Planning

Planning

When I was a member of Parliament (the first time, when I behaved), the country’s realtors wandered around the lobby of the House of Commons trying to sell a crazy plan. People should be able to drain their RRSPs, they said, to buy houses.

I opposed it, but the government caved. So now young horny couples can game the system using what’s called the Home Buyer’s Plan. If they have, say, $50,000 saved for a downpayment, they can plop it into two RRSPs, keep it for ninety days then remove it tax-free to buy a fabulous condo which is falling in value. For doing that they’ll get a tax rebate big enough to buy gleaming appliances (white is the new black), or two BB Z10s, an HD flat screen and a week in Mexico. All paid for by the government.

This is but one example of how the RRSP has evolved since being invented in the 1950s so Baby Boomers would not retire stupid and bankrupt the country. It didn’t work. In recent years the amount of money going into retirement savings plans has plunged just as a torrent of cash jammed into houses. Today we have a bizarre situation. Over 70% of people have no pension, but 70% of people own real estate. How is that supposed to work?

Without a doubt, you should worry more about impoverished wrinklies overrunning all the Costcos and clogging up the roads in Korean Imitation Automobiles (KIAs) than falling housing values. Both will happen together, but at least real estate doesn’t whine.

While Boomers may have largely blown their privileged circumstances, you don’t need to. Given the fact there are just two weeks or so left until the latest tax deadline, let’s use at least one post to review some uses for RRSPs – besides the aforementioned HBP. First, my oft-stated view that these retirement savings plans are no longer the best way to save for retirement. Many reasons for that. I fully expect personal tax rates to be higher in twenty years, for example, which means the tax break you get now for contributing could be less than the tax payable at the other end.

Plus, since all cash taken from an RRSP is taxed as income, you lose the advantage of earning dividends and capital gains inside a plan. Better in the long run to be owning assets producing those returns in a non-registered account. Or a TFSA, for that matter, where withdrawals are untaxable.

In fact the TFSA over the years to come will eclipse the traditional RRSP as the chief vehicle for retirement financing. This means the first $5,500 you invest this year should go into your TFSA, and make sure it doesn’t end up in a parasitic GIC.

So what good are RRSPs? To slice a big outstanding tax bill from last year, of course, since contributions are deductible from taxable income. But instead of leaving the money there until you need a walker and underwear that sucks when you sneeze, use the RRSP for tax-shifting, rather than tax deferral. That means banking income in good years to take during years when you live on less. That could be thanks to a sabbatical, a pregnancy or joyous unemployment.

Also remember you can put money into a plan during working months to take out when you go to school. It’s called the Lifelong Learning Plan – good for withdrawing $20,000 which you can use for a bunch of years and then take a decade to repay. This is also good for income-splitting, since you can finance your spouse’s time in school from your own plan, after you enjoyed the tax deductions.

Speaking of splitting, this is something an RSP excels at. Open a spousal plan, put in contributions up to your own limit, deduct them from your income and after three years the money belongs to your spouse. Why do this? Because if you’re the higher earner you get to reduce tax while your less-taxed spouse ultimately receives the money, and can withdraw it at a lower rate. You’ve effectively transferred income, subsidized by the feds.

Ditto for a contribution in kind. You don’t require money to make an RRSP contribution, since all you need do is transfer existing investment assets into a plan. So for taking taxable stuff and making it non-taxable, you receive a tax refund (although you might trigger some lowly-taxed capital gains in the process).

RRSPs are also nifty for financing a mat leave, of course. Just open that spousal plan far enough in advance of the Big Swim, so that money can be withdrawn at (hopefully) no tax to finance the year at home. And there’s always the RRSP mortgage, which allows you to hold the mortgage on your own home and make mortgage payments into your retirement plan, instead of to the bank. A neat idea, however it costs to set up and the returns are low. But so is the risk.

In short, there are lots of ways to use an RRSP.

How many did the nice lady at the bank tell you about? I thought so.

169 comments ↓

#1 Dr. Hoof Hearted on 02.11.13 at 9:05 pm

Fiirssszzzttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttt !!

#2 Jordan Newell on 02.11.13 at 9:09 pm

Love the blog!

#3 marco on 02.11.13 at 9:10 pm

Garth great advice. But people know that the only tax free game in town is your primary residence. And you can’t live or have sex in an rrsp. Dude c mon. You are smartest guy in the room. But basic needs you not heed.

As many are about to find, real estate losses are not deductible. Unlike sex. — Garth

#4 chopper on 02.11.13 at 9:12 pm

I agree with Garth, get aTFSA and max out on it. That is what I did.
Thanks for all the free advice and sharing with us what the banksters hide from the general public.

#5 vancouverite on 02.11.13 at 9:14 pm

Garth, thanks for the great writeup on RRSPs!

#6 Burt on 02.11.13 at 9:15 pm

“Ditto for a contribution in kind. You don’t require money to make an RRSP contribution, since all you need do is transfer existing investment assets into a plan. So for taking taxable stuff and making it non-taxable, you receive a tax refund (although you might trigger some lowly-taxed capital gains in the process).”

To clarify, is it possible to transfer an existing equity position to an RRSP to avoid taxes, and in fact gain a tax deduction?

This is brilliant, never knew its possible.

I assume this is information an accountant should be able to clarify?

Yes it is. But if you have made money on the stock cap gains will be triggered with the flow through. — Garth

#7 Stephen Harper Is Terribly Sexy on 02.11.13 at 9:16 pm

Foist upon the unknowing and too eager early boomers, the RRSP is now looking more and more like a second or third choice for smart planners.

#8 Aussie Roy on 02.11.13 at 9:17 pm

Aussie Update

Prof Steve Keen – Minsky modeling program

http://www.youtube.com/playlist?list=PLqs7-zw9kiAKl9Sw6RXrUPrfx5koa_ftg&feature=view_all

http://www.debtdeflation.com/blogs/2013/02/09/kickstart-minsky-now/

#9 EIT on 02.11.13 at 9:23 pm

“joyous unemployment” – damn straight,… I wish

I wonder if those doctors can put corporate medical shares in TFSAs and reap the rewards of Tax free dividends. That would be naughty.

#10 David on 02.11.13 at 9:26 pm

The only financial concept as difficult to get across to people as the idea that real estate should not fund retirement is that an RRSP shouldn’t either.

I don’t know how you have the patience to explain this to people who seem immune to understanding.

#11 Lilyjoe on 02.11.13 at 9:33 pm

Thanks Garth~
I was just tossing this around. My TFSA is maxed so I am going to have my husband do a spousal contribution with our extra money, to get the return. I will then worry about the tax avoidence later when pulling it out in 25 years.
I want to do ~the rule of 72~ with our investments right now!

#12 Uh Oh Canada on 02.11.13 at 9:36 pm

What’s wrong with Costco anyways?

#13 Short Vowels on 02.11.13 at 9:40 pm

Garth – Thanks for the advice on RRSPs over the years. Implementing your “fund the TFSA w/RRSP refund” plan this year. [email protected] sees all the zeros in our accounts and says “oh you must be doing the HBP!”.

Renting a new reno in The Beach heavily subsidized by my landlord, k thx.

Keep preaching the good word – it gets through to some of us.

#14 Gunboat denier on 02.11.13 at 9:41 pm

“And there’s always the RRSP mortgage, which allows
you to hold the mortgage on your own home and make
mortgage payments into your retirement plan, instead of
to the bank. A neat idea, however it costs to set up and
the returns are low. But so is the risk.” – Garth

You pay money back into the plan with after-tax dollars,
so it makes sense to have a low interest rate and top up the plan with before tax dollars.

But the returns and risk reflect the investment products
the returned money purchases.

#15 Chaddywack on 02.11.13 at 9:44 pm

What about buying a house, taking out $25,000, and not paying it back Garth? You’re effectively splitting that $25k over 15 years which is a tiny tax hit.

#16 Richard and Zeus on 02.11.13 at 9:54 pm

As many are about to find, real estate losses are not deductible. Unlike sex. — Garth
————————————————————-
Neither are RRSP losses when this private banker induced stock Ponzi Scheme created with trillions of invented money then High Frequency Traded by Goldman Sucks crashes to earth like RE…….all those who sold at the top of the RE….will be at the bottom with their stock portfolios……

#17 AwesomeBrian on 02.11.13 at 9:57 pm

Geez, I assumed that everyone would have the same tax rate when withdrawing RRSP’s … I had no idea it was based on one’s income!

#18 Humpty Dumpty on 02.11.13 at 9:59 pm

Since its the year of “The Snake”, I thought this would be an appropiate time to “Plan” my exit strategy….

When your singing the language of dragon lady, its certainly going to be one very interesting year…..

Who knows, maybe the next pope is a Quebeecor….

Guess they already booked her to sing at that dragons great entry….

I hear their serving Poutin at the vatican!

http://www.huffingtonpost.ca/2013/02/11/celine-dion-chinese-new-year_n_2662788.html

#19 John Dominsas on 02.11.13 at 10:05 pm

I just bought a provincial strip bond at 3.813% maturing in 2036-April-5 in my a TFSA. My financial adviser said the $5,500 TFSA maximum contribution will be worth $13,080.11 at maturity and it is an equivalent to a 7.62% net of tax return without compounding and a 11.90% taxable return with compounding at the highest tax bracket. . He gave me a report showing me a strategy of using provincial strips with different maturities from 10 to 25 years can boost my overall return in my TFSA’s.

He said as strip bonds come due you can reinvest them at higher interest rates/bond yields and the interest rates/bond yields are about 40% higher than his highest 5 year GIC’s of 2.60% that are available. He said it is like dollar cost averaging but with bonds.The annual interest is $327.16 income tax free.It looks good to me.

You have low expectations. — Garth

#20 blase on 02.11.13 at 10:06 pm

Calgary market is on fire Garth. Multiple offers, realtors waiting outside homes with clients to make counter offers. When is the best-before date on the Calgary market?

