Dear David, I need your advice on the following situation: I currently own a townhouse in Coquitlam, worth approx 300,000 and have about $200,000 in mortgage. I am single, live with 2 kids, make 63,000/yr, 43 yrs old, worked with the same company for 6 yrs (management). My mortgage is quite high because I added the reminder of my student loan to the entire amount. This is my first property and I used RRSP's to help with my down payment. I am repaying them back on time. I would like to purchase a home with a rental suite and have renters help with the mortgage. I have no savings, all of my money goes to mortgage and my RRSP's. Question: Can I use more of my RRSP's to help me with the purchase of a new property? My financial record is not the best, after 6 yrs in schools I had to declare bankruptcy and Banks don't love me too much. I am afraid I might not be able to secure a good loan at a good rate because of it. Thanks David ------------------------------------------ david ingram replies: What you are suggesting is likely a good idea. Having a more expensive house with a mortgage helper is a sensible thing to do in this day and age. You can not take any more money out of the RRSP tax free but if you need it to help with a down payment, taking it out and paying the tax may be the best way to get the necessary money. The RRSP is taxable in the future, the house, even with a rental suite is capital gains tax free although the rent is taxable. However, it is unlikely that the rent will be taxable for several years as you deduct the relevent expenses against it. And, if you use the techniques in the November 2001 newsletter in the top left hand box at www.centa.com, you can make most, if not all, of your other mortgage interest deductible as well. -------------------------------- David Ingram's US / Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists My Home office is at: 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Cell (604) 657-8451 - (604) 980-0321 Fax (604) 980-0325 Calls welcomed from 10 AM to 10 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) email to taxman at centa.com <mailto:taxman at centa.com> www.centa.com <http://www.centa.com/> www.david-ingram.com <http://www.david-ingram.com/> Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation in connection with personal or business affairs such as at www.centa.com <http://www.centa.com> . If you forward this message, this disclaimer must be included." Be ALERT, the world needs more "lerts" David Ingram gives expert income tax & immigration help to non-resident Americans & Canadians from New York to California to Saudi Arabia to Mexico to China or Chile - Cross border, dual citizen - out of country investments are all handled with competence & authority.
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