Interest Rates on RRSP Mortgages

Podcast Episode 96:
“RRSP Mortgages.

In Canada, it is possible to use money held in a Registered Retirement Savings Plan (RRSP) to fund mortgages. While this strategy can yield a nice steady return on investment, there are rules in place that can make it a bit tricky to get into. One of those rules is that the lender (i.e., the person with the RRSP) must use a third party trustee to administer the mortgage. This Tale is about dealing with a couple of different trustees and their policies on interest rates. RRSP mortgages must legally be “commercially reasonable,” but apparently there is a lot of room for interpretation of what exactly that means…

 

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“Mortgage” image courtesy of NYPhotographic.com used under Creative Commons Attribution-Sharealike 3.0.

Joint Ventures, RRSP Mortgages, Due Diligence, & More!

Podcast Episode 92:
A Few Quick Tales.”

Here’s some great stories about people buying and selling real estate in Alberta. These five quick Tales from the Trenches are short, but they show a wide range of different issues, problems, and successes.

In a joint venture, it’s always nice when a more experienced investor can help out someone who’s just getting started, which is the subject of the first Tale. The second deals with rules surrounding RRSP mortgages. Did you know that the money needs to be at arm’s length from the person whose RRSP it is? The third Tale is about Alberta Health’s Minimum Housing & Health  Standards. I’d recommend anyone looking to buy real estate in Alberta take a look at these (available HERE), especially if they want to rent out the property. The second last Tale is about seller’s warranties. They can be hard to enforce, and so due diligence with things like fire safety searches is important before committing to buy. Finally, a real estate deal that is too good to be true can have hidden problems. It might still be a good deal, but it’s best to look a gift horse in the mouth by still doing your due diligence.

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If you’re buying or selling real estate in Alberta, get yourself an experienced Edmonton lawyer. Use the contact form below!

House/Home Inspection” image by Mark Moz used under CC Attribution 2.0 Generic.

RRSP Mortgage Guidelines

With an RRSP Mortgage,
Can You Really Have Your Cake & Eat It Too?

Well, there’s still some things to consider about my previous post regarding Jamie Golombek’s column on RRSP mortgages in the National Post. It’s new for the CRA to recognize that interest is deductible in the circumstances as set out in the article, so this bears a bit more analysis. My last kick at the cat is as follows: Continue reading

RRSP Mortgage

You CAN Have Your Cake & Eat It Too, Says The CRA.

Many clients want to use their own RRSPs to help them buy investment property. Previously, it hasn’t worked because you can’t do a ‘non-arm’s length mortgage’. In other words, you can’t lend to yourself. The exception was for a personal residence—but not allowed for an investment property.

 News Flash! According to The National Post’s tax expert Jamie Golombek, a CRA technical interpretation says this can sometimes happen.

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