#21 94 on 02.11.13 at 10:14 pm

Hi Garth,

Just doing some research here as I am approaching my TFSA max.
Can I transfer securities out of the TFSA without having to sell and reinvest?
And would either dividend paying assets or cap gains securities be the best held outside in a lower tax bracket?

Thanks for all your work.

Yes, and yes. — Garth

#22 Drill Baby Drill on 02.11.13 at 10:17 pm

Please note Pathetic Blog; Calgary always falls the quickest and also rises the quickest that is why you always must be in tune with the Cowtown economy. You will always do well in Alberta regardless of the boom and bust cycle. Right now Alberta is struggling with it’s provincial oil export options but when Alta does figure out the problem and finds the solution Alta always prospers like no other province. I will not move from Alta because of this. I have been working here since 1975.

#23 Eastward on 02.11.13 at 10:19 pm

I will be moving from Victoria to Montreal in March. This blog has been tremendously valuable in pointing me to specific information on real estate trends and statistics on the west coast, but there seems to be little information regarding Montreal. Is it as bad in Montreal (notably Westmount, Outremont, and the Plateau) as in Toronto and Vancouver/Victoria? Any web sites I should follow to keep track of the trend in Montreal?

#24 not 1st on 02.11.13 at 10:21 pm

Garth. putting you money in any government sponsored plan makes it a convenient target in the future when the gov’t need to make up shortfalls. With a stroke of a pen, they can change the tax rules or clawbacks or withdrawl periods etc etc. Look at all the millennial paying into CPP and OAS that they will never see.

#25 Jamie on 02.11.13 at 10:22 pm

Garth, thanks for your advice. Maxed out on TFSA’s, making money as per your instructions unlike my previous mutual funds. Question: my son has turned 18, can he put just $5500.00 into TFSA’s or max out at $25,500.00?

#26 TORONTO_GET_REAL on 02.11.13 at 10:31 pm

multiple offers here in toronto. RE is on fire for detach homes.

#27 Mark on 02.11.13 at 10:31 pm

“I just bought a provincial strip bond at 3.813% maturing in 2036-April-5 in my a TFSA.”

3.813% inside a TFSA on something that has another 23 years until maturity? Crazy. You can buy the stock market at an earnings yield in excess of 6% these days, with some actual growth if history is any indication. Instead of some bond issued by a very insolvent entity.

“Calgary market is on fire Garth. Multiple offers, realtors waiting outside homes with clients to make counter offers. When is the best-before date on the Calgary market?”

When you check out of the mental ward after being treated for delusion. Because that is very much the opposite of what is happening in Calgary.

#28 gaspr on 02.11.13 at 10:36 pm

One thing I learned about RRSP’s is how they are taxed when the holder dies. If the deceased has a spouse, the total amount of the RRSP can be rolled over to the surviving spouse with no tax implications. If however, there is no spouse, then the total amount of the RRSP gets added to the deceased final tax return and is taxed as income. If the deceased happens to die at or near the end of the fiscal year after earning substantial income, it means that the CRA will grab possibly 40 to 50% (depending on the marginal tax rate) of every dollar of the RRSP before the remainder goes to the estate. Kinda makes the TFSA look a lot better…

#29 Citizen on 02.11.13 at 10:36 pm

#15 Chaddywack on 02.11.13 at 9:44 pm

What about buying a house, taking out $25,000, and not paying it back Garth? You’re effectively splitting that $25k over 15 years which is a tiny tax hit.

I like it. Splitting 25K over 15 years sounds great. Assuming you stay in the same tax break, your 15 tax payments would be reduced by current inflation every year. LOL

#30 T5>myT4 on 02.11.13 at 10:41 pm

Income splitting is a great planning tool with an RRSP.

Luckily you can continue to split your income after the divorce courts. That’s getting split in a whole other way.

#31 espressobob on 02.11.13 at 10:42 pm

TFSA and a discount brokerage account can work well together.

Using growth ETF’s with a long term yield of 7% annually can produce one helluva return!

Starting with $25500 & a 2% increase in contribution room yearly (won’t hold breath), maxing out each January would leave one with $584,109 after 25 years!

And people put GIC’s in there?????

#32 lawboy on 02.11.13 at 10:47 pm

http://business.financialpost.com/2013/02/11/high-income-couple-has-to-deal-with-some-real-estate-headaches/

Jesus wept.

#33 White Rock Mom on 02.11.13 at 10:49 pm

As per my accountant my husband cannot contribute to the Spousal RRSP for two years. If I withdraw within those two years the income is attributed to my husband. Two years after his last contribution I can withdraw and the income is attributed to me.

#34 DJB on 02.11.13 at 10:58 pm

#18 John Dominsas

Did your finacial guy explain how your principle purchasing power will be diminished over the term of the bond by inflation?

According to my HP 10B your purchasing power of $5500 invested in a bond facing 2.3% inflation for 23 years will yeild $3260 worth of purchasing power upon maturity.

Inflation is bad for bond holders or buyers of debt.

#35 blase on 02.11.13 at 10:58 pm

#25 Mark: I have no skin in the game there, but I do have a relative who is a realtor there. This is what is happening. This is the housing market though. If you own a condo there, I can’t speak to that.

#36 OZY -fake kanatian gov products on 02.11.13 at 11:01 pm

Fake kanatian gov products: RRSP, TSFA, RESP – to fool citizens – a bread will be 25 dollars in 20 years or mayve 100. stock market crashes/up/down will not cope for the loss of purchase power. Gathilo, understand someone has to pay, and it’s the 99%
I bought a house in 2011 to protect my dough from inflation. Already up like 10%, and as a commneter say, if i want to sell, all profit is not taxable. Why screw with RRSP, TSFA, RESP – devil’s vechicles?????
Remmeber the bread at 100 bucks.

Someone left the gate open. — Garth

#37 Dave on 02.11.13 at 11:07 pm

I would also recommend to your readers (especially if they are old) that they research the “RRSP meltdown strategy”.

It’s an effective way to ensure that a giant RRSP nest-egg is not taxed heavily in the year that you die.

Garth – As an aside I have 2 suggestions for you.

1) I would find it easier to read your articles if you widened the margins just a little bit to allow for another 20-30 characters per line. Easier on the eyes

2) More babes in the photos.

I can also widen the babes if you’d like. — Garth

#38 Muddy Waters on 02.11.13 at 11:08 pm

“….How many did the nice lady at the bank tell you about? I thought so…..”
——————-

Myth: Banks offer advice to benefit consumers.
Truth: Banks give consumer advice to benefit banks.

Cue the annual spring RRSP advertising blitz:
“You make us richer when you don’t think!”

#39 Consciously unaware on 02.11.13 at 11:09 pm

Is it best to open an RRSP at the bank? And a (non?)-registered TFSA with a fee based financial advisor? I already have a TFSA with the bank which saves me $4 a month on account fees. Can I have two opened at once to save the $4 as well as invest mainly in the non registered? Or am I really off the mark here?

Garth- how practical is it to be advised my you although im living on the west coast.

Four bucks. Wow. Yes, you need advice. — Garth

#40 AK on 02.11.13 at 11:13 pm

#1 Dr. Hoof Hearted on 02.11.13 at 9:05 pm

“Fiirssszzzttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttt !!”

Bravo, Dude………..

#41 Vamanos Pest on 02.11.13 at 11:15 pm

I’ve made this point pretty much every time Garth has discussed RRSPs vs TFSAs, but this time you walked right into it:
“this means banking Income in good years to take in years when you live on less”
Now how on Earth does retirement not meet that criteria?! You even say unemployment meets the criteria. Well, is retirement not just unemployment by choice?
And, with respect to rising tax rates, in your own words “that’s right, let’s plan around laws that don’t exist.”

I’m not saying do RRSP over TFSA. i’m saying to anyone reading this, do both. I make a max RRSP contribution every year, and with the tax savings make a (almost) max TFSA contribution (4800$ last year, might need to find an extra $500 to max out this year though).

If the bulk of your retirement funds are registered you have more faith in the government than many. — Garth

#42 JMS on 02.11.13 at 11:16 pm

Quick question… can one transform a personal RRSP into a spousal RRSP after the fact? No biggie if I can’t, I think I’ve only contributed a whopping 2k to my personal one. Filling up that TSFA to the max first!

Thanks…

No. — Garth

#43 JSS on 02.11.13 at 11:19 pm

I’m interested in becoming a Kia dealer. How do I become one?

#44 AK on 02.11.13 at 11:20 pm

#18 John Dominsas on 02.11.13 at 10:05 pm

“I just bought a provincial strip bond at 3.813% maturing in 2036-April-5 in my a TFSA. My financial adviser said the $5,500 TFSA maximum contribution will be worth $13,080.11 at maturity and it is an equivalent to a 7.62% net of tax return without compounding and a 11.90% taxable return with compounding at the highest tax bracket. . He gave me a report showing me a strategy of using provincial strips with different maturities from 10 to 25 years can boost my overall return in my TFSA’s.”

—————————————————————-

You need to get a new financial advisor.

#45 Sebee on 02.11.13 at 11:21 pm

BTW

Happy New Year to all, HAM included.

‘Tis the year of the snake. Some things that happened in past years of snake; 1929 crash, Pearl Harbor, 9/11.

Will Canadian RE crash be this snakes’s venom?

#46 Marc in Montréal on 02.11.13 at 11:32 pm

Greater Montréal Real Estate Board (GMREB) Full of it! (who knew!)

La Presse newspaper journalist : 4% decline in median condo prices in Greater MTL Area.

GMREB director : Nothing to worry about, our homemade Housing Price Index (some selected properties with similar features, whatever that means) shows a 2.6 increase for the Montreal condo category.

Desjardins economist : the January pause is not the new norm.

