Enjoying Your Home in the Summer

After a brief absence, I am back and ready to flood your inbox with new blog posts every other Thursday, beginning today.

Even though we are currently in the middle of July, it feels as though summer hasn’t even begun in Calgary what with all the rain we’ve been having and all. The search for my new ’summer duvet’ has proven to be not necessary, at least not in the immediate near future. Today, however, has been a pleasant surprise. As I’m writing this blog entry, I’m sitting in my backyard, content in the sunshine and squinting to read what I’ve just writen on my laptop screen. The flowers that I have planted are so far behind it looks like it may as well be May in my yard, but my grass is looking green, and this is a huge accomplishment.

This is an area that no one really seems to educate you on – you’ve gotten yourself a new mortgage, you’ve made a few payments on it and everything seems to be in order. Heck, you’ve even set yourself up on the City of Calgary TIPPS program. You are GOOD!

Your first summer in your new home rolls around and you take a trip to Sunnyside to load up on new plants to beautify your home and prove to your neighbours that you will be taking care of your place, in case they ever doubted you. You buy a few new items to speed the process along – Miracle Grow and Bloom Blaster top your list but you also have a few pesky weeds. Not a problem – just pick up a bottle of Round-Up on your next trip to the store. Right? Wrong.

I’ll agree to share this excerpt with you knowing that as silly as it may all sound, I know that I am not alone here. When I cautiously ventured out to see if this had happened to other people before, it had – with results far worse than mine.

You see, as I sit here typing looking out at my yard, there are loads of shiny new circles of green grass. No, I do not have a dog, and nor did the previous owners. Rather, in my overzealousness to stamp out an impending Weed Problem, I took it to a whole new extreme. I grabbed that bottle of Round-Up and conquered those weeds. Squirt. Squirt. Squirt Squirt Squirt. I wasn’t alone here either. My boyfriend ‘helped’ and squirted the dandelions in our backyard. We felt pretty pleased with ourselves and settled down to enjoy a nice, cold beverage on our new patio set.

A few days later we began to see the error of our ways. Large, circular patches of our once green grass lay like the hide of a Dalmation dog. Quickly, after the damage had already been done, friends and family began to weigh in on our dilemma.

“ROUND-UP? You never use Round-Up on weeds.” Or- “I’m surprised you didn’t kill your whole damn yard-” that jewel came from my Father. Okay, okay! We get it! So now what? Well, I spent the better part of the summer digging out the dead circles of grass and sprinkling a mixture of what looked like newspaper and lint, but promised fresh glades of new grass within two weeks. To our surprise and relief, it worked! We still have spotty grass but I like to think that the varying shades of green offer up a nicely textured palette of grass, so to speak.

The long and short of it? Ask around – and don’t be afraid of silly questions, especially if they prevent natural disasters such as ours. Just because you’re a new home owner and you’ve mastered the financing portion of it doesn’t mean you’re expected to know all there is to know about home ownership!

TAX PLANNING WITH THE RETIRED

Saving taxes for the retired is one of the best things you can do for the retired to free up cash flow.  Here are some of the key factors you have to look at for your to save on taxes when you are retired:

CPP, OAS and/or other pensions:  Pension income can be split to lower the couple’s overall taxes paid. You can split pensions and CPP but not OAS.

RRIF (Registered Retirement Income Fund):  RIFFs are treated as pensions in that they can be split between spouses.  Currently, RRIFs have a mandatory annual withdrawal with tax consequences. 

CLAWED BACK OAS:  If you, as a retiree, make too much income, CRA will claw back some of your OAS.  The higher the income, the more that is clawed back.

INVESTMENTS MADE THROUGH CORPORATIONS AND TRUSTS:  If you don’t need the income, investing through corporations and trusts is a way to avoid the personal tax and claw back consequences.

TAXES UPON DEATH:  The biggest tax consequence for a retiree is taxes upon death.  Tax planning for taxes upon death is part of an estate plan.

Enjoying Your Home in the Summer

After a brief absence, I am back and ready to flood your inbox with new blog posts from The Mortgage Circle.

Even though we are currently in the middle of July, it feels as though summer hasn't even begun in Calgary what with all the rain we've been having and all. The search for my new 'summer duvet' has proven to be not necessary, at least not in the immediate near future. Today, however, has been a pleasant surprise. As I'm writing this blog entry, I'm sitting in my backyard, content in the sunshine and squinting to read what I've just writen on my laptop screen. The flowers that I have planted are so far behind it looks like it may as well be May in my yard, but my grass is looking green, and this is a huge accomplishment.

This is an area that no one really seems to educate you on - you've gotten yourself a new mortgage, you've made a few payments on it and everything seems to be in order. Heck, you've even set yourself up on the City of Calgary TIPPS program. You are GOOD!

