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BC’s 2018 budget was announced on February 20th. Its focus was to provide lower income households with tax relief. It provides some parents with reduced child care fees while also reassuring parents that spaces in child care and in schools would become more adequate.

There are numerous articles that focus on the many highlights (some are listed below) that will work to assist the many varied interests of middle and lower income households in BC. Less reported however is that in order to provide the tax relief outlined within the budget, the BC Government will undertake a record-breaking capital spend and increase overall taxes to the tune of $4.4 billion over three years.
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The majority of people we talk to do not understand how Tax-Free Savings Accounts (TFSA) work or how to best utilize them. This is partly due to how TFSA’s have been marketed by the banks. Here are some key things to know about these valuable tax shelters the government implemented in 2009.

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First Time Home Buyers

If you’re a first-time home buyer in this province (BC), there are few things that you should be aware of as you may be able to take advantage at this time. Nowadays there are two areas to first time home buyers: RRSP limitations and property purchase advantages. The first revolves around tax-free allowable withdrawals of up to $25K per person towards the purchase of a new home. This one isn’t so new anymore, as it’s been around for years.

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The Registered Disability Savings Plan (“RDSP”) is one of the least talked about Registered Savings Plans on the market today.  To be honest, this plan is becoming more recognized because the Government of Canada is marketing the plan for Canadian’s with a disability.  In the past, RDSP’s have flown under the radar; however, throughout the past year, more and more people have been asking about it.

It is a little more complicated than your typical RRSP or RESP.

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In life and finances, the government is our biggest business partner, usually in the form of taxes.

If you are a business owner:
1.  You are a tax collector (payroll taxes, GST, PST).
2.  The government is your business partner (corporate taxes).

As a family, taxes are often your largest expense:
1.  Income tax (as high as 45.7% of every dollar you earn).
2.  Sales taxes (GST, PST).
3.  Property taxes, and so on.

Fortunately, the government has provided different vehicles to help us plan when we pay our taxes (RRSP, TFSA, pensions, IPPs). These can all be great vehicles to help us defer, smooth out and/or lower our tax bills.

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The way we look at it, if you’re going to own something you might as well get paid for owning it. The more things in life that can produce cash flow, the closer you will be to subsidizing your income as we prepare for retirement. Take real estate for example – you own a piece of land, you have the option to rent it out, and not only does your property have the potential to appreciate; you get paid while you own it through rental income. Any viable investment should produce some sort of income. That income values you, the investor, for putting your hard earned money into it. In fact, many of you are getting paid on your investments right now, without even realizing it. The way you get paid to invest is through earning dividends. Read more