If you’re someone who has your money somewhere other than Vancouver real estate you’re probably familiar with the TFSA. And you probably know the limit has just been doubled to $10k a year.
Critics say this move only helps the wealthy and creates a future tax problem.
Joe Oliver says we should leave that problem for the PMs grand-daughter to solve.
On Tuesday’s The Exchange with Amanda Lang on CBC News Network, the finance minister told Lang that criticism of his recently unveiled budget is unfounded, arguing that the benefits for Canadians today more than offset any future revenue problems associated with it that may or may not ever come to pass.
The doubling of the TFSA limit to $10,000 per taxpayer every year was a core plank of Oliver’s balanced budget. But critics including the opposition parties and private sector economists have said the populist move will create a revenue problem for governments down the line, as more and more investments get protected from taxation.
So what do you think about the TFSA limit increase? A tool only for the wealthy or a bit of extra help for savers?
At this time of year most people are thinking about topping up their RSP to get a bit of a tax break, but unfortunately some Canadians are making plans to cash out their RSP before retirement to pay for living expenses.
As politicians wring their hands over Canadians’ lack of retirement savings, figures obtained by Global News from years of tax filings indicate a significant jump in the number of Canadians making early withdrawals from their RRSPs – not for housing or education, but simply to make ends meet.
The biggest increase was from 2007 to 2009, when 1.86 million Canadians took out RRSP cash early. That figure dipped slightly by 2012, to 1.82 across Canada, but remains about 7 per cent above 2007 levels nationally, 12 per cent above 2007 levels in Quebec and almost 10 per cent above in comparatively wealthy Alberta.
Read the full article over at Global News.
Skook has a post over at VancouverPeak.com about an island dream gone sour.
A BC couple purchased land on Mayne island and started building their dream home only to run into a confluence of cost overruns and real estate market downturn.
Today, their house is only a wood frame shell that looks out over one of B.C.’s most dramatic views, with the Lower Mainland in the distance, and regular sightings of ferries, whales and seals. The tiered wooded lot is only a five-minute drive to the ferry.
It is the idyllic best that B.C. has to offer, and yet the Klingsats won’t even break even on the near $1-million they spent on the property and construction. They have relisted it for $539,000, after previous listings at $649,000 and $699,000 didn’t get any offers. “Everybody loves the place, but the people don’t want a house that’s not finished,” says Mr. Klingsat, who gave up on the project six months ago. “And I can’t do it. I haven’t got any more money to put into it. “The whole economy everywhere is lousy – nothing is gangbusters. There are places for rent all over here on Vancouver island.”
The original article in over at the Globe and Mail. Skook adds some extra thoughts and information.
RFM has also added some information summarizing other properties in that particular island market. There are 113 properties for sale on an island with a population of 900.
From the obvious files: expensive homes are expensive.
The Globe and Mail has an article about changing attitudes towards real estate by Generation Y in Vancouver.
Essentially: they are more inclined to live urban and remain mobile.
They also say that Boomers are downsizing into condos.
Ben Smith, VP of sales and marketing at Rennie & Associates, says he’s already seen a major shift in the last six months. This year he’s seen a sudden surge in demand for three-bedroom condos, purchased by downsizing boomers. Those boomers are trading their homes for spacious condos. Those same boomers are helping their kids with a down payment on their own condo, which is the only way a lot of Millennials will ever afford to live in Vancouver.
“It’s exciting, because for years we’ve been talking about this, and we’re finally seeing it happen,” he says. “There is $88-billion worth of clear-title real estate tied up with boomers. In B.C. and Vancouver especially, we are all equity and no income. If you don’t have that down payment, you don’t have a home.”
Read the full article here.
In shocking news, it would appear that many Canadian boomer savings levels are below what it would take for a comfortable retirement.
Way back in 2006, about 20% of the boomers that responded to a BMO survey said they were not confident they had enough savings to retire on.
Now? That’s changed to 46% of boomers who say they don’t have enough to retire on.
Most boomers said they would like to retire at 59, but will need to work until 63.
The plan for many is to take a part time job or sell off belongings.
About 32 per cent expected to sell their home, while another 19 per cent said they will rent out part of their home for additional income.
To Buttigieg, boomers’ ability to save may have been affected by the challenges associated with paying off a mortgage, helping children through university and caring for elderly parents.
Inflation, low returns, living a long life and health issues call also spoil retirement plans, according to Mastracci, but he says one of the biggest problems continues to be debt loads.
“A lot of retirees still have debts (and) they have to clear the deck,” he said.
A recent report from Equifax says a growing number of seniors are taking on more debt to fund retirement lifestyles.
Hat-tip to Many Franks.