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The new million-dollar homes
Once held up as a gold standard in the Canadian property market, a million-dollar home might not be luxury anymore.
Depending on your local housing market, it might just be a starter home.
That’s the finding of a Royal LePage report out this week that compared million-dollar properties listed across Canada. While you can still get plenty of space in cities like Edmonton and Regina, buyers with million-dollar budgets are more likely looking at condominiums and bungalows in Canada’s more expensive housing markets.
The Royal LePage report also gave benchmarks for homes listed at around $2 million. In cities like Ottawa and Montreal, the space and location at that price point might be getting closer to the luxury properties Canadians might’ve associated with a million dollars a decade ago.
“In some markets, the new ‘million dollars’ is $2 million,” Royal LePage COO Karen Yolevski tells Global News.
That stark reality comes as housing affordability continued to worsen in the final months of 2023, even for Canadians who can afford to qualify for million-dollar mortgages.
Read on to find out what a million-dollar home looks like in your city today.
Inflation’s slowing – even at the grocery store
For consumers looking for a spot of good news, Statistics Canada’s inflation report for January came with a “pleasant surprise.”
The overall annual inflation rate cooled to 2.9 per cent last month, coming in well below economists’ expectations. Lower gas prices and airfare helped with the decline, and there were even signs of relief at the grocery store.
Grocery inflation slowed to 3.4 per cent in January, down from 4.7 per cent in December 2023. That came as some items even saw month-to-month and year-over-year declines in prices, like the cost of bacon and lettuce.
“It was good news for consumers, for businesses and for the Bank of Canada,” Tu Nguyen, economist at RSM Canada, told Global News this week. “I think that this January report shows that we’re heading in the right direction.”
Stripping out persistent hikes in shelter costs, Nguyen noted that inflation was at 1.5 per cent in the month, showing monetary policy is working to tame price pressures.
While the Bank of Canada can’t ignore housing when it’s tracking its inflation-fighting progress, Nguyen said the central bank will have to decide how much weight it gives shelter when deciding how long it has to keep interest rates elevated.
Read more about what the latest inflation figures mean for the Bank of Canada’s rate cut timeline.
Tax filing is open. Here’s what to know
It’s your accountant’s favourite time of year: the Canada Revenue Agency officially opened its portal for income tax filers earlier this week.
Individual Canadians now have until April 30 to file their income taxes with the CRA. That deadline stretches to June 17 for anyone who owns a business or has a self-employed spouse.
The 2024 tax filing season comes with a few key changes for Canadians who work from home, sold a home or are saving to buy their first one.
For remote workers, a temporary formula that allowed a simplified way to claim expenses related to working from home has officially been removed. What remains is a more detailed method that some experts say might not be as fruitful for some working from home.
Read more here about changes for remote work filers, as well as for Canadians who opened a first-home savings account last year and are set to claim a deduction.
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– THE QUESTION –
“I’ve read that you shouldn’t make an RRSP contribution unless you make at least $60,000 as you’re getting more tax benefit from it. When should you deduct a FHSA contribution? I’ve made two years’ worth for my kids because they will either buy houses or can transfer to RRSP, but both are students so doesn’t necessarily make sense to use the deduction until they are in a higher-income year. Is there an ideal income level to start claiming the deductions?”
— A Money123 reader
“The income deductions for a Registered Retirement Savings Plan (RRSP) and First-Time Home Buyers Savings Account (FHSA) are more or less the same. You can deduct your RRSP/FHSA contributions from your taxable income and reduce the income tax you pay for the year. But with an FHSA, you can withdraw amounts tax-free when you purchase your first home. Withdrawals from your RRSP are included in your taxable income for the year unless you use the First-Time Home Buyers’ Plan.
There’s no ideal income to earn before you should deduct FHSA contributions from your income. If your children enter professions where salaries grow exponentially after a few years, it’s worth saving the deductions until their salaries stabilize at that higher level. For example, an accountant who is in the process of getting their Chartered Professional Accountant (CPA) designation or a doctor in their residency years should not use their FHSA deductions so soon. An accountant or doctor can expect a large salary increase once they obtain their CPA or finish residency. So, the deduction is better used after their salaries receive this jump.
If your children’s earnings are expected to grow slowly over time, it may be better to not wait too long. Any tax refunds they receive can be reinvested to make additional investment income. With that being said, it’s not recommended that they use all of their available income tax deductions all at once, but instead over a few years to maximize their tax refunds. When in doubt, speaking with an accountant or financial planner can help your children best utilize these tax deductions.”
— Adrian Zee, personal finance writer
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