Love that low loonie: your U.S. home is a piggy bank in 2016
 April 3 2016     Posted by

Love that low loonie: your U.S. home is a piggy bank in 2016

There’s a silver lining to the low loonie this year if you happen to own a home south of the border. A few years ago, a wave of smart Canadians took advantage of a strong loonie and low U.S. home prices – and picked up some American real estate. This year, those homes are as good as a piggy bank now that the loonie has dropped.

Why? If you refinance your U.S. home, you can bring those U.S. dollars back to Canada at the current exchange rate. That powerful U.S. dollar is your financial friend, and we don’t know how long it will last. You could use the money to pay off any debts in Canada – or even use the proceeds to purchase another Canadian property. The goal is to get those U.S. dollars back over the border to Canada.

By the way, selling the home triggers capital gains. Refinancing does not.  Any income you generate by exchanging your dollars doesn’t count as capital gains, so you don’t pay tax when you exchange your US dollars for Canadian dollars. You also get to keep your vacation property.

Many Canadian owners of U.S. homes rent out the property when they’re not using it – giving them rental income to maintain the home and pay down the mortgage.

Most property values have rebounded well from their lows; so many owners are also taking advantage of the growth in their U.S. home equity. A U.S. bank will typically lend 60% of the appraised value of a property.

If you own a home in the U.S., let’s chat. We have an excellent relationship with a U.S. lender. It won’t last forever, but this is your chance to love that low loonie. It’s created an unusual opportunity for Canadians with U.S. property. Schedule a free, no obligation review of your situation and take a look at giving your wealth-building a boost in 2016!