noobienoob wrote: ↑Dec 8th, 2018 6:54 pmthis is really useful advise, thank you very much. I never heard of the term before so let me keep that in mind.
does having a semi-detached versus a freehold, matters for the potential to add a separate entrance? I don't think my fiance is a fan of strangers in the house but i can totally see how this helps so much.
just curious by referring to the government, do you mean RRSP, first-time home buyer tax, less land transfer tax, etc?
What "term" had you never heard of before?
A "semi detached" and a "freehold" are two completely different things. Having a freehold means you're not paying any maintenance fees or condo fees to a property management company. The opposite of a freehold townhouse is a condo townhouse.
You DO NOT want a condo townhouse. Actually, you don't want a townhouse at all if you're going to rent out the basement. The'ye way too small in the basement. A bungalow - - specifically, a raised bungalow - - is king for that.
The opposite of a semi detached is a fully detached. You can put a basement apartment in either, but obviously the fully detached is preferable.
One of the essential things you'll need is a separate entrance to the basement. When it's properly set up, there's ZERO interaction - - or a close to ZERO as possible - - between the people downstairs and the people upstairs.
Do you and your woman have any RRSP room or are you both maxed out? If you've got some contribution room, here's what you do:
Go to the bank and get an RRSP loan right now for $25,000. That's the max you can withdraw under the first time homebuyers program. Put it in something ultra conservative with no redemption fees, or just leave it sitting as cash until you "decide" what to invest in.
Banks will throw money at you for an RRSP loan because they know you're likely going to hand it right back to them to buy some of their useless mutual funds. DO NOT mention you're going to be pulling it out in 90 days under the HBP because they won't be excited to let you use them like that.
What tax bracket are you and your woman in? Let's assume your marginal rate is 30% - - that means you're going to get a $7500 tax refund this spring.
Add the refund to the $25k you pull out of the RRSP and now you're sitting with $32,500.
Lastly, if at all possible, DO NOT put both names on title. If you do, it's going to limit the number of future properties you can purchase.
If you both go on title for this one, that means you're both on the hook for the mortgage. Put your woman on title and then when it's time for the next one, you won't have the mortgage liability against you. This will make financing much easier, and you'll be able to RRSP maneuver again.