Canadians are among the most heavily taxed in the industrialized world

Canadian Tax Issues

First Published Date: Jan 31, 2009

To paraphrase Benjamin Franklin, nothing in life is certain except for death and taxes. It is a legal requirement that we must pay tax on earnings and purchases in addition to other more specific levies that pay for our public services. This is a necessity, but that does not make it any less galling when the time comes to give up a portion of the money we have earned. Taxes are indeed such a vexed issue that those of us who can afford to often employ a financial advisor or accountant whose knowledge of the system can spare us at least some of the unnecessary tax expenses that often go unnoticed due to the less than total comprehensibility of the system.

One way to defray at least some of your tax burden is to invest some of your money in bonds. When a bond matures it is seen as a capital gain, and only half of the proceeds of capital gains are taxable under Canadian law. There are jobs that pay a portion of their salary as bonds for this very reason, although this is obviously unpractical for those whose income falls below a certain threshold. However, as Canada’s taxation system is progressive, with a higher rate paid by those on larger incomes, some people argue that this legal tax avoidance measure is simply a way of redressing an unfair balance.

Sales taxes also account for a portion of each Canadian citizen’s tax burden. Depending on which province the sale takes place, the tax on a sale can rise as high as 13%. Certainly all provinces other than Alberta have a Sales Tax level of 10% or more, with Alberta clocking in at a comparatively tiny 5%. Therefore, if it is practical for you to do a large amount of your purchasing in Alberta, this is one way in which you can avoid being stung for more cash. Prince Edward Island is comparatively a high sales tax area, with a  taxation level of 15.5% of the cost of the sale. Thus, an individual who pays most of their Sales Tax within Prince Edward Island can, at least in theory, unburden themselves of more than two-thirds of their tax loss by doing their shopping in Alberta.

Unlike most of the Western world, the Canadian government does not impose Inheritance Tax on its subjects. Inheritance is seen as another form of capital gain and therefore subject simply to Capital Gains tax just like bonds or stocks. Though to benefit from this absence of Inheritance tax, someone needs to die – which takes us neatly back to the words of Benjamin Franklin all those years ago. One other thing – if you like a cigarette and a beer, and drive an air-conditioned vehicle, then you are paying four different kinds of Excise tax. It might be time to look at whether you can walk to the liquor store.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Jan 31, 2009.

3 VOIP Communication Apps That Save You Money

Cheap International Calls from Smart Phone Apps

First Published Date: February 11, 2015

A VOIP App like Skype will give you very good voice quality, there is no doubt about it. However, whenever it comes to balance, getting good voice quality, and lower rates, Skype fails to make the list, as its rates are very high and unrealistic. Today, I will talk about 3 telecommunication apps you can use to make international calls on your tablet or smart phone at reasonable rates without compromising voice quality.

Ringo: Ringo is distinctive in that rather than using Wi-Fi it uses your local cell network on your phone to make international calls at incredibly low rates. I have not seen any other apps that beat Ringo’s low rates and still retain excellent voice quality. The only drawback of Ringo is that you wont be able to use it on your tablet, as it requires a cell network to make calls. However, as phones are getting bigger like tablets, most people will abandon their tablet at some point in the future, making Ringo a must-have app on your smart phone. Minimum load is $5.

OTO: OTO uses Wi-Fi to make calls and call quality is good enough to keep it as your Wi-Fi VOIP app. Rates are comparable with other VOIP apps and sound quality can beat most other Wi-Fi VOIP apps available. OTO also offers free international calling only from Korea. Minimum load is $10.

Google Hangouts: In the past, Hangouts voice quality was not that good. I noticed that it has improved a lot since then. The main advantage is if you are using Android phone, Hangouts is already on your phone. International rates are low and you can call anyone in Canada and USA for free.

The Tallest Residential Building in the World

Q1 – World’s Tallest Condo

First Published Date : June 25, 2009

When it comes to building a tower that will stick in the minds of the people of the world, there is nothing like height for making your point. Certainly there are world famous towers that do not rely on height to take their place among the elite, and no-one would seek to deny that – the Eiffel Tower is one such building – but when it comes to new builds, if you want to truly impress a watching world there is nothing like a skyscraper to get heads nodding and tongues wagging. For this reason, the tallest buildings in the world will always be the subject of much discussion, and this makes the title of “tallest residential building in the world” one that is keenly fought for.

The current holder of this title is Q1 (short for Queensland One) located in Surfers Paradise on Australia’s Gold Coast. Standing at an amazing 1,058 feet tall and 78 storeys high, Q1 is truly remarkable. It is one of those buildings that throws up fascinating facts whenever it is brought up in conversation, simply because it is hard to convey how remarkable something is through raw data alone. Among other  things, the building is capable of withstanding the force from ten jumbo jets pushing against it – in the highly unlikely circumstance of that happening – because it has a reinforced “honeycomb” core. The elevator in the Q1 can go from the bottom to the top floor – 77 floors up – in 49 seconds.