M Hanson advisor : January statistics are awful.

http://affaires.lapresse.ca/economie/immobilier/201302/08/01-4619874-immobilier-montrealais-le-prix-des-condos-recule-de-4.php

#47 EI Dude on 02.11.13 at 11:37 pm

There is a new study out from UCLA regarding social media/blogs. It explains that the guys who repeated post ‘first’ actually suffer from Small Penis Syndrome. The study shows they are trying to over compensate socially for their private short comings by being the best at something. Anything. Maybe these first posters need our compassion rather than our anger.

#48 Grim Reaper/Crypt Speculator on 02.11.13 at 11:44 pm

Dr.Waynker:

As a pre-emptive strike to yer ad nauseum a$$hole WMD..

Just remember…

“Best Before” date and “Expiry” date don’t necessarily coincide.

#49 Junius on 02.11.13 at 11:48 pm

#47 EI Dude,

You said,”here is a new study out from UCLA regarding social media/blogs. It explains that the guys who repeated post ‘first’ actually suffer from Small Penis Syndrome.”

Silly me. I thought it was just ADD combined with a smallish brain.

#50 Eastward on 02.11.13 at 11:58 pm

#46 Marc-in-Montreal, thanks for that link. I had already seen it, another indication that there is very little in the way of informed discussions about the Montreal housing market going on online. Or do you know of any blogs similar to this and the many others (like house hunt victoria) that focus specifically on montreal? PS Blogs in French is no problem…

#51 Cici on 02.11.13 at 11:59 pm

Great post as usual Garth.

But, could you please do a post about the benefits of employer pension plans?

My BF says I should be contributing to mine (managed privately through Standard Life), but I don’t trust them, even if my company is contributing a certain percentage based on my own contributions. He says all the funds are safe because they are managed by a third party.

What are the risks? What about the Nortel and Bell and Air Canada and all the other employees that got screwed out of their money because their pensions were underfunded or their companies went bankrupt used their employees’ savings to pay back their creditors? Or were those defined benefits plans?

And what about the crappy returns? From what I can tell, they only offer mutual funds with dismal returns. What’s the best way to analyze the funds?

Thanks

#52 The Prophet Elijah on 02.11.13 at 11:59 pm

#22 Drill Baby Drill on 02.11.13 at 10:17 pm

Please note Pathetic Blog; Calgary always falls the quickest and also rises the quickest that is why you always must be in tune with the Cowtown economy. You will always do well in Alberta regardless of the boom and bust cycle. Right now Alberta is struggling with it’s provincial oil export options but when Alta does figure out the problem and finds the solution Alta always prospers like no other province. I will not move from Alta because of this. I have been working here since 1975.
———————————————————
Yep there was a time when natural gas was hot at $13 bucks, then dropped to $3 and stayed there 5 years and counting. Then there was sandy oil, once selling for $100 now $51 and dropping.
Hmm what will Alberta pull out of the hat to save the province this time, maybe they’ll strike gold – I know metal heads like the prophet would do extremely well!

#53 Scott (GVRD) on 02.12.13 at 12:00 am

Off-topic from this post but still relevant to RE…

I monitor one townhouse complex in South Surrey for price changes, listings, etc. A flyer [1] was circulated to all residents in the area by Homelife Benchmark Realty Corp., pimping their services as well as showing the active listing in the complex as well as the recent sales. One thing though, 70% of it is wrong data.

Active listings

#170
They say: $369,000
Reality: $364,000 since ~Jan. 4, 2013.

#81
They say: $424,900
Reality: $419,900 since ~Jan. 11, 2013.

#262
They say: $439,900
Reality: $429,900 since ~Jan. 11, 2013.

#197
They say: $568,000
Reality: No longer listed. It stopped being listed around Jan. 4, 2013!

#36
They say: $670,000
Reality: $670,000. Hey, they got 1 out of 5 correct. However, it has been listed since Sept. 21, 2012 without one price drop, yet others in the complex have had multiple drops. Ouch.

Sold (in last 120 days)

The sale price isn’t the issue here, the date is. 120 days ago only brings us to the October 2012 timeframe.

#256
Actually sold: June 23, 2012

#26
Actually sold: July 17, 2012

#53
Actually sold: July 16, 2012

#113
Actually sold: April 25, 2012

#76
This might be the only one they got right, but it must have been sold in 2013 because there is no record of its sale in the 2013 BC assessments. Considering most of their active listing information is from before January 2013, I fail to see how they were able to get this sale in their data.

#67
Actually sold: October 19, 2012. It may sneak into the 120 day threshold.

Do these people not have a shred of integrity?

[1] http://imgur.com/FSJUTsR

#54 DR. WAYNE on 02.12.13 at 12:04 am

#1 Dr. Hoof Hearted on 02.11.13 at 9:05 pm

==================

As we ‘all’ can see, this consummate A$$hole (with a capital ‘A’) has great difficulty staying within the designated lines/boundaries … any kindergarten pupil knows better … but, as is his pattern, such intrinsic cranial requirements completely escapes him.

#55 patsan on 02.12.13 at 12:12 am

A transfer of securities in kind from a non-registered to a registered account can also trigger capital losses. These losses are considered artificial and cannot be claimed to reduce taxes.

#56 Allan on 02.12.13 at 12:14 am

#3 marco on 02.11.13 at 9:10 pm
“Garth great advice. But people know that the only tax free game in town is your primary residence.”
——————
Don’t they pay property taxes, and other minor ones like HST on renovations, and insurance as well? Year after year it eats up most of their gains.
By contrast, I dont have to pay 10K/year just because I own 1M stock portfolio.

#57 NAGA on 02.12.13 at 12:21 am

Garth – I appreciate the fact that you are providing broader comments rather than same old RE. I know I have been accused of being an RE supporter – but I have moved on as I reached the conslcusion that RE would stagnate (please note NOT collapse by 30% to 50% as some want to believe). In the GTA even 10 plexes have a negative CAP rate so unless u can go really big as the REITs can stay out as an investment.

Best tip on RRSPs that probably applies to this blog dogs is that if you are grossing less than $50K/year stay away from them – totally innefficent and your are screwing yourself out of GAINS in Ontario and possibly clawback on OAS in your old age.

I am more interested in continuing to build a portfoilio protected from the taxman and maximizing transfer to kids…..but not right now.

I have previoously asked for your thoughts on UL and WL for this as some rules re UL will be changing soon due to lax or very favourable tax treatment. Hope you will do some research in this are and rerpot on it.

My next topic of interest is the efficiency of investing in “Corporate Class Funds” again based on my initial understanding of some of their features these provide lots of opportunity to structure portfolios to optimize taxes thereby incresing overall returns.

In a real low interest rate environment this is a great time to be investing/increasing holdings in quality yielding stocks, ETF’s and Mutual Funds. I m predicting that this period of low interest rates will last well into the end of this decade and possibly spill over into the next – and history will compare this decade to the 1930’s.

Keep up the good work and avoid the slippery slope of regurgitating too much RE.

Oh and please do not assign me homework by directing me to your many books……..rather have a summary on this blog.

#58 Sebee on 02.12.13 at 12:22 am

…Open a spousal plan, put in contributions up to your own limit…

To be clear…individual’s limit. Example, husband has 25k of room bit wife has $50k – full $75k can be contributed amd deducted in a single year.

#59 Intuitive Missus on 02.12.13 at 12:22 am

#32 -Lawboy

“Jesus wept”.

What a perfect comment for this story. Can you believe the sheer stupidity?

#60 Dr. Hoof-Hearted on 02.12.13 at 12:33 am

Yessir……

When the Big Mushroom cloud hits….and the (4 )Horsemen of the Apocalypse come a-riding(KIAS optional)…Dr Wayne will be relegated to cleaning up the [email protected]@P of the aforementioned and of those that didn’t heed my warning.

In other words …..do you want a marksmen who hits the bullseye of FIRRRZZZSSTTTT (several GOLD baby G-O-L-D medals ) to lead the battle cry….or some a$$hole like Doc Whineker who graduated 250th in a class of 175 who is so slow on the draw he’s still whining about the Beatles break-up?.

#61 Min in Mission on 02.12.13 at 12:33 am

Man, I wish I was smart enough to do some of the sh** that gets mentioned here.

My instinct tells me that all of this is good advice, and imminently do-able, yet I just can’t seem to get my head into it.

I always end up with that “deer in the headlights” look when I start dealing with [email protected] Nothing at all to do with how she actually looks!!

#62 henry on 02.12.13 at 12:38 am

@ Conciously unaware. I assume you’re with RBC. You just need to have $25 in the TFSA to save the $4 a month with them. The best I did with them was 10% in 2009 with the portfolio that only includes RBC mutual funds. 10% sounds good but if I took the same money and bought ticker SPY (which tracks the S&P 500) I would have returned close to 24%-65% that same year. Questrade let’s you manage the account yourself and buy anything even currencies and metals if that’s your thing.

#63 Auto Motif on 02.12.13 at 1:11 am

Thanks Garth for the rundown on how to use RRSPs for fun and profit.

Maybe your next peripheral research topic could be on what car brand to use instead of KIAs. Since Peter Schreyer jumped over from the Volkswagen Group to head KIA’s design department, there has been a major improvement… probably leapfrogging 90% of Japanese designs these days. It’s why Schreyer has just been appointed a director of Hyundai, KIA’s parent, so he gets to oversee all Hyundai and KIA designs.

In short, Korean autos will be way too hip for wrinklies to buy. And premium-ish pricing will probably follow… so the best bets for busted boomers may turn out to be Cherys, Geelys or Hafeis from the land of once-hot asian money.

#64 John Dominsas on 02.12.13 at 1:21 am

Everyone who criticized me thinks that there will be an economic recovery like the 1990’s. Interest rate cuts are all used up,companies can make more money in emerging markets but currency,economic. and political risks are great there. Inflation will not mean much higher interest rates as most people lost confidence in the equity,real estate markets and baby boomers need income.

