Deductions

Interest on income producing assets
If you’ve borrowed money to invest or own a rental property, you can claim the interest. It’s something that may be easy to forget, since you can’t claim interest payments on credit cards or your non-income producing property. But if you’re paying the bank every month for an investment loan, you can get a deduction. “You won’t get a slip,” says Courcelles, so make sure you ask the bank for a receipt.

Safety deposit box deductions
This might come as surprise, but you can deduct your safety deposit box expenses. It’s true! Just get a receipt from your financial institution.

Union or professional dues
Those pesky union or professional dues getting to you? You’ll be happy to know they can be deducted too. This only works if your employer is not paying for them, but for many lawyers, chartered accountants and other Canadians with a professional designation, these costs come out of pocket.

Moving expenses
Good for students and workers. If you moved more than 40 km for a new job or school you can deduct those expenses. Everything from renting a U-Haul to hotel and meals are covered.

Credits

First Time Home Buyers Credit
Buying a home is stressful and costly, so you may not have been thinking much about tax time when you purchased your new abode. Now that you’re crunching the numbers though, make sure you claim the First Time Home Buyers Credit. As the name suggests, this only applies to Canadians who are buying their first place, and you had to purchase the home after January 28, 2009. You’ll get $750 back with the credit and “you can make as much or as little as you want, as long as you bought a house,” says Courcelles.

Medical expenses
Many Canadians have the misconception that all our healthcare related needs are covered. Not so. We still pay for medicine (if an employer doesn’t cover the full amount), some or all dental costs, extra doctor fees, orthodontists, chiropractors and the list goes on. If your bills exceed 3% if your net income, or $2,011 — whichever is less — you can claim those expenses.

Courcelles says it’s best to pool these expenses onto the lower income spouse’s return, so that 3% will be exceeded quicker than if it was on the higher earner’s return. It’s important to note that you can only claim what you pay yourself. If an employer covers 80% of medical expenses, you can only claim the other 20%.

Eligible dependent credit
This one applies, in most cases, to single parents. If you’re raising family without a partner — whether you’ve been divorced, widowed or are a single parent — you can get this credit. The eligible dependent amount is $10,320 minus the dependent’s income. “If you have a 5-year-old child who has no income you multiply the $10,320 by 15% and that’s your credit,” says Courcelles. This also works for child support payments, and you can claim the credit if your spouse makes less than the eligible dependent amount.

The origin of ‘halcyon’ goes back to Greek mythology – the halcyon is a mythical bird that had the ability to calm the seas in order to safely hatch her eggs on its floating nest. To sailors, halcyon days are the two weeks of calm weather in the wintertime. More recently, the phrase ‘halcyon days’ is used to inspire nostalgia about the endless sunny days in one’s youth.

Seems the perfect name to me. In the latter half century, Sherbourne St. has had more than its fair share of troubles (not to mention the pre-park conditions of the area being built upon). This park at the foot of the street will hopefully serve as an anchor and bring tranquility to what I find to be a lovely neighbourhood and area.

Some interesting backstory to ‘halcyon days’ can be read here. A plaque with the relevant segment from Ovid’s poetry would be a great finishing touch on the park.

Last bit: I like the name “Halcyon Days Park”, but “Halcyon Park” is quite nice as well. You decide!

At first glance, when you buy a house for, say, $500,000, you are increasing the left side of your personal balance sheet (your assets) by $500,000 dollars. If you used $50,000 as a downpayment, which came from your own assets, the increase in assets was only $450,000.

On the right side of the personal balance sheet, you had to finance the purchase of this house with debt, so if you made a 10 per cent down payment and financed the other $450,000, your liabilities have increased by $450,000 in total. The important thing to remember is that the equity on your personal balance sheet has not changed. You have $450,000 more in assets and $450,000 more in liabilities–and you’ve converted financial capital into a down payment.

Now let’s examine what your personal balance sheet will look like in five years, ignoring human capital considerations. If you have been carefully paying down your mortgage debt, perhaps the remaining liabilities have been reduced to $400,000. And, even if housing prices have not increased at all, you have created $50,000 more in equity in your home, for total equity of $100,000. (This is the original downpayment of $50,000 plus the $50,000 in total payments over the last five years.) So far, so good.

But now let’s imagine that housing prices fell by 20 per cent over that same five-year period. This isn’t inconceivable–and is exactly what just happened in many regions of the United States over the last five years, as shown in Table 6.1. In that case, a 20 per cent drop in the value of a $500,000 house leaves you with a balance sheet asset of $400,000. This is exactly what you owe in debt (mortgage) on the house, and you have no equity. The $50,000 you originally invested in the house is gone, and all the payments you have made in the last five years could essentially be considered rent.

You are no further ahead now, financially, than you were five years ago. All you did was consume housing.