Giving a child a condo versus an RESP - HELOC and

My question is: Canadian-specific
QUESTION: My wife and I have two young children, ages 6 and 9.  At
present, we have some cash for a down payment to buy a
condo.  Our intent is to buy it now and rent it out until
they are older so that they can have it when they go to
University.  With condo prices soaring the way they are, I
believe it is best to put our money into real estate rather
than an RESP.  What is your opinion on this and how can I
avoid paying huge taxes, especially since we are giving it
to them when they are older?
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david ingram replies:
I prefer in trust accounts to own the real estate directly NOW in the
children's name.
That way, any profit or loss as the case may be will be taxable to you until
the children reach the age of 18, but will be taxable to them as they start
university or college or just get on with life.
The good part about this method is that the capital gains will be taxable to
the children and NOT you as it would be if you start with it in your name.
A hint.  If your own mortgage is not deductible, take the down payment you
have and pay it down first on your own mortgage.  Then take out a HELOC for
the down payment.  That part of the interest will be deductible on what was
not deductible before.
"THEN", you can take the rent that comes in and use it to pay down any other
part of the mortgage which is not deductible and borrow more money to make
the expenses on the rental house.
You can goto www.centa.com and click on the November 3001 newsletter (top
left hand corner).
You will likely need some guidance if you wish to pursue this.  Fred
Snyder's Thursday night seminars will help.
Answers to this and other similar  questions can be obtained free on Air
every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, I, david ingram am a
permanent guest on Fred Snyder of Dundee Wealth Managers' LIVE talk show
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Callers to the show and questioners on this board can also attend the
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ask international income tax & immigration expert consultant david ingram
from North Vancouver, BC, Canada experts on RRSP RESP IRA 401(K) radio CKBD
600AM 9 AM Sunday mornings on Fred Snyder's IT's YOUR MONEY

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