Buying a Home

First-Time Home Buyers’ Tax Credit

Jan 9th

Posted by EC in Buying a Home

No comments

Program

First-time home buyers may be eligible for a 15 per-cent income tax credit
for closing costs.

Details

  • To assist first-time home buyers with the costs related to the purchase of a home.
  • The First-Time Home Buyers’ Credit (FTHBC) provides a 15 percent credit on a maximum of $5,000 of home purchase costs (e.g. legal fees, land transfer taxes, etc.), meaning maximum tax relief of $750.
  • Applicable to first-time buyers purchasing a home closing after January 27, 2009.
  • The FTHBC is claimable for the taxation year in which the home is acquired.
  • An individual will be considered a first-time home buyer if neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the calendar year of the home purchase or in any of the four preceding calendar years.

For more information contact us today: 416-648-4080 or visit www.fin.gc.ca

VN:F [1.8.4_1055]
Rating: 5.0/5 (1 vote cast)
, ,

GST New Housing Rebate

Jan 9th

Posted by EC in Buying a Home

No comments

Program

You may be eligible to claim a rebate for a part of the GST you pay on the purchase price or cost of building your home if:

  • you buy a new or substantially renovated home (including the land or if you lease the land) from a builder
  • you buy a new mobile home (including a modular home) or a floating home from a builder or vendor
  • you buy a share of capital stock of a co-operative housing corporation
  • you construct or substantially renovate your own home, or carry out
    a major addition (or hire another person to do so) or
  • your home is destroyed in a fire and is subsequently rebuilt.

Details

  • Resale homes are exempt from the GST.
  • New homes are subject to the GST. New home buyers can apply for a 36% rebate of the GST applicable to the purchase price to a maximum of $6,300 for homes costing $350,000 or less before GST.
  • For new homes priced between $350,000 and $450,000 before GST, the GST rebate would be reduced proportionately.
  • New homes priced $450,000 before GST or higher would not receive a rebate.

NOTE: In the Greater Toronto Area, most builders include the GST in the price of the house, and any rebate would be assignable to the builder as they would be absorbing the net GST cost.

VN:F [1.8.4_1055]
Rating: 5.0/5 (1 vote cast)
, ,

Additional Costs When Buying a Home

Jan 9th

Posted by EC in Buying a Home

No comments

The purchase price of your home is only one of the costs you’ll encounter. Here are other possible costs you need to consider:

  • Mortgage loan insurance: If you are putting less than 20 per cent of the house value down, you’re going to need mortgage loan insurance. Depending on the lender, the premium can be added to mortgage payments.
  • Appraisal fee: Lenders typically loan a percentage of the home’s purchase price or the market appraisal of the property. Cost depends on the size and complexity of the assignment.
  • Land survey: The lender may ask for a current survey or certificate of location before signing off on the loan. There can be a substantial cost for having a new survey done on the property.
  • Deposit: A deposit normally goes with the formal offer to purchase.
  • Insurance: The lender will require proof of property insurance for the replacement value of the house and its contents from the day you take ownership.
  • Title insurance: Provides coverage in case of problems with the property title among other things. The cost is relatively low, usually a few hundred dollars.
  • Application fee: Some lenders will pass on the cost to process your application. These fees vary and some lenders will waive entirely if you have other accounts with them.
  • Mortgage broker’s fee: If you use a mortgage broker, a fee may be charged to arrange a mortgage on your behalf.
  • Home inspection fee: An inspection protects the buyer by revealing any problems in the property that you’d want to know before you move in.
  • Legal fees: You can save some of the legal fees usually charged by the lender if your lawyer draws up the mortgage. You’ll also pay for disbursements which are the costs involved in drawing up the title deed, conducting a title search, and preparing and registering the mortgage.
  • Land Transfer Tax: Use the land transfer tax calculator to calculate both your Ontario and City of Toronto (if applicable) land transfer taxes. First time home buyers qualify for a maximum $2,000 (LTT on a $227,500 home) provincial rebate and a maximum $3,725 (LTT on a $400,000 home) City of Toronto rebate.
  • Goods and Services Tax: Resale (used) homes are exempt from GST but it does apply to newly constructed homes and may qualify for a partial rebate depending on the sales price and if the home is going to be your primary place of residence.
  • For new homes costing $350,000 or less, you will receive a GST rebate of 36% of the GST paid to a maximum of $8,750. The rebate for new homes costing between $350,000 and $450,000 declines to zero on a proportional basis. GST also applies to most of the services provided in completing the real estate transaction.
  • Other costs: These include moving costs, fees charged by utilities for service hook-ups, property tax and other adjustments (an adjustment takes place when the seller has already paid for something in advance and wants to be credited for the unused portion on the date the house becomes yours), and ongoing maintenance (condo fees etc) and utility costs.
VN:F [1.8.4_1055]
Rating: 5.0/5 (1 vote cast)
,

