If you rely on media coverage during the money season for an appreciation of the value of real estate ownership, you might be misled into believing that, while a house or condominium is useful as a place to keep your stuff, real estate carries little significant tax benefit. In reality, real estate offers more tax advantages than other classes of investment, particularly for home owners.

As the annual RRSP frenzy descends on Canada, even ever-popular discussions of the weather take a back seat to talk of Registered Retirement Savings Plans until the contribution deadline March 1. The yearly financial hype-fest then broadens to include more income-tax issues and rages on until the return-filing deadline April 30. In May, spring inspires a renewed interest in gardening and real estate.

Home buyers are often ignorant of these financial benefits, or overlook their significance, when deciding how much to invest and where. Developers, builders and real estate brokers place the emphasis on floor plans, mortgage rates and decor. Television, with its make-over madness, and other media as well, reinforce a home buying perspective that places investment far down the "must have" buying list.

Yet, real estate is the single largest financial investment most Canadians make, even though the selection process for residential property seems to emphasize esthetics over asset management. Consumers would benefit from a deeper understanding of how their home, cottage and income properties can become a significant active partner in their future. According to a TD Economics' estimate, "more than 70 per cent of Canadian families are currently homeowners. The total value of residences exceeds C$1 trillion and land and housing together account for one-third of all personal assets. Given this importance, the future value of a home should be included in the financial plans of Canadians."

If you are considering the purchase of a home -- new or resale, any type of ownership or design -- be aware that all profit made on this investment will be tax free if it's your principal residence. Buy smart, renovate for added value, add on market appreciation, and sell well, and all that profit or capital gain is yours -- unlike the money made on stocks and bonds. According to the Canada Revenue Agency, if the real estate was your principal residence for every year you owned it, you don't even have to report the sale on your tax return.

Market and economy fluctuations can affect the amount of profit, but real estate has the added advantage of being a live-in investment, so one must add this cost-reducing advantage into the calculation.

Home ownership carries additional financial benefits as the selected highlights below illustrate:

• Special government savings and rebates For example, rebate of part of the GST or HST paid on a new owner-built or builder constructed residence, including condominiums, a substantially renovated house, a modular/mobile home or a floating home. For co-operatives, shares in the capital stock of the co-op, which represent the equivalent of ownership, are eligible. New residential rental property also qualifies.

• Tax-free access to RRSP funds The Home Buyers' Plan (HBP) allows tax-free withdrawal of up to C$20,000 from your RRSP to buy a qualifying home, provided the amount is gradually repaid over 15 years. The property may be bought or built for yourself or a related person with a disability. When multiple buyers purchase a property, each may withdraw up to C$20,000 under the HBP. Funds may be withdrawn under the Lifelong Learning Plan at the same time.

• Income generation using real estate Renting out all or part of your home generates rental income, which can be offset by allowable expenses. Principal residence status may not be affected by rental activity if rules of timing and depreciation are followed.

• Home-based business head quarters Working at home, telecommuting, or operating a home-based business allows certain expenses to be claimed against income, including a proportionate share of mortgage interest.

• Related tax credits In Manitoba and Ontario, provincial Property Tax Credits may reduce the amount of income tax due.

Search out the full range of opportunities related to home ownership, many of them presented in the +400 articles of this column on Decisions & Communities. Obviously, before you act on any financial benefit, investigate the qualification criteria, locate the correct forms and ask many questions of your financial advisor or the Canada Revenue Agency staff. For instance, to qualify for the GST rebate, the fair market value of the house and land must be less than C$450,000.

While you're pondering ways to gain the greatest benefit from RRSPs and on your income tax return, go a step further and consider how to use the financial advantages of home ownership to your benefit -- now and in the future.

Published: February 13, 2007

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Futurist and Strategist PJ Wade is "The Catalyst" -- intent on "Challenging The Best Become Even Better." PJ earned this title by translating the dynamic impact of Boomers and their multi-generation families into relevant insights that start people thinking and taking action—in business and in life. Author of 7 books and more than 1600 published articles, PJ encourages individuals to become their own futurist. PJ writes and speaks about the insight, knowledge and solid decision-making skills that professionals and their clients need to live and work in this vortex of change. For instance, since PJ knows that home is headquarters for the new decades-long "unretirement," she wrote the popular book "Reverse Mortgages: Best Friend, Worst Enemy... Your Choice! (CatapultPublishing.com), which is filled with suggestions and insight on protecting and using home equity. Her new business book, "What's Your Point?," which identifies 7 common mistakes professionals unknowingly repeat to their detriment, will be published in 2009. As The Catalyst, PJ provides strategic communication, client appreciation and advanced education services to the financial, tourism, lifestyle and service sectors -- and the clients they serve. A frequently-quoted financial and business commentator, PJ is a thought-provoking strategic speaker who offers practical, real-life suggestions on leaving "the box" behind and embracing Forward Thinking -- a talent she regularly demonstrates in this column. For more on blogs, books and topics, visit TheCatalyst.com.