The Canada Customs and Revenue Agency (That's the new name for Revenue Canada. Catchy, eh?) allows Canadian homeowners to earn tax-free profit on their home or principal residence. This tax bonus should attract homebuyers to houses and condominiums that are most likely to increase in value. However, many Canadians get caught up in the frenzy of home buying and forget the tax-free capital gains opportunity linked to home ownership. (That's why I mention it as often as possible here!)

You've heard the "Buy the best location you can afford" rule for home buying but did you keep it in mind when you were house shopping? The most expensive house on a street or in a neighbourhood usually has it's value suppressed by the lesser homes near it. Move that top-of-the-line house to a street where it is one of the nice houses not the nicest and it would probably bring a higher sale price.

Buy the least house on a street or one in the mid-value range and your home may be bumped up in value as the high-end homeowners continue to up-grade their castles.

This approach to buying may also be coupled with the "buy in moderation" strategy discussed in an earlier "Have Your Home and Money Too" article.

A Calgary, Alberta, petroleum engineer, who started her own oil and gas company at age 30, and her fiance did not want a home that would dominate their lives.

"We wanted a house of moderate size where we could do some entertaining. We could have easily afforded a million-dollar home but I don't think we could have been comfortable with anything over $500,000," she said. The couple, who both work downtown, settled on a 1300-square-foot, 1940's bungalow in Calgary's exclusive Mount Royal neighbourhood.

They paid the $328,000 in cash since their goal was to keep monthly expenses to a minimum. She accumulated the capital over 12 years as a consulting engineer and from the sale of her first home, a duplex that helped pay for itself. They feel buying at the low end in the best location ensured their home will appreciate in value.

"This house is a really nice diversification of my investments. It may not be an aggressive investment. It was a matter of getting money out of the stock market and (out of) oil and gas. We have a fixed tangible asset and a home.

"I think there is no one right way to do this. Everybody has to find out what is right for them. You just have to be ready to get in there and do something."

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