I found this interesting post on Canadian Money Forum offering useful tips on safe deposit boxes and home safes. I’m reproducing it below with the permission of the author of the post (thanks George):
- The cost of renting a safe deposit box may be tax-deductible until the end of 2013 (see note below). You need to use the box to manage your investments (i.e. as a place to store a stock certificate or savings bond) in order for it to legitimately qualify as a deduction.
- Home safes face three major threats: fire damage, water damage, and theft. Unless you spend a LOT of money, it’s very difficult to find a safe that has a high amount of protection against all three threats.
- Many “fire boxes” are good against fire but not against a thief, since the thief could just take the whole thing and crowbar it open later.
- Many good-quality safes can be bolted to the floor and are difficult to break into, but provide limited protection in the event of a fire.
- A tubular floor safe provides extremely good protection against both fire and theft, but must be installed directly into concrete in a basement and can be vulnerable to flood damage.
- Fire-proof boxes are generally designed to keep internal temperatures low enough so that papers won’t burn. Computer discs and hard drives will be destroyed at a much lower temperature. If you’re planning to store any sort of computer media, make sure you get a safe/box that is rated for that type of use, or just put the drive/disc in a safe-deposit box, where fires aren’t a big concern since banks are protected by sprinkler systems.
- One last thought – items that require last-minute access should NOT be stored in a safe-deposit box if possible, because you’ll only have access to them when the bank is open. Examples of items that are better stored in a home safe: Wills and funeral arrangements, passports.
Note: In Budget 2013, Finance Minister Jim Flaherty proposed that the cost of renting a safe deposit box will become non-deductible for income tax purposes. Therefore, starting in 2014, you will no longer be able to deduct the cost of renting a safe deposit box.