Facts like these are what it takes to convey just how impressive the Q1 tower is. It is perhaps no surprise that it cost approximately AUS$400million (US$307million) to build. If you want to live there, however, you will need to take on a substantial cut of that cost. Olympic champion swimmer Ian Thorpe reportedly bought the Penthouse apartment for a sum of money believed to be in the range of $12million, immediately making it the most expensive apartment in Queensland. To stay in the building for a night will cost you less than that – in the region of AUS$319 (US$245).

Often when a building of similar size is built, there is a concern about its height making it structurally unsound, and at its highest point a risk of vulnerability in high winds. For the Q1 this is not a problem – the furthest it will move even in a cyclone is  600 millimetres.

Of course, all of this says very little about the building itself as a residential property. On that front, it is one of the most desirable places in Australia and beyond with world class dining and recreational facilities as well as retail outlets and a very strong aesthetic. There is tropical landscaped garden along with lagoon pools, and for those people who need to relax after a long day there is also a day spa. Top class conference facilities make it an ideal place for a business investment, too.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the realestateexpedition.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on June 25, 2009

How to Fix Credit Score

Tips to Fix Credit Score

First Published Date: February 18, 2015

A bad credit score can make it difficult to get a loan or mortgage and also force you to pay more interest than you would normally pay with a better score. Today, I will talk about some simple things you can do to improve your credit rating.

Check Credit Report – Contact credit bureaus like Equifax or TransUnion to obtain a free copy of your credit report every year. This can be done online as well. If you find any errors, have those corrected by filling out a form or you can contact your financial institution if they caused the error.

Have A Mixture of Credits – Having different types of credits such as credit cards, personal loans, and mortgages help improve your credit score.

Don’t Be Rough on Your Bank Account – Stretching your bank accounts beyond their limits such as writing NSF cheques, drawing overdrafts, etc. will hurt your score.

Pay Off Credit Cards – Paying off your credits positively affect your credit score more than paying off other instalment loans such as mortgages, personal loans, etc. Try not to exceed 30 personal balances on each card in which you carry a balance.

Use Old Cards Sometimes – Don’t keep too many credit cards, but don’t close your oldest credit cards either. Charge a few dollars on those oldest cards occasionally and pay them off right away. Keeping these cards active will have greater weight on your credit score.

Don’t Believe – Don’t believe ads that promise to fix your credit score faster by paying them fees. The facts that affect your credit score cannot be erased or fixed by someone and will follow their course to stay on your report until they complete their timeline. Only you can improve your credit score by acting responsibly and taking proper steps in the right direction.

Canadian Real Estate

Current Financial Crisis and Housing Market

First Published Date: February 15, 2009

When the current financial crisis hit, the first industry shaken was the housing market. After all, one of the catalysts for the so-named “credit crunch” was the vexation in the United States’ “sub-prime” mortgage market, where irresponsible lending at unsustainable levels caused banks to lose solvency with terrifying rapidity.

As a result, the real estate market in the US and beyond fell victim to a major crisis of confidence, and the knock-on effects of this continue to shake the world’s economy. Injections of capital by some governments, and lock, stock and barrel takeovers of banks by others have introduced some measure of stability, but even now that stability is under almost permanent threat.

The consequence of this uncertainty has been a fall in house prices, as home owners have defaulted on mortgages and had to sell up and the market, for so long a seller’s domain, has turned to favour the buyer. Getting a mortgage to buy for the first time may have become a little more difficult, but for those of us lucky enough to have amassed some disposable income the market suddenly looks altogether more favourable.

Although house prices have fallen in Canada – just as has happened everywhere – the fall has been markedly less steep than elsewhere, particularly just south of the border in the US. In the past year, the Canadian real estate market has seen a drop in prices to the tune of 8.9%, and sales themselves have fallen month-on-month. But despite the more troubled market, Canadian banks continue, thanks to judicious management, to make mortgages available to those looking to buy a house. Set against the open panic in the States, where once it was too easy to get a mortgage and now has become a quest on a par with the search for the Holy Grail, this is resulting in a far more serene market in Canada.

Indeed, in some cities it is believed that the market is bottoming out in Ca nada, and ready to at least stabilize if not yet commence an upward climb. While prices have fallen, senior analysts are making the point that even if they continue to fall, the rate at which they are falling has slowed, and anyone waiting for the housing market to hit rock bottom so that they can jump on board will have a long and forlorn wait. As more potential buyers realize this, it is likely that we will see the numbers of sales starting to rise again. If, however, the strong employment numbers nationally take a hit, then the market could yet have austere days ahead of it.

The moral here certainly seems to be that sensible and realistic management of the banking and lending system is equipping Canada to see out the current global crisis in much finer fettle than many of its more storied counterparts. It could just be the case that Canada becomes a model for the other nations to follow.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Feb 15, 2009.