Happy holidays from the busy squirrels at Oaken!
It has been a year full of milestones for us here at Oaken—and a very busy one, too. From opening new stores to enhancing our online offering, we’ve worked hard to bring you the very best in convenient and friendly savings. We’re proud of our efforts, and we hope they’ve made a difference for you!
We’ll be working hard during the holiday season, but like many people we’ll be taking some time off too. Please keep in mind that our contact centre will be open until 1:00pm ET on December 24 and 31, and our locations will be open until 1:00pm local time on those days as well. We’ll be closed all day on December 25, 28 and January 1.
Finally, and most importantly, we’d like to send out season’s greetings to all our customers and friends. So happy holidays and best wishes for 2016, from all of us here at Oaken! We look forward to serving you and helping you achieve your financial goals in 2016.
TFSA roll back
As we reported in our Oaken Blog a few weeks ago, the new federal government has carried through on its campaign promise to reduce the annual TFSA contribution limit. On December 7, the Finance Minister announced that the $10,000 maximum will be reduced to $5,500, effective January 1, 2016.
So what does this mean for you? If you have maximized your contributions since TFSAs were first established, you will only be able to contribute up to $5,500 next year. On the other hand, if you still have existing contribution room available, you will be able to add that to the $5,500 limit for 2016. You’ll still also be able to take advantage of this year’s additional $4,500 contribution room for future TFSA investments, as the limit of $10,000 for 2015 will remain in effect.
To give an example, let’s say that you maximized your contributions for every year except for 2015, when you only added $3,000 to your account. You would then have $7,000 in unused contribution room (the $10,000 limit for 2015, less your $3,000 contribution). This means that in 2016 you would be able to contribute up to $12,500—the $7,000 in unused room plus the 2016 limit.
Tax-free savings forever!
We strongly recommend maximizing your contributions to tax-sheltered programs like the TFSA. They’re a great way to save money and reduce your long-term taxes, because whatever gains you enjoy in a TFSA—from capital appreciation to dividends to interest payments—remain untaxed forever.
But if you can’t contribute the maximum in any given year, don’t worry. As noted above, unused contribution room is carried forward indefinitely. So you can always make additional contributions in future years, when you may have more income at your disposal.
Capital gains and your home—be informed
You may well be aware that capital gains on your principal residence are not subject to tax. That’s great news if your home price has risen substantially in value.
However, do you know what constitutes a “principal residence”? This is another topic we covered recently in our Oaken Blog. It’s a very important question, because if your home doesn’t meet the definition, you could be facing a hefty tax bill when the time comes for you to sell it. Here are the key rules:
- You can designate pretty much any type of dwelling as your principal residence, from detached home to cottage or even a houseboat
- You or an immediate family member must have lived in the home at some point during the year
- You have to own the property, either alone or together with someone else
You can lose this designation if you or your family do not live in it for an extended period, for example if you were to relocate somewhere else for a while. And renting a home while you’re not in it can make things even more complicated—not only might you lose the principal residence designation, you might also be deemed to have disposed of it for capital gains purposes.
For most people, this is not an issue. But if you’re not sure about the status of your home—and especially if you’re thinking of selling it—check the Canada Revenue Agency website for everything you need to know. It could save you a bundle!
Our website is fresher than ever
We’re very proud of our website, especially because of its ease of use and clean, fresh look. And we recently made some changes that make it easier to use, and even fresher-looking than before.
Our “Open an account” section has now been completely redesigned to help you find the information to do business with us quickly and easily. It’s now even easier to find what you need to open an account whether online, by phone, in person or by mail. Just click on your preferred method, and you’ll find all the information you need. The online option will walk you through every step, and within a few minutes you’ll be done.
We’ve also completely refreshed the “Our locations” section. This includes addresses, maps and opening hours and pictures for each of our stores and offices. We always love to meet our customers and friends, so we encourage you to drop by for a coffee and a chat whenever you have the chance!
We’re always looking for ways to make our website and service even better too, and are grateful to receive any feedback that will help us make continuous improvements. So please feel free to provide any comments you may have at any time.
With a little extra time to spare at the holidays, we hope you’ll enjoy these articles we’ve selected for you.
- Whether you’re visiting family somewhere near home or jetting off for an exotic winter vacation, December is a big month for travel. Follow these tips for a better trip.
- Our Oaken Blog followed up on last month’s article regarding new Canada-U.S. border control measures, and is a must-read for snowbirds.
- A neat summary of the new TFSA contribution limits, plus a short video on RSPs versus TFSAs.
- Deciding between multiple properties when designating a principal residence? This article can help.