GTA Resale Market Resilient in 2009

Jan 9th

Posted by EC in Buying a Home

No comments

Greater Toronto REALTORS® reported 87,308 MLS® transactions in 2009 – a 17 per cent increase over 2008. This result included 5,541 sales in December. The 2009 result was in line with the healthy levels of sales experienced between 2004 and 2006, but lower than the record of 93,193 set in 2007.

Download Full Report: December Resale Housing Market Figures

VN:F [1.8.4_1055]
Rating: 0.0/5 (0 votes cast)
, ,

Home for the Holidays

Dec 23rd

Posted by EC in Buying a Home

No comments

81d70a3c-0722-4645-886f-33df3970b041While everyone else is hanging up the mistletoe, or lighting the menorah, why shouldn’t you be scooping up all the great deals in real estate during the Holiday “break”? Realtors don’t really ever take breaks, and all the great conditions for buying a home remain the same despite the date on the calendar: Low interest rates, rising inventory of homes on the market, and relatively low house prices. In fact, house deals could be even more plentiful during the holiday season.

All you will be missing is competition – from other people looking to buy (or sell). No bidding wars for you; just nice, quiet walk-throughs of homes trimmed for the holidays, which, granted, may be a tad messier than home showings at other times of the year. Working some house viewings into your holiday schedule just might be your best chance to get your dream home for an affordable price, and certainly you’ll get it bought with less pressure/stress. Not only are other home buyers preoccupied with the holidays, the cold weather also can act as a deterrent for trudging out to see homes.

Other reasons to buy property during the holiday season:

  • A seller who’s showing their home at this time of year is likely to be more motivated to sell than the average person, hence more flexible with the selling price.
  • As realtors are less busy, you will likely get more personal attention, faster service than during peak buying/selling times. Realtors may also be more likely to take lower offers seriously.
  • Who knows what the interest rates will be in the new year?
  • Who knows how tight banks and other institutions will be with loans next year?
  • Other service providers in the real estate industry – appraisers, home inspectors, title searchers, etc. – are less busy during the holiday season so you could get faster responses there, too.

So, why not put aside the baking and decorating for a few hours; go look at some homes and consider making an offer between now and the end of 2009 … you won’t get this chance again for another whole year. Have you ever bought, or sold, a home during the holiday season? How did it go for you? Leave your comments below.

VN:F [1.8.4_1055]
Rating: 5.0/5 (1 vote cast)
, ,

The HST is Coming

Dec 23rd

Posted by EC in Buying a Home

No comments

In Ontario

Last month, the Government of Ontario formally launched its latest assault on homeowners, purchasers and sellers with the introduction of legislation to harmonize the provincial sales tax and goods and services tax.

Home buyers and sellers will pay 8%  more on legal fees, appraisals, real estate commissions, home inspection fees, and moving costs, adding about $1,500 in new taxes to the average residential real estate transaction in Ontario.

For people already owning homes, the HST will also add hundreds of dollars in additional tax on utility bills (gas, electricity and home heating fuel), on home renovation labour, the cost of lawn upkeep, landscaping, and the cost of snow removal.

Please help Ontario realtors fight this tax. In less than 30 seconds, you can send an email to your MPP asking them to vote against sales tax harmonization legislation.

In British Columbia

Next July, British Columbia will implement the HST. This is a combining of the GST of 5% and the PST of 7%, bringing us up to a 12% sales tax throughout the province. While it is fairly complex, in a nutshell it means that many goods and services to which PST does not currently apply, will suddenly carry the additional tax.

For home buyers, it is still uncertain exactly how it will affect prices as builders, developers and realtors are still lobbying to have the current exemptions adjusted for inflation, so that they conform better to British Columbia’s high average house prices.

Right now we know the rates are good, and we know there are some amazing deals to be had, especially on new properties that were begun in a busier market and recently completed in a slower market. What we don’t know is what the rates will be in 6 months, what the government will decide to do about the HST exemptions, and what the inventory of properties will look like next year.

So, if you have been on the fence about buying a property, now is a great time to take advantage of some excellent opportunities.