Everyone criticizing me please show me specific examples since 2000 where you earned 6%, 7% until 2013. I bought strip bonds in 2000 at 6.70% that mature in 2029 that is a 19.16% with compounding. All of you still believe what happened in the 1990’s is coming back.You are all dreaming. My financial adviser is saying do not count on more than 5.25% for a balanced portfolio 40% bonds,60% equities for the next 20 years. The next 13 years you will see that 6% to 7% returns are not going to happen.My financial adviser is realistic and used this strategy the last 25 years and has a net worth of $2,700,000 without his primary residence. In the 1990’s when everyone else was using 12%,15% annual stock market returns for financial planning he was using 7.5%.

The guy that said bread will be $100, if this happens we will all be in a war so economic problems will be the least of all our problems. It is easy to be over optimistic. One very important thing I learned, when somebody says it is easy to make a great deal of money it is not true indeed. Nobody likes a realist.

#65 John Dominsas on 02.12.13 at 1:34 am

to DJB #34 It looks like you don’t read much.You are using a 2.30% annual inflation rate so $5,500 today would mean you would need $9,314.75 in equivalent dollars to preserve your purchasing power. The TFSA’s value is $13,080.11 in 23.169 years. You must read the whole post to understand this.

#66 some reader on 02.12.13 at 1:49 am

#37
Garth – As an aside I have 2 suggestions for you.
1) I would find it easier to read your articles if you widened the margins
just a little bit to allow for another 20-30 characters per line. Easier on
the eyes

————

please dont pay attention to this. the way they are now is great for mobiles and tablets.

20,30 more chars might make it impossible in some devices.

there are many thing to improve in the blog, but not that one, at least not under the current format.

#67 Planning — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate « The Affluent Boomer™ on 02.12.13 at 1:55 am

[…] via Planning — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. […]

#68 Kate in Vancouver on 02.12.13 at 1:56 am

Hi Garth,
I seldom comment, but I am very appreciative of all you do with this blog? You have led me to learning so much about my finances and how to plan for the future, and I feel a lightness and freedom I didn’t know I could have.

This blog, to me, may just be your most important public service yet. :-)

I have a question for you about RRSPs- and I can’t seem to find the answer anywhere else!
I’m contributing to a defined benefit plan at work, and recently came back from a mat leave. I’d like to buy back the pensionable service, and was wondering if I should put the $ first in RSPs for 90 days to get the tax rebate, (I’d put the rebate in my TFSA- thanks for all your advice on the benefits of them over RSPs) – and then transfer the funds over from the RSP for thr buy-back.
Kind of like the HBP but for my pension instead? Can I do that or is there tax complications for next year, or do I lose contribution room?
Many thanks for your assistance.

#69 Kate in Vancouver on 02.12.13 at 1:57 am

Sorry for the typos and misplaced ‘?’ – autocorrect is going to be the death of me. ;-)

#70 RTFM on 02.12.13 at 2:02 am

@Jamie #25

Read the rules, don’t rely on others to do all the work. You son can not invest $25,500 into his TFSA when he turns 18. He can begin investing at the age of 18. At that time he can invest the maximum of, wait for it, $5,500 annually; until they change the maximum in the future.

#71 DR. WAYNE on 02.12.13 at 2:03 am

Korean Imitation Automobiles (KIAs)

========================

Fricken brilliant … sh++, I wished I’d thought of that.

#72 lilyflor on 02.12.13 at 3:05 am

There is not very much information on the Montreal real estate market, unfortunately, at least not much that I have found in the last couple of years. Most seem to be blogs by realtors, and of course I don’t read those

Here are a few I have managed to find:
http://blogs.montrealgazette.com/category/business/real-deal/
http://www.theeconomicanalyst.com/content/revisiting-important-post-impending-construction-slowdown-and-montreal-sales-declines
and http://www.chpc.biz/scorecard.html

#73 Tony on 02.12.13 at 3:11 am

Re: #61 Min in Mission on 02.12.13 at 12:33 am

What ever you do don’t and i mean don’t take most of these other peoples’ advice. If you can’t short stocks then run for the hills the stock market has never been more overvalued ever on record.

#74 Canuck Abroad on 02.12.13 at 3:35 am

Garth is there also a way to receive income from an RRSP tax free? E.g. you borrow against an investment portfolio and then you can write off the interest payments against the RRSP income or something like that? Could you (or someone else) refer me to where this has been posted before, if so? Thanks.

#75 Valerie Keefe on 02.12.13 at 3:47 am

Garth, one note, though you’re quite right about not buying a home at this moment:

Given that you can loan yourself money from an RRSP to purchase a home, and that an RRSP requires you to treat the cash you withdraw as taxable income, wouldn’t it be a good idea to buy a home with the funds in an RRSP, for the simple reason that an appropriately valued home’s largest income stream isn’t real estate appreciation, but rather the implicit rental income that those occupying the home enjoy?

In that way, loaning yourself money from your RRSP to buy a home is sort of like being able to buy stock, live off the dividends, and have no additional taxable income at the end of the line, just the principal. Certainly seems better than liquidating something that yields cash.

Feel free to tell me why I’m wrong. It’s the only way I’ll learn.

#76 Buy? Curious? on 02.12.13 at 5:41 am

Ah, Boomers, my heart bleeds for them! RRSP’s going into the workforce, best pensions ever on the way out of the work force all while riding the wave of the most productive period of growth in human history, I’m very concerned for them.

http://www.youtube.com/watch?v=siF0iQOm6wg

*Just for the record, I’ve just introduced you knuckleheads to the Harlem Shake! You’re Welcome. You’re friends will think you’re sooooo cool.”

#77 Rick Perry on 02.12.13 at 6:14 am

Seems like I am the only one who thinks RRSP’s are government scam. TFSA is a no brainer, but I certainly will never contribute to an RRSP.

#78 FTP - First Time Poster on 02.12.13 at 8:03 am

Noticed on the BNN ticker last nite that 80% of Canadians are concerned they won’t save enough for retirement. Watch a single episode of “Til Debt Do us Part” and you’ll get a glimpse into how most people live.

Glad I’m not “keepin up with the Joneses”

#79 Anonymous on 02.12.13 at 8:15 am

Check this out people! Over at vancouver condo.info they have figured out that a prospective buyer in a media pump real estate story on CTV last night is employed as a condo marketer. She may have done other news stories. The media is deceiving us but the folks at vancouver condo.info are unravelling it.

http://vancouvercondo.info/2013/02/are-buyers-in-the-news-real-or-fake.html

#80 Regan on 02.12.13 at 8:29 am

#64 John Dominsas I’m with you – I want to invest to preserve my capital. I use my earnings and my business to create wealth and put my efforts to increasing these, not by gambling. I appreciate Garth’s beliefs that stocks can outperform, but historically I’ve not found that to be true. My actual YOY return is barely 5% so far in stocks, and with far more worry than my bonds, averaging 4.5%. My mortality is too short when compared to the volatility of this market, and thus, it’s not worth the risk to me since a bad gamble can’t be fixed until I’m too old to do it over. I’m slowly becoming convinced to dip my toe into income and dividend trusts, but that’s partly because I feel I have enough in secure investments. The arguments to gamble are hilarious – “always have stocks, you might miss out on a 40% gain in 2 months!” is never followed with “or a 30% loss in 3 days.” Yes, I’ve noticed it’s an irrational marketplace. It’s what makes me wary.
Proceed according to your own plan. By the time we know who was right in retrospect it will be a moot point.

Yours is the lament of the DIY investor. — Garth

#81 Ralph Cramdown on 02.12.13 at 8:42 am

#64 John Dominsas — Everyone who criticized me thinks that there will be an economic recovery like the 1990′s

I think there might be, but I’m not counting on it. I’ve got a portfolio of dividend payers and I’ll be happy if they gain zero and just keep paying the dividends over the next ten years. But they likely won’t, because the market keeps ‘discovering’ them one by one. In late December, I decided to look at the S&P 500 to see what stinkers fund managers would be purging from their portfolios so they wouldn’t have to admit to investors that they owned them as of December 31st. The only one I really liked was Pitney Bowes, known mainly for making postage machines, and EVERYBODY knows that that’s a declining industry. The stock had gone down all year, and I figured all the fund managers were throwing it overboard so they wouldn’t have to admit to owning such a turkey. I bought it for the dividend. Since then, it’s up 31%, so now the current yield is only 10.8% and the P/E is at an oh-so-pricey 6.4. Don’t get me wrong, I’ve got losers, too. Some have cut their dividend, and more will in the future.

Read those silly stock screener articles in the newspaper. If I may paraphrase: “First, we threw out all the stocks with a good yield, because we didn’t want to get paid. Then we threw out all the small companies, because we didn’t want anything that was going to grow.”

It’s a market of stocks. Most retail investors think it’s a casino, or the economy will suck, or they’re still licking their wounds from the dot-com bubble. The ones who do venture in want the big, safe ones like banks. There’s lots of companies making money and paying dividends.

Oops, MacLeans is out and the front cover is screaming ‘BUY!’

#82 Luc on 02.12.13 at 8:43 am

If my spouse and I die, and our 18 year old son inherits, does he inherit our RRSPs valued at $200,000 or does he have to collapse them and pay the taxes?

Also how about TFSA, we’ve topped them. Does he inherit the TFSAs, can he deposit them in his TFSA or does he simply take control of our TFSAs?

Great post Garth, very practical.

You can declare your son as beneficiary for a tax-free rollover of assets. — Garth

#83 leo on 02.12.13 at 8:50 am

#32 & #59 : Thought the same thing when reading it.

Garth : you now have some competition on the National Post with this Andrew Allentuck’s article…. But I believe we will agree he doesn’t know yet how to pick a good picture !

#84 AK on 02.12.13 at 8:58 am

#64 John Dominsas on 02.12.13 at 1:21 am

“The next 13 years you will see that 6% to 7% returns are not going to happen.”
——————————————————————
Nobody knows what will happen over the next 13 years, with the exception of dart throwers.

