Ottawa versus Gatineau

To Live or Not to Live in Gatineau: This IS the question and here is my point of view:

Ottawa Assumptions:
House Price: $250,000
Interest Rate: 5.5%
Amortization: 25 Years
Down Payment: 10 %Employee’s Salary: $40,000 and $65,000

Lower Personal Income Taxes:
At a $40,000 salary, the Ottawa resident will pay approximately $1662 less on their 2008 income tax (Federal and Provincial) than a Gatineau resident. At $65,000 salary, the Ottawa resident will pay approximately $3439 less on their income tax respectively.

Weaker Purchasing Power:
The Ottawa resident who earns $40,000 per year will pay $4284.96 annually more in mortgage payments on their $250,000 Ottawa house than the annual mortgage payment on a comparable home in Gatineau.

Gatineau Assumptions:
Comparable Property Price: $185,000.
**Other Assumptions remain unchanged**
 
Higher Personal Income Taxes:
At a $40,000 salary, The Gatineau resident will pay approximately $1662 more on their 2008 income tax (Federal and Provincial) than their Ottawa neighbour. At a $65,000 salary, the Gatineau resident will pay approximately $3439 more in their income tax.

Stronger Purchasing Power:
The Gatineau buyer who earns $40,000 will save $2662.96 annually more in mortgage payments on their $185,000 Gatineau comparable home. At $65,000 salary, they will save $845.96 annually.

Other Benefits:
1. As long as the widening gap between Ottawa and Gatineau prices remains intact then a purchasing advantage exists to offset the tax burden.

2. Ottawa property tax hikes are being phased in during 2009 and is expected to hit many areas in that city hard…just when people are finding Ottawa home prices high enough!

3. The child care system in Quebec costs between a mere $5 and $7 per day compared to Ottawa’s approximately “yikes!” $40 per day!
   
4. Your purchasing power in Gatineau equalizes or outweighs the higher Quebec personal income tax affect as discussed in this article depending on your salary.

5. Quebec auto insurance is more affordable than Ontario. I have all the specs, so give me a call and I would be pleased to share.

6. Employment levels in Ottawa, have consistently outperformed Ontario average since 1999, therefore residents in Gatineau benefit from this region’s stable unemployment market. As of March 13th 2009, unemployment rates were 5.8% in Gatineau and 4.1% in Ottawa. These numbers are healthier than the nation’s total unemployment rate of 7.7%. (Stats Canada).

The Bottom Line:
The answer depends on the approach the individual will be taking. In light of the benefits provided to Outaouais residents, it’s no wonder I receive a high volume of calls discussing this subject and have noticed an increased migration to Gatineau for the lifestyles and benefits afforded.

Population Update:   260,000, that is 26,000 since the almagamation of Gatineau in 2002. Just last year in 2010, a 6371 new citizens joined the population, a change 2.5%. Interestingly, Cantley had the highest jump of 4% increase in their population which now stands at 9424 inhabitants.

(see your financial advisor or accountant on specific tax matters).

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