VN:F [1.8.4_1055]
Rating: 5.0/5 (1 vote cast)
, , ,

Emerging Toronto Neighbourhoods

Nov 28th

Posted by EC in Buying a Home

No comments

During the first two weeks of November 3,666 homes changed hands in the Greater Toronto Area, an increase of 84% compared to the same period a year ago. Prices are on the rise as well. The average price of a GTA home is currently $415,066, up 10% year-over-year.

While buying a home in Toronto might seem daunting, particularly to first-time homebuyers, the city does have areas that remain financially accessible and choosing the right one can net substantial long-term gains.

Spotting the next Cabbagetown, Leslieville or Distillery District before it develops a cachet can be a fairly straightforward process. The key is to look for common characteristics that have contributed to the gentrification of neighbourhoods throughout the city.

Neighbourhoods situated along Yonge Street throughout Toronto for example, have netted strong returns on investment due to their proximity to the subway line. Accessibility to transit is one key characteristic to consider.

Another important factor to note is proximity to urban amenities like parks and beaches. Note the explosion of house values in the Beaches throughout the past two decades as an example.

The waterfront is certainly one favourable characteristic of the Multiple Listing Service district known to real estate agents as W06, which is located from the Etobicoke Creek to East of Royal York Road and South of the Queen Elizabeth Way to the waterfront.

It’s also important to look for neighbourhoods surrounded by areas that have already experienced improvements, as gentrification is likely to spill over into them. Given that W06 contains single detached homes selling for at least 10% less than the GTA average, and is adjacent to districts with above-average selling prices, there’s no doubt that it’s ripe for gentrification.

Similar opportunities exist east of central Toronto as well, in districts like E04 and E06 in the East and North-East Danforth areas.

If the opportunity to snap up a great deal and in an up-and-coming neighbourhood appeals to you, you’re not alone. In fact, a study released in 2008 by the University of Toronto’s Cente for Urban and Community Studies found that 16.4% of neighbourhoods in the City of Toronto have experienced some form of gentrification. Furthermore, when neighbourhoods built before World War II were isolated in this study, it found a remarkable 39.2% have experienced gentrification.

Buying in an emerging area requires careful consideration though. As a first step, walk the streets of the neighbourhood to get a true sense of the local culture. Try to identify areas that are being snapped up by homebuyers committed to the neighbourhood’s future rather than simply by investors.

Remember as well that neighbourhoods in transition are just that; their evolution may take many years so it’s important to really enjoy the area in its current form. Emerging areas might not immediately, feature your favourite shops for example, however; change in the commercial landscape is another sure sign that gentrification is underway.

To learn more about the many opportunities that exist in neighbourhoods throughout the GTA talk to a Greater Toronto real estate agent and visit www.TorontoRealEstateBoard.com for neighbourhood profiles, market updates and much more.

VN:F [1.8.4_1055]
Rating: 5.0/5 (1 vote cast)
, ,

The Realtor’s Image

Nov 27th

Posted by EC in Buying a Home

No comments

image1The public’s perception of real estate sales representatives might be better than that of, say, a lawyer – but could the realtor’s image use some more polishing?

Ken MacKenzie, the former head of the Fraser Valley Real Estate Board recently told REM Magazine what he thinks should be the focus for realtors in the near future: “The emphasis will be on… ethics and professionalism and promoting the image of realtors.”

Finding an ethical real estate sale agent – one who willl truly listen to the buyer or seller’s needs  – isn’t that hard… but changing the stereotype of self-serving salesperson might be a bit tougher.

Benefits to using a Realtor

In reality, realtors are hard-working professionals, says Sophie Wagner at Century 21 Immo-Plus in Montreal, in her blog post, “136 Things that a REALTOR Does” for a client.

To be sure your realtor is working for you, when you are buying a home, you are best served by getting a buyer’s agent, whose commission is paid by the seller. The buyer’s agent helps you find suitable listings, set up showings, offer counsel throughout, and represent your interests.

Get educated and understand what you’re doing. Get a buyer agency agreement that sets it out as accurately as possible. Will it be perfect? Likely not, but it will probably be better than the verbal agreement. 

The Canadian real estate profession has worked to put its stamp of professionalism out there for you to see easily – such as the trademark REALTOR® that identifies only those real estate professionals who are members of the Canadian Real Estate Association. The CREA has established a mandatory federal licensing program for real estate practitioners, who are required to follow a strict code of ethics.

What has been your experience dealing with realtors? Leave your comments here.

VN:F [1.8.4_1055]
Rating: 4.0/5 (1 vote cast)
, , ,