Your first summer in your new home rolls around and you take a trip to Sunnyside to load up on new plants to beautify your home and prove to your neighbours that you will be taking care of your place, in case they ever doubted you. You buy a few new items to speed the process along - Miracle Grow and Bloom Blaster top your list but you also have a few pesky weeds. Not a problem - just pick up a bottle of Round-Up on your next trip to the store. Right? Wrong.

I'll agree to share this excerpt with you knowing that as silly as it may all sound, I know that I am not alone here. When I cautiously ventured out to see if this had happened to other people before, it had - with results far worse than mine.

You see, as I sit here typing looking out at my yard, there are loads of shiny new circles of green grass. No, I do not have a dog, and nor did the previous owners. Rather, in my overzealousness to stamp out an impending Weed Problem, I took it to a whole new extreme. I grabbed that bottle of Round-Up and conquered those weeds. Squirt. Squirt. Squirt Squirt Squirt. I wasn't alone here either. My boyfriend 'helped' and squirted the dandelions in our backyard. We felt pretty pleased with ourselves and settled down to enjoy a nice, cold beverage on our new patio set.

A few days later we began to see the error of our ways. Large, circular patches of our once green grass lay like the hide of a Dalmation dog. Quickly, after the damage had already been done, friends and family began to weigh in on our dilemma.

"ROUND-UP? You never use Round-Up on weeds." Or- "I'm surprised you didn't kill your whole damn yard-" that jewel came from my Father. Okay, okay! We get it! So now what? Well, I spent the better part of the summer digging out the dead circles of grass and sprinkling a mixture of what looked like newspaper and lint, but promised fresh glades of new grass within two weeks. To our surprise and relief, it worked! We still have spotty grass but I like to think that the varying shades of green offer up a nicely textured palette of grass, so to speak.

The long and short of it? Ask around - and don't be afraid of silly questions, especially if they prevent natural disasters such as ours. Just because you're a new home owner and you've mastered the financing portion of it doesn't mean you're expected to know all there is to know about home ownership!

SELLER FINANCING AND THE VENDOR TAKE-BACK MORTGAGE

Seller financing is usually done by way of a vender take-back mortgage. A vender take-take back mortgage is a mortgage whereby the seller of the property does not get paid a portion of the purchase price but instead registers a mortgage with repayment provisions on the property. In this instance title to the property transfers to the buyers.

There are advantages and disadvantages to a vendor take-back mortgages. One advantage is that vendors are more flexible with respect to interest rates than a bank to make a deal work. Vendors may not require the same kind of credit check than a bank. Care must be taken so that a vendor does not take a risk that they are not comfortable with. Vendors may also be more flexible regarding repayment terms (balloon payments, interest only payments, etc).

Some disadvantages or things to be cautious about mostly are based on a buyer’s inability to make payments. You must be comfortable with the interest rate. A frequent problem arises when the intention is for the vender take-back mortgage to be paid back in a short time frame but the buyers take much longer to do so and are allowed to take longer under the mortgage.

26 Edgeridge Terrace NW – SOLD

26 Edgeridge Terrace NW

Welcome to this beautiful condo that is in amazing condition.  These units don’t come available too often, so don’t miss your chance to live here.  This is a top floor, 2 bedroom, 2 bathroom condo over 1,300 sq ft.  This home boasts 9 ft ceilings, hunter douglas custom blinds and insuite laundry.  The natural light that fills this condo is breathtaking.  The kitchen has brand new stainless appliances and is open to the living room and dining area.  There are two decks off of this unit and both overlook the green space beside the condo.  To top it all off, there is an attached double garage with driveway.  You will not be disappointed when you see this home.

For more info on this property or for questions on yours, please send us an email (sales@tcgroup.ca) or give us a call at 403-366-3130

Calgary Real Estate Update – Video

As I talked about in the video, below is the graph of the current absorption rate in Calgary…

TAX PLANNING FOR THE INVESTOR

Investments are usually found in 3 asset classes:  Real Estate, Paper and Business.  Each class has different tax considerations:

• REAL ESTATE:  Usually income will be rental income (similar to business income) or Capital Gains.  Remember only 50% of Capital Gains are taxed.  The Capital Gain of selling your Personal Residence is exempt from taxes. 
• PAPER:  Usually paper investments such as bonds and other notes produce interest income.  Interest income is taxed at the highest rate of all investment income.  It is important to ensure that you are making a good rate of return on interest to make the after tax amounts worth it.
• BUSINESS:  Usually business investment is in the form of Dividends and Capital Gains such as stocks purchased in a public company.  Both Dividends and Capital Gains have preferential tax treatment. 

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