Monthly Archives: December 2009

How to take advantage of the Home Renovation Tax Credit

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Not only does renovating your home create new levels of comfort and convenience for your family, it can reduce energy consumptions and maintenance costs, as well as increasing your home’s resale value. For a limited time only, the government of Canada is willing to help you pay for your renovations!

The Home Renovation Tax Credit (HRTC) is designed to encourage Canadians to do new renovations or move ahead with projects they may have been postponed.

If you proceed with eligible home renovations before February 1 2010, you can claim a 15% tax credit on the portion of eligible expenditures exceeding $1000.00, but not more than $10,000.00. This means you can get back up to $1350.00 from the government when you file your 2009 tax return.

The HRTC can be claimed on houses, cottages, condominium units owned for personal use. Eligible projects include renovating a kitchen, bathroom, basement, installing new carpet or hardwood floors; building an addition, deck, fence; replacing your furnace or water heater.  Routine repairs and maintenance do not qualify, neither do purchases such as appliances, electronics or construction equipment. 

Of course the big question is, “Where am I going to get the money to do the renovations?” Like so many worthwhile investments, the HRTC requires you to spend money in order to make money. The good news is that if you are like most Canadian homeowners, you may be able to fund your renovations with the equity you have built up in your home. By renovating strategically, your improvements can pay for themselves, plus create a healthy profit when you sell!

As your mortgage advisor, I would be happy to review your current situation to see if you can benefit from refinancing at today’s low mortgage rates. It is entirely possible that you can enjoy a newly renovated home and receive your tax credit, without increasing your monthly mortgage payments.

Why Michael Jackson died broke and how to learn from his mistakes.

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The King of Pop made the best-selling album of all time, thriller, with sales of 100-108 million copies. Yet in spite of the huge revenues he continued to receive from such recordings, Michael Jackson died broke. How could this be you ask?  The answer to this question reveals some important lessons for anyone who wants to achieve long-term financial freedom.

Michael’s main problem was that as his income dwindled in recent years, he never changed his spending habits. In 2005, a forensic accountant testified that Michael was spending $20-30 million more per year than he earned and he was in debt by as much as $285 million.

Unfortunately, Michael did not understand the difference between good and bad debt. Borrowing money to pay for living expenses and possessions that never pay a return is bad debt. It may give you short-term pleasure, but it offers no long term value.

Instead of buying the latest big screen TV and taking exotic trips, set more money aside so you can eventually start investing in assets that will increase in value over the long term. This is good debt and includes borrowing to pay for retirement investments, strategic renovations to your home, or the purchase of a revenue generating property.

It is true that Michael did choose some good debt, like buying the rights to the 259 Beatless’ tracks, now estimated to be worth $1 billion, this investment will at least be enjoyed by his heirs.

Here’s the key lesson you want to implement. Live within your means and set aside at least 10% of your income to invest in cash flow producing assets.  Do this, and you will never have to lose any precious sleep worrying about how you will make ends meet.

If you would like some tips on using the equity in your home to start investing in return producing assets, so you can enjoy financial security and avoid dying in “Neverland” – talk to me today. As your independent mortgage advisor, I can offer objective advice and give you access to innovative, affordable financing so you can position yourself for an abundant future.