#85 Asse on 02.12.13 at 9:14 am

Grim Reaper/Crypt Speculator…just what kind of threat are you implying..financial?

#86 AK on 02.12.13 at 9:28 am

#73 Tony on 02.12.13 at 3:11 am

“If you can’t short stocks then run for the hills the stock market has never been more overvalued ever on record.”

——————————————————————

You obviuly were not around on October 19, 1987.

http://www.stockpickssystem.com/1987-stock-market-crash/

#87 a prairie dawg on 02.12.13 at 9:30 am

#43 JSS

I’m interested in becoming a Kia dealer. How do I become one?

– — –

Just plant a South Korean flag on your lawn, and wait for the trade delegation to arrive.

– — –

KIA’s, Costco, and the Big Swim. That’s what life is all about. lol

PS, I bought my BB Z10 with a debit card. ;)

#88 Jman on 02.12.13 at 9:38 am

“Plus, since all cash taken from an RRSP is taxed as income, you lose the advantage of earning dividends…”
but the extra money you pay the government now won’t be compounding in your favour over the course of the 30 or 40 years you hold the rrsp?

Put it in the TFSA. — Garth

#89 Nuke on 02.12.13 at 9:38 am

did the spousal RRSP. spouse wanted to start a business so drew on $40,000 of spousal rrsp over a couple of years while she transitioned. RRSP went in at the my top tax rate and came out basically tax free. Plus her business now nets her that amount each year.

Inome splitting of RRSPs and pensions in retirement is also very effective. If you retire on $80k a year, you save a lot of tax if you can split it to almost $40k each.

RRSP and RRIFs can also be rolled on death to a financially dependent child with a disability. Upto $200k can roll into their RDSP if they are elibible. There are good RRSP/RRIF tax planning opportunities out there.

#90 Steve on 02.12.13 at 9:47 am

Garth, I have tried to quantify your concern that the RRSP tax deferral now may be clawed back by the time one takes their income from the RRSP.

In Ontario (since we need to blend in provincial numbers) a person with taxable income of 100k pays 37.2% on the amount above about $85k, so let’s use the 37.2% as the deferral rate. The actual blended income tax rate for $100k is 27.6%. (You pay $27,600 income tax on $100k taxable income)

Although different for every person, let’s further assume that an individual at $100k previously can be comfortable with $50k in retirement. At present rates, the blended income tax for $50k taxable income is 22.0%.

For the AR among us, there are other factors too (e.g. $150 less health tax, a muriad of possible tax reduction strategies) but the above is enough to make the following a fair comparison:

It looks like, at $100k taxable income, one can defer tax now at 37.2%, and pay tax later at 22.0%. If one is 25 years old I suppose the future view is riskier than if one is 55 years old, but that 15+% difference is a lot for the government to completely tax back.

Do these numbers make sense, or did I completely miss something?

#91 Beach Girl on 02.12.13 at 9:56 am

I did it, feel great. Doesn’t even hurt, (and I am a whiner), and it is not like we don’t know people who we can up in a pinch. Will look Fab. Am going Bathing Suit shopping with a passion, soon. Oh, come on. Be happy for me, you financial Genuises. I promise to be nice. Hard to read right now. Ya, having some nectar of the Gods. A friendly word, I won’t upset anyone with my caustic sense of humour. Turned over a new leaf. My girlie friends have bought all new linens and 15 large size pillows. Came home to all new shit. Men do not think like that. So Happy.

Oh, I am never going to mean again, promise.

#92 gaspr on 02.12.13 at 10:10 am

@ Luc #83
Garth says,

You can declare your son as beneficiary for a tax-free rollover of assets. — Garth

True for TFSAs. Only true for RRSPs if your son is “financially dependent” as defined by CRA.

http://www.taxtips.ca/rrsp/taxonrrsprrifatdeath.htm

#93 Axxman on 02.12.13 at 10:16 am

In the papers this morning: “The growth of household credit has shown signs of moderating in recent months,” Bank of Canada Deputy Governor Timothy Lane….This is about as comforting as the Captain of the Titanic announcing “Ladies and Gentlemen – I have some good news – we are monitoring the situation closely and it appears that the ship is showing signs of sinking at a slower rate”.

Any chance we can send them all to England?

#94 Captain Critical on 02.12.13 at 10:25 am

1 Dr. Hoof Hearted on 02.11.13 at 9:05 pm
Fiirssszzzttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttt !!
.
————————————-
I’m with Dr. Wayne, you are a real A$$HOLE! Grow up fella.

#95 MGTOW on 02.12.13 at 10:26 am

#37, Dave
1) I would find it easier to read your articles if you widened the margins just a little bit to allow for another 20-30 characters per line. Easier on the eyes

Use the zoom feature of your browser. Makes the text bigger but leaves the babes untouched.

#96 Dupcheck on 02.12.13 at 10:33 am

Someone has to be first to post, they just have to be extra happy about it. Maybe Garth gives a price for first place that we don’t know, do you Garth?

#97 rosie "moving forward" on 02.12.13 at 10:43 am

Some folks are just permanently stupid. Know one moving forward here. http://www.dailymail.co.uk/news/article-2276949/Hilarious-photos-misspelled-tattoos-reveal-dictionary-body-art.html#axzz2KUaMNvy4

#98 Beach Girl on 02.12.13 at 10:43 am

Am I gone forever? On some Prescription drugs and promise to be nice, like forever. Some compassion for Beach Girl. Unfortunately, you are part of my life. See I can be nice. The Facial Surgery went well. I was hoping for at least a hi. I am so nice to everyone else. Listening to TV as I cannot see and a friend is typing this for me.

#99 AK on 02.12.13 at 11:08 am

#97 Dupcheck on 02.12.13 at 10:33 am

“Someone has to be first to post, they just have to be extra happy about it.”

—————————————————————-

Granted, but there is no reason for them to behave like idiotic morons.

#100 DM in C on 02.12.13 at 11:20 am

Viewpoint:

400-800K condos in Dartmouth. DARTMOUTH? Nice smell from the harbour when you are out on the balcony, and drive bys and gun violence just up the street at the bus depot.

No wonder so many are panicking. Who’s bright idea was that?

#101 Herb on 02.12.13 at 11:29 am

#92 Beach Girl,

I was wondering what you had done did until I got down to your #99. Glad you’re happy – and that your plastic surgeon did not seek revenge for Dubai.

Don’t recall you being particularly mean to anyone who didn’t deserve it, so there is no point leaving yourself speechless. Just don’t try to outdo Smoking Man: there’s only one of those – thank dog!

#102 squidly77 on 02.12.13 at 11:31 am

That vancouvercondo.info post is just to funny.
Never, and I mean never would I have guessed that the property pimps would resort to that of deceit. :)

Looked at FB (face-book) down 20% from $32+ and going lower. Whocoodhavnownnnn!!

#103 squidly77 on 02.12.13 at 11:38 am

SIRI is still ripping faces off and kicking commoners in the nuts along the way.

SU, CNQ not so much. The Alberta tar pits are in a mess.

#104 Devore on 02.12.13 at 11:39 am

#15 Chaddywack

What about buying a house, taking out $25,000, and not paying it back Garth? You’re effectively splitting that $25k over 15 years which is a tiny tax hit.

It’s taxed at your marginal tax rate, how is that a “tiny hit”? Do you plan to be unemployed for the next 15 years?

#105 Yield Fanatic on 02.12.13 at 11:39 am

I was wondering if you could comment about buying US stocks with a TFSA account? How do withholding taxes work? Would it be advantageous to buy high dividend paying equities?

#106 Ret on 02.12.13 at 11:40 am

#28 RRSP tax bombs.

Right on. Most seniors hang onto their RRSP’s as long as possible because [email protected] threatens them with taxes and bank charges on any withdrawals.

They don’t cash out a dime even when their incomes are well under the first tax tier at around $40,000. They could have each easily cashed out $5/10/20,000 a year along the way at low tax rates but they were too busy stalking the local grocery store for mushroom soup specials.

Then the final survivor’s estate ends up submitting a final tax tab on $100,000 or more of RRSP and other income especially if they die later in the tax year and have a whole year of CPP, OAS, and some interest or other sources of income. Of course all tax clawbacks and surcharges kick in as well.

I would like to thank them all and their heirs for helping to reduce Canada’s tax burden, and in some small way, mine too!

#107 Gunboat denier on 02.12.13 at 11:41 am

19 John

“The annual interest is $327.16 income tax free.It looks
good to me.”

You do realize that a strip bond does not have a coupon dont you? You cannot access this “annual interest”. It only has a known value at maturity, and a market value dictated by the credit worthiness of the issuer and prevailing interest rates should you decide to sell before the maturity date. An how do you define “compound”
rate?

#108 Tony on 02.12.13 at 11:45 am

Re: #87 AK on 02.12.13 at 9:28 am

I was mostly out of stocks at the end of 1983. The stock market because overvalued and corrected around the start of 1984. As interest rates fell i mostly day traded since then believing unless interest rates are in a long downward trend they’d be other better investments. I did buy Gillette the day after the crash of ’87 or blue Monday.

#109 Dr. Hoof Hearted on 02.12.13 at 11:56 am

#95 Captain Critical on 02.12.13 at 10:25 am

===========================

Now I know Dr Wayne is a Vet !

#110 Devore on 02.12.13 at 11:59 am

#32 lawboy

http://business.financialpost.com/2013/02/11/high-income-couple-has-to-deal-with-some-real-estate-headaches/

Jesus wept.

Amazing. Of course, in their circles, these people would be considered investment geniuses, and wealthy. They probably thought so of themselves too, until cracks started to show. All high income means, really, is you just burn through more money. 8 grand a year on clothing and “grooming”? That better come with a happy ending.

#111 D on 02.12.13 at 12:00 pm

i thought changes to income splitting at retirement rendered the spousal rrsp ineffective.

