Impacting Small Business – The Latest Tax Code Update:

CoryVance • Sep 07, 2017

Here is what you need to know about the latest moves by the federal government as it pertains to the tax code. Originally published on the Mortgage Professionals Canada website, the following article summarizes the proposed changes and outlines how you can make your voice heard.

Tax Code Update

Federal Finance Minister Morneau announced the launch of consultations aimed at implementing tax code changes to tax planning strategies involving the use of private corporations. If your business is privately incorporated you may be impacted by the proposed changes.

The Rationale

The government feels that making changes to the way some Canadians use the small business tax rules will improve the fairness of Canada’s tax system because “many of the richest Canadians are unfairly exploiting the tax rules designed to help businesses thrive.” The government has launched consultations, with an October 2, 2017 deadline specifically on amending the following three tax practices that are, from the government’s perspective, being used to gain unfair tax advantages:

Income Sprinkling
Diverting income from a high-income individual to family members with lower personal tax rates, or to those who may not be taxable at all.
Passive Investment Income
Some individuals retain investments in a corporation, taking advantage of the fact that corporate income tax rates are much lower than personal tax rates for higher-income individuals.
Capital Gains
Converting a private corporation’s regular income into capital gains to take advantage of the lower tax rate.

More information on these specific measures and proposals can be found in the Technical Briefing Deck: Tax Planning Using Private Corporation.

Mortgage Professionals Canada will be assessing the proposals in more detail and will provide materials to assist members with their own submissions.

If you feel you may be impacted by these changes, we encourage you to submit a letter through the public consultation process by the October 2 deadline and immediately contact your Member of Parliament to obtain more information about what this means for you.

The government lays out these proposals in more detail and invites public input in their White Paper. Written comments may be sent directly to fin.consultation.fin@canada.ca.

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CORY VANCE

403-614-9211

cory@coryvance.ca

Older Canadians Have Mortgage Options

By Cory Vance • 07 May, 2024

Although it’s ideal to have your mortgage paid off by the time you retire, that isn’t always possible in today’s economy. The cost of living is considerably higher than it has ever been, and as a result, many Canadians are putting off retirement, hoping to make just a bit more money to add to that nest egg. So if you find yourself in the position where you’re considering your mortgage options into retirement, you’ve come to the right place. The advantage of working with an independent mortgage professional instead of a single bank is choice. When you work with an independent mortgage professional, you won’t be limited to an individual institution’s products; rather, you will have access to considerably more options. Here are some options available to older Canadians as they plan for mortgage financing through their retirement. Standard Mortgage Financing If you’ve got a steady income, decent credit, and equity in your home, there is no reason you shouldn’t qualify for standard mortgage financing, which usually comes at the lowest interest rates and best terms. Some lenders use pension and retirement income to support your mortgage application even if you’ve already retired. Reverse Mortgage Financing A reverse mortgage allows Canadian homeowners 55 years and older to borrow money from their homes with no proof of income, no credit check, and no health questions. A reverse mortgage is a fabulous mortgage solution that has helped thousands of older Canadians enhance their lifestyle. Home Equity Line of Credit (HELOC) A line of credit secured to the equity you have in your home is an excellent tool to allow you to access money when you need it but not pay interest if you don’t need it. Many older Canadians like the idea of rolling all their expenses and income into one account. Private Financing If you happen to be in a bit of a tight spot, you have a plan but need a financial solution; private financing might be the answer. Indeed not the first choice for many because of the higher interest rates. However, private financing can provide you with options where a traditional bank can’t. If you have any questions about securing mortgage financing for your retirement, please connect anytime. It would be a pleasure to work with you and walk you through all your options.

What You Need To Know About Online Mortgage Calculators

By Cory Vance • 23 Apr, 2024

You’d think an online calculator is a pretty straightforward device, one that you should be able to place your confidence in, and for the most part, they are. Calculators calculate numbers. The numbers are reliable, but how you interpret those numbers, not so much, especially if the goal is mortgage qualification. If you rely on the numbers from a “What can I afford” or “Mortgage Qualification” calculator without talking to an independent mortgage professional, you’re going to be misinformed. Don’t be fooled. Even though an online mortgage calculator can help you calculate mortgage payments or help you assess how additional payments would impact your amortization, they’ll never be able to give you an exact picture of what you can afford and how a lender will consider your mortgage application. While mortgage calculators are objective, mortgage lending isn’t. It’s 100% subjective. Lenders consider your financial situation, employment, credit history, assets, liabilities, the property you are looking to purchase. Then, they will compare that with whatever internal risk profile they are currently using to assess mortgage lending. Simply put, they don’t just look at the numbers. An online calculator is a great tool to help you run different financial scenarios and help assess your comfort level with different payment schedules and mortgage amounts. However, if you rely on an online calculator for mortgage qualification purposes, you’ll be disappointed. The first step in the mortgage qualification process is a preapproval. A preapproval will examine all the variables on your application, assess your financial situation, and provide you with a framework to buy a property based on your unique circumstance. Securing a preapproval comes at no cost to you and without any obligation to buy. It’ll simply allow you the freedom to move ahead with confidence, knowing exactly where you stand. Something a calculator is unable to do. Please connect anytime if you’d like to talk more about your financial situation and get a preapproval started. It would be a pleasure to work with you.