because apparently memories disappear when you sell the house.

Newsflash, those memories live on in your hearts and brains, not at a physical address. Move out and move on, with an additional $340K in each of your bank accounts. Good grief.

#173 Leichendiener on 04.17.18 at 7:49 pm

From experience a testamentary gift in a will can be a monkey’s paw. Keep it simple.

#174 burnaby south gardener on 04.17.18 at 10:01 pm

In memory of Barbara Bush, taken from her obit in the National Post: “In 1990, Barbara Bush gave the commencement address at all-women Wellesley College. Some had protested her selection because she was prominent only through the achievements of her husband. Her speech that day was rated by a survey of scholars in 1999 as one of the top 100 speeches of the century.

“Cherish your human connections,” Mrs. Bush told graduates. “At the end of your life, you will never regret not having passed one more test, winning one more verdict or not closing one more deal. You will regret time not spent with a husband, a child, a friend or a parent.””

#175 Rabble on 04.17.18 at 10:39 pm

Got an email today from a certain blue and gold bank. Offered to extend my pre-B20 mortgage pre-approval for an additional 120 days. . .

#176 Buttercup on 04.18.18 at 3:36 am

LivinLarge…no one hiding anything here! What I meant to say was more a comment on how some other countries assess tax on inheritances.

#103 Correction…
“Thankful the FIL got some advice BEFORE moving back there (some 45 years later), which was to set up a legal trust of some type. He was going to just leave most of his cash in Canada until the son he was living with looked into it. Quite a shocker!”

Those funds were earned through a lot of hard work and nearly 40 years in a family business in Canada, on which all Cdn income taxes were paid. IMHO It would truly have been punitive to have to fork over 40%, basically to a ‘foreign’ government, of what largely amounted to the after-tax income earned all those years.

Epilogue…after two years they left the dreary British weather for sunny Portugal! Britain was involved in winding up the estate however, as was Canada. Three countries makes for a busy executor.
Beware! Estate planning can certainly be complicated if you plan to live out your golden years elsewhere.

#177 LivinLarge on 04.18.18 at 9:31 am

“Beware! Estate planning can certainly be complicated if you plan to live out your golden years elsewhere.”….SOOOO TRUE!!!

As for forking over 40% to a foreign government, I am so farrrrrr from any sort of expert but “after tax” foereign incomes are normally credited to a tax payer via the reciprocal anti-double taxation treaties between
countries.

One thing I have found however is there is very often a misconception over what precisely is “after tax” income. For example, capital gains in Canada seems to be perceived by many here as “after tax” income because the gain was earned on an investment intially made with after tax assets. Back in the autumn I had an argument here with someone who tried to prove some of my anti-RSP assertions wrong by giving me a rambling calculation that unfortunately hinged on cap gains being taxed on an entire investment rather than on just 1/2 the gains. Needless to say, their entire premise collapsed once they understood the actual method that cap gains are taxed.

All that said, I certainly ageee with you that navigating tax regimes in other jurisdictions is a freakin’ mine field.

I would have become an expat years ago if the EU & UK treated divs and cap gains as advatageously as they are treated in Canada.