#112 Purple on 02.12.13 at 12:05 pm

Thank you Garth! I so appreciate your advise. I don’t have much money but I’ll do what I can with it so I don’t end up in a soup kitchen in my old age.

#113 Beach Boy on 02.12.13 at 12:09 pm

I don’t see the problem maxing out your RRSP. Just plan on retiring earlier and take out your RRSP for 10 years during no income years to reduce the tax burden (ex: @ age 55 before you claim CPP or OAS).

#114 squidly77 on 02.12.13 at 12:11 pm

So glad you rid us of the riff raff (smoking man, beach girl, old man, DA or AKA DA, just glad that they are gone-real-tots anyways)

A gem from an Edm realtor run blog..

The truth is there is both good news and bad news as we move forward. Sure we have oil, but the cost of extracting it is getting more expensive as inflation rises. There are jobs, jobs, jobs everywhere. Not all of them are great, and many don’t pay well enough to handle increasing costs in a hot economy. Infrastructure is strained and services are stretched. All the while the economy in Alberta chugs along and according to the dooms dayers the heart of Alberta’s economy – oil – will just stop beating.

Until that happens I hate to break it to the negazots (my nickname for the robotic naturally pessimistic people) but there is no bubble here. Let me repeat there is no bubble here. Prices may swing but this market will not collapse. I do expect price corrections in a broad range of products and areas in the near future. I do expect some speculators will get burnt, and that is their risk, and if they are insane enough to put all their eggs in one basket they may just deserve to loose it all.

There are few of us who really truly follow this market (20 years now I’ve been involved in real estate), and there are many recent spectators who by fear or shear excitement now have an opinion on all things real estate. The best is when I see or hear people say “I have a friend who…” and then recklessly and without full knowledge of the facts, give their spin to someone else’s incredible success or dire circumstances. These people are dangerous as they don’t dispense expertise but their own agendas. http://edmontonrealestateblog.com/2007/05/fear_mongering_.html

Too bad for Edmonton buyers that are deeply underwater as prices in E-town are down 25-30%.

HA HA!! Aint no bubble here folks!

#115 LP on 02.12.13 at 12:13 pm

#99Beach Girl on 02.12.13 at 10:43 am

Hi BG

A big shout-out to you for trying to be the best you can be. New season coming, new you in lots of ways – things are looking up!

#116 squidly77 on 02.12.13 at 12:19 pm

Until that happens I hate to break it to the negazots (my nickname for the robotic naturally pessimistic people) but there is no bubble here. Let me repeat there is no bubble here. Prices may swing but this market will not collapse.

Wrong sir, the Edmonton market has collapsed. Prices are down in a massive way. An average priced 3 bdrm bung now costs easily $100,000 less than it did in 2007 regardless of what EREB says. EREB is irrelevant, as is CREB in Calgary.

The stats that CREB and EREB provide make it necessary for me to hold my nose, and this image comes to mind. Every time. http://pandodaily.files.wordpress.com/2012/01/pinocchio.jpg

#117 -=jwk=- on 02.12.13 at 12:20 pm

venezulea currency issues. it’s worse than posted here! Yikes!

http://www.economist.com/blogs/americasview/2013/02/venezuela%E2%80%99s-currency

#118 Tyrone Asauras on 02.12.13 at 12:29 pm

#33White Rock Mom on 02.11.13 at 10:49 pm
As per my accountant my husband cannot contribute to the Spousal RRSP for two years. If I withdraw within those two years the income is attributed to my husband. Two years after his last contribution I can withdraw and the income is attributed to me.

I had always thought money in a spousal RRSP becomes the spouse’s to withdraw as income at “her” marginal tax rate 3 years after it is deposited.

I’m pretty sure you can pile money on during the three years you are waiting, it’s just if you withdraw an amount higher than the three year old plus deposits, it’s taxed at the contributor’s rate.

Our fearless leader, Garth, can correct me if I’m wrong, but I think your accountant has failed to understand this situation correctly. If you’re depending on them for tax advice, well, you may want a second opinion!

#119 afraidit allmightend on 02.12.13 at 12:40 pm

Media whores and real estate developers are a marriage made in postal code 666.

http://www.vancouversun.com/news/surrey/Shelley+Fralic+Could+Surrey+become+Vancouver+version+Brooklyn/7949995/story.html

When you have supposedly trained journalists taken away from journalism and set to writing crap like this you have to wonder what other parts of your newsday that isn’t just sleazy – bought and paid for propaganda meant to keep you stupid and uninformed.

#120 amazona girl on 02.12.13 at 12:41 pm

garth have a question can you take money out from your RRSP to contribue to your TFSA OR OPEN OTHER ONE Love you Garth thanks for all your work

The RSP withdrawal is taxable. Not much point. — Garth

#121 Blair on 02.12.13 at 1:15 pm

So, my wife and I are planning on having a child in two years.

To finance the break in income (aside from EI), we could put (realistically we could save 10k) 10,000 saved over 2 years, then withdraw while on mat leave, and only be taxed at the current rate, which will be super low.

Will we have to pay the amount back in X years, like the home buyer plan?

This is awesome

Garth, if only you were a chick…

#122 Devore on 02.12.13 at 1:20 pm

#89 Jman

but the extra money you pay the government now won’t be compounding in your favour over the course of the 30 or 40 years you hold the rrsp?

Multiplication is commutative; doesn’t matter what order the numbers go in.

(money * compounding) * tax = (money * tax) * compounding

#123 Canuck Abroad on 02.12.13 at 1:21 pm

Why isn’t this illegal? Is this not fraud by CTV?

CTV runs a “news” story featuring a Vancouver building (Maddox) which is being marketed by MAC Marketing and says in their “news” piece that Chinese New Year will save Vancouver real estate (or something). Turns out the “buyer” is a marketing exec for MAC Marketing and the unit she’s thinking of getting her parents to buy for her and her sister is in the Maddox building!

Shouldn’t this be clearly labelled as advertising and not “news”.

http://whispersfromtheedgeoftherainforest.blogspot.ca/2013/02/media-manipulation-you-decide.html

#124 panhead on 02.12.13 at 1:36 pm

#76 Buy? Curious? on 02.12.13 at 5:41 am

*Just for the record, I’ve just introduced you knuckleheads to the Harlem Shake! You’re Welcome. You’re friends will think you’re sooooo cool.”

————————————————————-
C’mon now … let’s not be badmouthin knuckleheads … Garth must like em’

#125 wallflower on 02.12.13 at 1:40 pm

Re Dave…
I would find it easier to read your articles if you widened the margins just a little bit to allow for another 20-30 characters per line. Easier on the eyes

Garth – don’t change anything – column width is refreshingly perfect

Dave – seriously – use your own settings to change/improve your view!!!!!

#126 Holy Crap Wheres the Tylenol on 02.12.13 at 1:45 pm

Years ago I was pounding away RRSP’s like crazy. At the time it did help me move one bracket lower and saved a ton of tax. After watching my parents retire and understanding how their RRSPs worked with their pensions I started to back off. Now they all have RIFFs and they are starting to pour out the cash as it is mandatory. Paying taxes, paying taxes, paying taxes. I have not put one cent into a RRSP in the last ten years now, and I totally agree the TFSA is the way to go. I have set up my children each with TFSA and small RRSP accounts and told them the old rule. You gotta know when to hold them, and when to show them! (Thanks Overdone Facelift Kenny Rogers for the lyrics) When they need a deduction due to excessive income use the RRSP to the max. Other than that I would use a TFSA as they can seed it up to the limit when they have the extra cash.

#127 :):( Ying Yang on 02.12.13 at 1:55 pm

Where are the astute and righteous expressions of despondency from the Smoking Man of late? It would appear perhaps an Alien abduction? Perhaps he is on his way to Tralfamadore, say hello to Kurt for us!

#128 Canadian Watchdog on 02.12.13 at 1:59 pm

Toronto condos no Shangri-La for unhappy B.C. buyers

Developers, marketers and condominium buyers in B.C. are starting to feel ripples from the sinking Toronto condominium market.

Several B.C.-based buyers of units in Toronto’s prestigious 66-storey Living Shangri-La Toronto condominium tower have filed lawsuits in the Supreme Court of British Columbia to try to get out of their pre-sale contract commitments.

They argue that the pre-sale contracts they signed are unenforceable because the tower’s Vancouver-based developers and marketers failed to follow B.C. law when they sold the units, which are likely worth less today than when the contracts were signed.

——

This is what happens when you sell condos in a quasi-futures market originated from Hong Kong twenty years ago, but even worse, it's a one way long position that buyers can't get out of. Developers have maintained high prices by selling with incentives as a way to not  undercut pre-buyers, only now, with resales being discounted (one can now buy the same quality condo, and larger, at a lower price then new); the forward market becomes highly illiquid, leaving both pre-buyers on the hook and developers cash-strapped.

For non-traders, what is developing will eventually lead to backwardation, where the futures price (higher price selling prices on new condos) is offered at a lower price then the spot price (resale).

And for anyone who thought presales only existed in the condo market, here's a speculator offering a semi from one of Canada's largest home developers, Greenpark.

#129 Triplenet on 02.12.13 at 2:22 pm

#53 Scott

BC Assessment provides the LTO date stamp. This may or may not be the contract date, which is usually very important to determine.
The are numerous reasons for date discrepancies – you should know them if you are analysing real estate.
Further, BC. Assessment may also comment on the market value validity of a reported sale.

#130 Grim Reaper/Crypt Speculator on 02.12.13 at 2:31 pm

SOTP:

= the opposite of Ggo

= Seat Of The Pants

= Stay Outa The Penitentiary

= Stay Outa Trailer Park

(= Surrey’s new mottos)

#131 Marc in Montréal on 02.12.13 at 2:35 pm

@#50 Eastward

I am not aware of any blog dedicated to the MTL RE landscape. Save for one that neatly details the buying process.

In general, as you are probably aware, major news outlets in the province devote little space to RE fluctuations and analysis (before anything major happens anyway).

