What Are The 3 Tax-Free Investments In Canada? | Experior Financial Blog
What Are The Tax-Free Investments In Canada

What Are The Tax-Free Investments In Canada?

You may be wondering what the best investment vehicles are for you to store, and build your wealth.  While it’s always good to research investments we recommend you speak with someone knowledgeable about investing like an Experior Financial Group Associate.  However for fun and informational purposes only we thought we’d put together a quick article about the 4 Tax-Free investments in Canada. 

1. Your Home or Condo

At the time this article is being written your personal residence, whether a home or condo that you have purchased is  a tax-free investment. Currently you can earn equity and then sell your home (your personal residence) without being subject to capital gains taxes. There are some whispers that the government is considering or studying placing taxes on homes over 1 million dollars however at the time this article is being written, the equity you gain when you sell your home can safely go straight into your pocket even if you aren’t buying another property or are downsizing.

2. TFSA or Tax-Free Savings Account

Introduced by the government of Canada in 2009 you can contribute $6000 for the year 2022 to a Tax-Free Savings Account without being taxed on any compounding interest your investment earns. This allows you to save for anything your heart desires over the medium and long term. Just be sure you don’t over contribute. For more information on opening a TFSA we recommend you check out this article.

3. Life Insurance

Lastly, most Canadians are unaware that Life Insurance benefits are TAX FREE. All Life insurance policies that may result in a  claim, will generate death benefits that are TAX FREE. This is a significant benefit that will provide benefits for Final Expenses, Mortgage debt reduction and income to beneficiaries. In addition benefits can be used as tax strategies to pay capital gains taxes and charitable contributions to reduce tax payable at death. Some Life insurance products like a Whole Life and Universal Life are purchased with a savings element or policy reserve. The cash values accumulate in a tax free shelter similar to a TFSA. This means that there is no taxation while the policy grows in value. Later strategies are available to withdraw those benefits in a tax efficient way. These policies are considered Tax-Free and Tax Efficient Investments in Canada. Your beneficiaries will thank you for it.

It is best not to name your estate as the beneficiary as the estate will be taxed.

Investing With The Help Of An Experior Associate

While these are currently the only 3 tax-free Investments in Canada it doesn’t mean that other investments aren’t worth considering. Indeed there are many worthwhile investment vehicles that will help you reach your goals. In fact some of the best investments still come with the ever dreaded capital gains tax. Is it worth it?  In most cases where you have an advisor to help you choose wisely and someone to manage your investments then it absolutely is.  

Instead of dreaming about a lottery win we recommend you speak to an Experior Financial Group Associate and start putting your goals and dreams for retirement into a solid plan that will get your finances on the right track so that your dreams can become a reality with or without a golden ticket. Starting today, you can speak with one of our Expert Financial  Associates who will walk you through a thorough Financial Needs Analysis and together you can set your goals in action! Don’t delay, start investing today!

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