Unlock the Power of Canada’s Registered Accounts and Invest Smarter with Equiton

Published On: January 29, 2025 Categories: Insights

Registered accounts are powerful tools for Canadians to save, grow, and manage their wealth while enjoying a range of benefits and tax advantages. Understanding the variety of registered accounts available can help you make informed decisions about your financial future. Let’s explore the key types of registered accounts in Canada—what they are, how they work, and their key benefits—and how you can use them to invest in private real estate through Equiton.

What is Private Real Estate, and Why Invest in It?

Private real estate investing, including Real Estate Investment Trusts (REITs), allows individuals to invest in high-quality real estate assets without owning physical properties directly. Unlike publicly traded REITs, private real estate investments are not tied to the fluctuations of the stock market, providing a historically stable and consistent alternative for portfolio diversification. These investments generate passive income through rental revenue and offer inflation protection, as property values and rents typically rise with inflation.

By investing in private real estate through registered accounts, Canadians can maximize the tax advantages of these accounts while benefiting from the growth and income opportunities that real estate provides. This combination of diversification, historical stability, and growth potential makes private real estate a smart option for building wealth over time.

Now, let’s explore the key types of registered accounts in Canada and how you can use them to invest in private real estate through Equiton.

Registered Retirement Savings Plan (RRSP)

The RRSP is one of Canada’s most popular savings accounts for retirement. Contributions to an RRSP are tax-deductible, meaning you can reduce your taxable income while growing your investments tax-deferred until withdrawal. The contribution limit for an RRSP is 18% of your previous year’s income, up to a maximum set annually by the government. For the 2024 tax year, the contribution maximum is $31,560. Contributions are tax-deferred, and taxes are only paid when you withdraw funds, typically in retirement when your income is lower.

You can use an RRSP to invest for retirement with a diversified portfolio, including mutual funds, stocks, and certain private real estate investments. Additionally, programs like the Home Buyers’ Plan (HBP) or Lifelong Learning Plan (LLP) allow you to borrow funds from your RRSP for specific purposes like buying your first home or continuing education.

Key Benefits:

Annual tax savings through deductible contributions

Long-term tax-deferred growth

Tax-Free Savings Account (TFSA)

The TFSA is a flexible, tax-advantaged account that allows you to grow your investments tax-free. Unlike the RRSP, contributions to a TFSA are not tax-deductible, but withdrawals, including investment income, are tax-free. The annual contribution limit for a TFSA is $7,000 for 2025, bringing the total available room to $102,000 for those born before 1991 as any unused room is carried forward into the next calendar year. There are no restrictions on withdrawals, which can be made at any time, making it an ideal account for both short- and long-term investment goals. The contribution room from any withdrawals will be added back to your account on January 1 of the following calendar year.

You can use a TFSA to save for goals such as buying a home or retirement. Investing in diverse assets, including private real estate, can help maximize your tax-free growth.

Key Benefits:

Tax-free withdrawals and investment earnings

Unused contribution room does not expire and carries forward to future years

Registered Education Savings Plan (RESP)

The RESP is designed to help families save for their children’s post-secondary education. Contributions to an RESP grow tax-free, and the government matches contributions through the Canada Education Savings Grant (CESG). This grant is 20% of your annual personal contributions up to $500 per year and has a lifetime limit of $7,200 per beneficiary. Taxable withdrawals apply only to earnings, not contributions, when funds are used for education.

To make the most of your RESP, it is important to contribute regularly to take full advantage of the CESG matching.

Key Benefits:

Boosting your education savings with government grants

Enjoying tax-efficient growth for education costs

Registered Retirement Income Fund (RRIF)

The RRIF is a continuation of your RRSP. Once you retire or turn 71, you are required to convert your RRSP into a RRIF or an annuity to start drawing income. The RRIF requires mandatory minimum withdrawals based on your age, and investments within the account continue to grow tax-deferred.

You can use a RRIF to plan withdrawals strategically and minimize taxes. Continuing to invest in private real estate within your RRIF can generate income and preserve capital.

Key Benefits:

Ongoing tax-deferred growth into retirement

Flexibility in managing your retirement income

Locked-In Retirement Account (LIRA)

If you’ve ever left a job and had a company pension, you’ve likely encountered a LIRA. A LIRA, or Locked-In Retirement Account, is where your pension funds usually go when you leave an employer. The funds are “locked in,” meaning you can’t access them until you’re ready to retire or meet special conditions. In most provinces, you must be 55 years of age to unlock your LIRA. Essentially, the money is preserved for your future, but that doesn’t mean it has to sit idle.

This account can be a powerful tool to grow your wealth through investments like private real estate. Investing in private real estate can offer the potential for long-term stability and portfolio diversification, giving you more control over how your retirement savings are working for you. Plus, the growth remains tax-deferred, ensuring your savings continue to grow efficiently until it’s time to convert your LIRA into a Life Income Fund (LIF).

When you leave a job, think of your LIRA as an opportunity—an account that ensures your hard-earned pension savings are preserved, but one that can also be actively invested to secure your financial future.

Key Benefits:

More control of your pension savings after you leave your employer or retire

The ability to hold various investment products for long-term, tax deferred growth

Registered Disability Savings Plan (RDSP)

The RDSP is designed to help Canadians with disabilities and their families save for the long term. Government grants and bonds are available to eligible contributors. The government provides matching grants of up to $70,000 and bonds of up to $20,000, depending on family income and contributions. Contributions are not included as income to the beneficiary when paid out of the RDSP, however, the government grants and bonds, as well as the investment income earned in the plan will be included in the beneficiary’s income.

To maximize the benefits of an RDSP, it is important to contribute regularly and take full advantage of the government support. Investments, including private real estate, which has provided historically stable, long-term growth.

Key Benefits:

Significant government grants for eligible individuals

Tax-efficient growth to secure financial well-being

How Equiton Fits into Your Registered Account Strategy

At Equiton, we specialize in private real estate investing, offering Canadians the opportunity to diversify their portfolios with high-quality assets. Equiton’s offerings are all eligible for RRSPs, TFSAs, RESPs, RRIFs, LIRAs, RDSPs, and more. You can open a new registered account through Equiton or transfer an existing account to start investing in private real estate.

Private real estate offers numerous advantages, including potential portfolio diversification to reduce reliance on stock market performance, generating passive income through rental properties, and maximizing the benefits of your registered accounts by growing wealth within a tax-advantaged structure.

Our team of investment specialists will work closely with you to understand your unique financial goals, time horizon, and concentration of wealth. Based on this, they’ll recommend solutions that are suitable and best align with your needs, ensuring you have the right tools to achieve your objectives. Whether you’re opening a new registered account or transferring an existing one, we’re here to guide you every step of the way.

Enhance Your Registered Accounts with Private Real Estate Investments

Registered accounts in Canada provide a wide range of options to invest for retirement, education, or future goals while enjoying significant tax advantages. By incorporating private real estate investments into these accounts, you can further diversify your portfolio and unlock additional growth potential. At Equiton, we’re here to help you make the most of your registered accounts and achieve your financial aspirations.

Ready to get started? Contact us today to learn more about how private real estate investing can work for you: inquiries@equiton.com