In my estimation one of the major issue related to condo ownership in the province is the “eternally” soon-to-be law fixing the % of condo fees allocated to the emergency fund, which by law must be of at least 5%. A ridiculously low % that entices buyers yet that creates nightmares on personnal finances when the fund can’t cover major (expected) repairs (roof, etc.) and one has to shell 10 000$.

http://blogues.lapresse.ca/lapresseaffaires/immobilier/2012/05/11/loi-sur-la-copropriete-le-grand-menage-sen-vient/

#132 unbalanced on 02.12.13 at 2:49 pm

To Beach Girl. Hope you recover soon. I like ya just the way you are. Just remember when the going gets tuff, the tuff get going!!! Take care

#133 Anonymous on 02.12.13 at 2:58 pm

#126 Canuck Abroad

I agree with you that this reeks to high heaven. Until there is change (which will be never), I just view the mainstream news as advertising/propaganda. You watch the TV news to take in the latest propaganda and you go to the internet blogs to find out what is really going on.

I think that story about condo marketers posing as prospective buyers in the media is tremendously important.

This speaks to so many issues right now–deception in the real estate market, the degradation of journalistic standards, the operatives of how real estate prices in Vancouver became so inflated, the issue of HAM and how true it is that HAM have inflated our prices or whether that was just a marketing gimmick.

The perception (rightly or wrongly) that housing is unaffordable to local people due to HAM investors is causing a great deal of racial animosity in our society. It is undermining Trudeau’s vision of a multicultural society where different races live in harmony. So if it is true that condo marketers and the local media have been deliberately deceiving the public into thinking that HAM are the cause of high prices, then they are guilt of something far worse than just pumping up real estate. If they really did this, they would be guilty of creating social tensions and racism and undermining multiculturalism.

And I say all of this with the words “IF THIS IS TRUE” underlined. So far everything is being alleged. I am not claiming there is definitive proof of any wrong doing. I wouldn’t want to be accused of slander.

http://whispersfromtheedgeoftherainforest.blogspot.ca/2013/02/media-manipulation-you-decide.html

#134 Buy? Curious? on 02.12.13 at 3:04 pm

Hey Blag Hags, this was just uploaded. It’s the CBC’s documentary on Generation Jobless. I can’t wait to see Canadians doing the “sheep in an abattoir” as student loans and overskilled minimum wage jobs are the only ones left.

http://www.youtube.com/watch?v=siF0iQOm6wg

And this is my retirement plan.

http://www.youtube.com/watch?v=w429hd6lNJE

You’re welcome.

#135 Blobby on 02.12.13 at 3:36 pm

Garth – Never occured to me i could take education funding out of rrsp tax free.

I paid for a course last year in september, length of course was 6 months (finishes next month).

When i started i paid for it out of my bank account normally.. But now i’m broke. Can I take the money out of rsp for educational costs (i.e. the cost of the course) this late on? (I’m already going to take the cost of the course off my tax, etc).

I could call my investment guy i guess – but i figured i’d ask here first (saves embarrassment… lol)

#136 armpit on 02.12.13 at 4:35 pm

Garth – “So what good are RRSPs? …….use the RRSP for tax-shifting, rather than tax deferral. That means banking income in good years to take during years when you live on less. That could be thanks to a sabbatical, a pregnancy or joyous unemployment.”

—————————————————————

Garth, “joyous unemployment” could also equal retirement without a company pension plan.

#137 IM in C on 02.12.13 at 4:49 pm

http://www.cbc.ca/news/canada/british-columbia/story/2013/02/08/bc-renttoown.html

Saw this article , interesting how the concept of ownership can get blurred! The person paying rent is technically not a tenant, so cannot be evicted for non payment of ‘rent’. The person who brokered the ‘sale’ is technically not a broker!

#138 Beach Girl on 02.12.13 at 4:56 pm

Really HAPPY, thankful that I have friends in cyberblog, or whatever. I know I will look great. Got creative on Sunday, and just for good luck went to a Missionary Church and gave them a $100. Was feeling a bit scared. Still here and more than awesome. Just awesomely enthralled, that is allowed no? Didn’t even need those meds. Well maybe a bit. LOL. I love everyone here, even Westernman. Did someone get dumped permanently. HAHA. Kinda stoned, on doctors orders. WOW, this is fun. Please don’t delete me Garth, i will be back tomorrow, but, I promise to never, ever be un nice again.

#139 Tom from Mississuga on 02.12.13 at 4:57 pm

With the lastest housing start, building permits and new home sales the media is really piling on RE.

#140 Good authority on 02.12.13 at 5:00 pm

121 Afraidit Mightallend

“Media whores and real estate developers are a marriage made in postal code 666.”
666>>Very witty – well written article on link though have no clue of accuracy apart from your opinion.
————————————————
Here in the land of its FIRST woman premier, it continues to snow.
Why is snow important??
It slows RE sales.

We shall soon read:

“Sales are slower than normal in Ontario as unexpectantly colder weather slowed February RE action. RE is expected to rebound hard in March as buyers line up to snap up RE an excess of inventory on the market”

#141 Old Man on 02.12.13 at 5:32 pm

#141 Beach Girl – I too wish you the best for a good recovery on facial surgery, as have done such myself, and always remember to put a pillow between your legs at night, as when you are sleeping it prevents you from rolling over against the face. I wish you the best of luck, and all will be fine.

#142 LS in Arbutus on 02.12.13 at 5:50 pm

#51 Cici

I think your boyfriend is correct. If you company is matching you dollar for dollar, then it’s a 100% return on the money you put in. At 5% return (compounded) per year it would take you over 15 years to double your money. At 10% return (compounded) per year it would take you over 13 years to double your money.

So…..even if it doesn’t give you great returns on the investment itself, the fact that they match makes it worth it.

Some plans, with some restrictions, will allow you to withdraw and invest elsewhere. I know my plan allows this, but then you can’t make contributions for a year or so. Assuming this, you could contribute for 5 -10 years and then clear it out, lose your matching for a year, and then start contributing again.

#143 AprilNewwest on 02.12.13 at 5:51 pm

#134 Marc- Can you send this info in English?

#144 Dr. Hoof-Hearted on 02.12.13 at 5:53 pm

#136 Anonymous on 02.12.13 at 2:58 pm

re : Multiculturalism

Having seen society evolve, and with vivid recollections of Trudeau’s siren call for Multiculturalism……

Here In Hamville….the old annual class pictures have evolved in 40 + years from from 95 % Caucasian to 5% Caucasian.

To a politician its simply ethnic voting blocks, and I have seen this in action.

Multicultural is exactly that multi – culture/s….divide and conquer. The funny thing is, the Caucasian politicians are still in power by and large…., but have ethnic lieutenants who are power brokers.

If you have approx 30% overall voter turnout,….but can get a large ethnic block to turn up at the polls…let’s say 1000….you can dramatically shift an election.

I’ve even talked to some” lieutenants” and really questioned their ethics on this, it will come back to bite them eventually.

#145 ApplePi on 02.12.13 at 6:09 pm

@ #37 Dave. Seriously? Widen the margins?

First of all, the margins are the wide space around the content, I think you meant “widen your columns”

Second of all, the optimal number of words / line for readability is about 12-15 words (http://www.maxdesign.com.au/articles/em/).

The column width is fine.

#146 Ken R on 02.12.13 at 6:32 pm

#126 Canuck Abroad on 02.12.13 at 1:21 pm

Unbiased news? Illegal activity? Canned speeches from “experts” on the payroll? Welcome to Canada; if BS were dollars, we could pay off the national debt with cash to spare.

#147 jess on 02.12.13 at 7:05 pm

OTS raised significant supervisory concerns regarding Superior’s securitizations and exposure to residuals in the report of examination.

Testimony on the Failure of Superior Bank, Federal Savings Bank before theCommittee on Banking, Housing, and Urban Affairs United States Senate Ellen Seidman Director, Office of Thrift Supervision

http://www.occ.gov/static/news-issuances/ots/testimony/ots-testimony-ts089-09-19-2001.pdf

pacific thrift

PTL’s management established extremely optimistic assumptions for the projection and recording of anticipated future income associated with their IORRs. As a result, capital increased dramatically during 1997 from recording the increasing gains achieved on the
sale of the securitized loans. However, the growth in the IORRs, coupled with the lack of sustained cash flow from the IORRs, placed undue stress on PTL’s capital base. The FDIC examiners were alert to the risks during their first exposure to PTL’s IORRs during their March 1997 examination. These complex derivative instruments were new to the examiners, a situation that eventually prompted assistance from FDIC Capital
Markets Specialists in Washington. The initial problem faced by the regulators was trying to establish a fair market value for the IORRs. Because the retained interests were new in the financial markets, there was limited public information available. FAS 125
indicates that the best evidence of fair value is a quoted market price in an active market.
In instances where a quoted market price is unavailable, the accounting rules allow for a
fair value to be estimated.

http://www.fdicoig.gov/reports00/00-022.pdf

#148 Devore on 02.12.13 at 7:13 pm

#140 IM in C

The rent-to-own scheme carries tons of risk for both the buyer and the seller/financier. I don’t think any such buyer enters into it without the intention to somehow defraud or pull a fast one, and no seller does unless they are very desperate, or believe they will be the one to screw the buyer over, instead of the other way around.

#149 Dr. Hoof-Hearted on 02.12.13 at 7:50 pm

Van hailin’ freedom lovers
No rent, no mortgage when living in your vehicle

Gordon McIntyre, The Province
Published: Tuesday, February 12, 2013

http://www2.canada.com/theprovince/news/story.html?id=a3e3201c-de03-481a-a65f-124314361a6f&p=1

QUOTE:

They’re a merry band of vagabonds, living in their vehicles not so much because they can’t afford rent or a mortgage – though that’s part of it – but to cast off the chains of mainstream consumer living.

They’re van-dwellers and RV Gypsies, free as birds and believing that your possessions in the end wind up possessing you.

“I had all of this stuff,” said 30-year-old Shawn Linley, sitting in his Econoline RV in North Vancouver. “Stuff, stuff, stuff, so much stuff.

Mathew Arthur chooses to live in a converted van that he parks on the east side of Vancouver.

“I don’t want a gas-powered weed-eater any more. I don’t want a huge flat-screen TV. I don’t need ’em.

“I’m never going to live in an apartment again or buy another house.”

Linley, like many vehicle-dwellers in B.C., is a journeyman tradesman. There are no official numbers of how many people live in their vehicles in Metro Vancouver, but it’s probably more than people think.

There are little mobile squatters’ camps all over the Lower Mainland – beside treed North Shore creeks, in industrial zones, beside East Van and Burnaby parks and SkyTrain stations, and along the beaches of Kitsilano and Point Grey.

It’s a sub-culture that is by definition discreet and shadowy, moving every so often to avoid drawing attention.

“Basically, they’re untraceable, people who are good at flying under the radar,” said Judy Graves, advocate for the homeless with the City of Vancouver.

For the most part they have jobs, she said, at least seasonally.

QUOTE:

The most commonly asked questions are about toilets and showers – it helps to belong to a gym.

“The hardest part of a workout is actually getting there,” Linley said. “I have to go because I have to shower.”

The next most-asked question regards sex. Put it this way, if the van be a rockin’ ..

etc. etc.

#150 IM in C on 02.12.13 at 7:55 pm

@151 Devore
Interesting take on ‘rent to own’. I wonder if Garth has any thoughts? I suspect you will start to see more of these schemes as the housing market gently dips.

#151 Old Man on 02.12.13 at 7:58 pm

#151 Devore – the rent to own is an option in a rising market, but not now as the property value is in for a discount. Now any agreement of such between a renter and the vendor; the renter has a vested interest with a contract, and needs to be registered as such against the property title for protection.

#152 Ralph Cramdown on 02.12.13 at 8:13 pm

#146 AprilNewwest — Can you send this info in English?

My browser asks me if I want the page translated when it detects that it isn’t in English. If yours doesn’t, there’s always http://translate.google.com/ Just paste in the URL

#153 Ralph Cramdown on 02.12.13 at 8:21 pm

#151 Devore — The rent-to-own scheme carries tons of risk for both the buyer and the seller/financier. I don’t think any such buyer enters into it without the intention to somehow defraud or pull a fast one, and no seller does unless they are very desperate

I think it’s usually the other way around. Lots of books have been written for the amateur real estate investor. Find a renter with bad credit or whatever, set a high “to own” price with a small upfront deposit and higher than market rent, and either sell at a decent return once the DP is saved or keep the deposit when the renter defaults.

The laws covering these schenanigans are state-by-state and province-by-province, whereas the books sold at expensive seminars are usually not locally tailored, so maybe it’s the prospective investor who usually gets fleeced even before owning anything. In this case it looks like the fraudster was a bit on the ball as he managed to collect good coin with no money and no risk on either end. Expect to see more of it in Canada if/when real estate goes South. Just look to the USA; we’re replaying their tape from 5 years ago in real time.

#154 Westernman on 02.12.13 at 8:29 pm

Beach Girl,
Please go back to your vicious,vile,foul-mouthed wolverine-like self – this phony, disingenuous, inauthentic I’m all nice and cuddly crap is even worse…

#155 John Dominsas on 02.12.13 at 8:35 pm

The stock market and real estate markets are more manipulated than interest rate markets(credit and debt markets of all kinds). There is a reason it’s called dividends, shares. They divide and share only they want to or times are good. The TSX before it was TSE is an index of top 300 companies in Canada, so why has it not changed by much in almost 13 years. It was 11,700 now it’s 12,789. Inflation over the last 13 years is about 34% total using Canadian C.P.I. index. This is not including annual, trading and any other fees. Real estate has at least a 5% to 10% closing costs when sold and bought. Renting property has many legal,tax, and maintenance problems. The 3.813% return is net of all fees so even a 1.25% annual fee would mean you would need a 5.063% return to break even. Think about it!

#156 DR. WAYNE on 02.12.13 at 8:43 pm

#83 Luc on 02.12.13 at 8:43 am

If my spouse and I die, and our 18 year old son inherits, does he inherit our RRSPs valued at $200,000 or does he have to collapse them and pay the taxes?

Also how about TFSA, we’ve topped them. Does he inherit the TFSAs, can he deposit them in his TFSA or does he simply take control of our TFSAs?

Great post Garth, very practical.

You can declare your son as beneficiary for a tax-free rollover of assets. — Garth

=========================

As I understand it, a child beneficiary can receive the the RRSP $$ as an inheritance, BUT, when the $$ is taken out, he/she/they will have to pay appropriate taxes. I don’t think a beneficiary gets off scott free regarding taxes on withdrawals from their inherited RRSP account … ???

Of course not. The roll-over is into a tax shelter and withdrawals are taxable in the beneficiary’s hands. — Garth

#157 robert on 02.12.13 at 9:08 pm

There is a new horizon on the Real Estate Market and it is just now coming into view for all to see. In the past the assessed value had little to do with the sales value as it was quite accepted that one would expect to pay a 30k to 80k premium over the assessed value. This new horizon is moving to create a new norm of buying a property for below assessed value. Buyers are looking at Real Estate differently today. Buyers are finally realizing that a 15 to 20 year old home on average will cost them approximately 25k in the first two to three years of ownership. Replacing roofs, hot water tanks, appliances, furnaces, ac units, windows, doors, flooring etc are a real predictable cost of ownership. Why do you think the seller is selling they know the home better than anyone. So would it not make sense that a buyer should be able to buy this home for assessed value less any real expected costs? Here is where the changing horizon is becoming visable. Even if you are able to buy a home using this formula there is another door you must get through and that is your local appraiser. He looks at the size of the home, the size of the lot, the condition and comparable sales to formulate an actual today value. From what i am told the Banks are watching deals collapse daily when the buyers see the appraisals come in lower than their sale price. For example house sells for $345,000 with an assessed value of $360,000. The buyer figures he will need to spend 20k to update the home and all is going well until the appraiser decides the today value is $330,000. Now the deal does not look so good and the bank wants another $12000 down so they are not advancing more than 80% of value of the home. Soft landing? Time is the teller of all truths and when sellers come to understand that the spring market will not bail them out and the Real Estate Market is illiquid the prices will begin to adjust very quickly.

#158 AK on 02.12.13 at 9:24 pm

#110 Dr. Hoof Hearted on 02.12.13 at 11:56 am

How many different ID’s do you post under?

#159 Beach Girl on 02.12.13 at 9:32 pm

Something is wrong here.

I wrote a sermon and it is gone.

What I said was, and I guess it is name dropping, in the early 80’s our friend T. Marr was a genius for Frank as in Stronach. He arranged for Mr. Hadfield to fly over our place on Sandy Lake (private) no way in or out. Its water is turquoise. We don’t go there anymore. We mooned him, he didn’t see us, he was going to fast. I think he circled, flying from Trenton. My old man was there. He was a pilot in WW2. We were all drunk. See, I can be nice.

And I thank all 4 of you who care. A miserable turnout. but those who mentioned it is remembered.

#160 Marc in Montréal on 02.12.13 at 9:33 pm

#146 AprilNewwest

No equivalent in English on the net.

In a nutshell :

– Quebec condo law set to be revamped in 2012 (has not happened btw).
-Public hearings held.
-What came out : insufficient funds in condo emergency accounts, new building warranty plans blurry and not as thorough as they should, too little long-term maintenance planning, home inspections too lax, etc., etc.

#161 Beach Girl on 02.12.13 at 9:38 pm

DELETED

#162 Beach Girl on 02.12.13 at 10:01 pm

I keep getting dumped, am I gone Garth? Not even deleted, dumped, could be the meds. Not sure. This would be a good time to play with my head.

#163 Smoking Man on 02.12.13 at 10:16 pm

DELETED

#164 AprilNewwest on 02.12.13 at 10:23 pm

#163 Marc. Thanks for replying.

#165 InvestX on 02.12.13 at 10:26 pm

#57 NAGA:

“I m predicting that this period of low interest rates will last well into the end of this decade and possibly spill over into the next…”

What do you think this, Japan? It’s different here.

#166 Red_green17 on 02.12.13 at 10:52 pm

Another great and helpful blog Garth. I’ve been using my TFSA solely for investing over the last couple of years. Since I ran out of education tax credits 3 years ago, I have been putting minimal contributions to my RRSP for the sole purpose of getting a tax write off. I plan to use the small amount funds I have in that account to help with my 25% down payment on a house later this year once prices drop in Ottawa. Couple that with how I am still under 30 and have a good government pension, I like to think I am set! Now I have to build up my investing money to finally buy my first business (which is what I went into school to do).

#167 gaspr on 02.13.13 at 12:03 am

Garth
I don’t know why I am questioning the former Minister Responsible for the CRA, but here goes. You seem to be saying that it is possible to roll over an RRSP to a named benificiery (other than a spouse or common law partner) without triggering taxes. As I read the law, the only way this is possible is if the named benificiery is a child or grandchild, under the age of 18, and is financially dependent as defined by CRA.

Not what I said. — Garth

#168 Brian Ripley on 02.13.13 at 2:33 pm

To lilyflor Post #72 above.

I have updated the Plunge-O-Meter and Percentage Change Scorecard with the Montreal January data (they usually release their data in the 2nd week of the month). “More price erosion and inventory buildup”
http://www.chpc.biz/plunge-o-meter.html
http://www.chpc.biz/scorecard.html

#169 Andrew on 02.13.13 at 9:32 pm

Squidly, I know you’ve been a thorn in the side of albeerta’s realtors for awhile now, I’m wondering how Bob Truman’s lawsuit is going?

Last time he mentioned it he was gloating about some kind of BIG news and then he has hasn’t mentioned anything since.