Looks like after months of debate and searching for alternatives our elected city counilors voted to endorse two controversial new taxes – one on land transfers and the other on vehicle registrations. Now in Toronto, all home buyers need to pay an Ontario tax, plus an additional Toronto Land Transfer Tax. Here is the Toronto tax on a $450,000 home as an example:
$0 to $55,000 is .5% = $275
$55,000 to $400,000 is 1% = $1,950
above $400,000 is 2% = $1,000
Total Toronto land transfer tax = $4,725
An important note is that first time buyers do not pay the Toronto Tax on the first $400,000. Councillors adopted a so-called compromised version which exempts first-time home buyers from paying anything on the first $400,000 of a new or re-sale home. This seems to indicate that Toronto is looking to tax people who are buying their second home (ie. moving up or downsizing). It looks like Toronto is trying to get their hands on the increase in value that has come over the last 7 years.
The tax will take effect on February 1, 2008, and not on January 1, 2008, as originally proposed. Purchasers with a signed Purchase and Sale Agreement entered into before December 31, 2007, will pay the tax, but will receive a full rebate of the tax regardless of whether or not they close after February 1, 2008. Purchasers with a signed Purchase and Sale Agreement signed after December 31, 2007, with a closing date before February 1, 2008, will not be required to pay the tax.
Here are the tax rates for clarification.
the first $0 - $55,000 of property value has a tax rate of 0.5%
the next $55,000 - $400,000 has a tax rate of 1%
beyond $400,000 the tax rate is 2% for 1 and/or 2 single family residences. If the land is commercial (including multi-residential) then the rate is 1.5% up to $40 Million.
For commercial properites (including multi-residential) beyond $40 Million the rate is 1%
source:
Globe and Mail, EFF GRAY AND JENNIFER LEWINGTON
Aird & Berlis LLP
Thursday, October 25, 2007
Wednesday, September 12, 2007
Ontario Housing Affordability Levels Off
Ontario’s housing affordability levels off, says RBC EconomicsAccording to a new-housing report recently issued by RBC Economics, Ontario’s housing market appears to have stabilized. “Healthy income gains were offset by modest house-price growth, creating very little movement in affordability across all housing classes,” says Derek Holt, Assistant Chief Economist, RBC. “Annual house-price gains continue to bounce around the three to five per cent range, as Ontario’s housing market levels off.”RBC’s Housing Affordability report for Ontario, which measures the proportion of pre-tax household income needed to service the costs of owning a home, stood at 35. 5 per cent for the benchmark detached bungalow, 41 per cent for the standard two-storey home, 29 per cent for the standard townhouse and 27 per cent for the standard condo. The condo market is the most active home segment with prices still growing in the six to 10 per cent range, spurred on by the hot Toronto market. Still seen as the most viable option for first-time homebuyers, especially in Toronto, the demand for condos will likely remain elevated for the rest of the year. New construction activity has started to slow as the market adjusts to softer demand conditions and a weaker economy. Toronto’s housing market remains one of the softest among big Canadian cities. Affordability conditions remain relatively stable at 43 per cent as the sales-to-listings ratio is balanced and annual price growth is in low single-digits. Reacting to softer conditions, the residential construction market is weakening as housing starts cooled 42 per cent in the first quarter and permits dropped 10 per cent. Condos continue to lead the Toronto market as price growth was up seven per cent compared to a year ago. “Rising mortgage rates are expected to take a bite out of Toronto’s affordability later this year, but modest price growth should help offset some of that impact,” says Holt. According to the report, Ottawa’s housing market has regained some momentum after softening through much of 2006. Like Toronto, condos also remain the most affordable option for homebuyers, requiring approximately 22 per cent of household income. Affordability levelled off as healthy income gains kept pace with rising house prices. New-home construction has tapered off and is expected to continue to decline over the rest of the year. The Housing Affordability measure, which RBC has compiled since 1985, is based on the costs of owning a detached bungalow, a reasonable property benchmark for the housing market. Alternative housing types are also presented, including a standard two-storey home, a standard townhouse and a standard condo. The higher the reading, the more costly it is to afford a home. For example, an Affordability reading of 50 per cent means that home ownership costs, including mortgage payments, utilities and property taxes, take up 50 per cent of a typical household’s monthly pre-tax income. The report also looked at mortgage carrying costs relative to incomes for a broader sampling of smaller cities across the province, including London, Kitchener, Windsor, St. Catharines, Brantford and North Bay. Many of Ontario’s smaller cities witnessed a broadly based fourth quarter affordability improvement. For these smaller cities, RBC has used a narrower measure of housing affordability that only takes mortgage payments relative to income into account. RBC’s Affordability measure for a detached bungalow for Canada’s largest cities is as follows:
Vancouver 68 per cent
Calgary, 40 per cent
Toronto, 43 per cent
Montreal, 35. 4 per cent
Ottawa 30. 5, per cent.
British Columbia: Solid income gains outstripped softer house price growth to make way for another slight improvement in housing affordability for two-storey homes. The improvement is welcome relief or many prospective homeowners attempting to tap into the already-elevated property market. Affordability of the remaining three home segments deteriorated as prices continued to move higher. The full RBC Housing Affordability report is available online at www.rbc.com/economics/market/pdf/house.pdf
Source: The Condo Guide Magazine
Thursday, September 6, 2007
Home Prices Set To Rise
The Bank of Canada has decided on a wait and see approach rather than raising rates as they had hinted a few months ago. This decision was based on the latest inflation data and the strength of the dollar. Although the worries of the sub prime US market has been circulating, it's affect in Canada has so far been minimal. Instead housing prices in Canada are expected to continue increasing due to great demand and luxury homes are leading the way.
Luxury home sales across the country have been "unprecedented" over the first seven months of this year, according to one of country’s largest real estate firms, according to Garry Marr, CanWest. "The consumer demand for luxury property has been insatiable," says Michael Polzler, executive vice-president of Re/Max Ontario-Atlantic Canada. "Unabated demand throughout the year has created tight market conditions in a number of blue chip neighbourhoods. Limited availability of product has, in turn, placed mounting pressure on housing sales."
In Toronto, August was another record breaking month vs the same time period in 2006. The 8,059 sales reported last month exceeded the previous bestperformance for August, set in 2005, by seven per cent. "With five consecutive record-breaking months, spring and summer activity was unprecedented and given the strong economic fundamentals that remain inplace, we have tremendous confidence in the autumn housing market," said Mr.Bentley.
Despite all this activity, the message to all home buyers is this: Real Estate is one of the least risk investments that people will make because you also get the benefit of being able to live in it, care for it and control the overall appeal of it when it's time to sell. But only buy the home if you think you will like living in it and the area, and you won't have any regret.
Luxury home sales across the country have been "unprecedented" over the first seven months of this year, according to one of country’s largest real estate firms, according to Garry Marr, CanWest. "The consumer demand for luxury property has been insatiable," says Michael Polzler, executive vice-president of Re/Max Ontario-Atlantic Canada. "Unabated demand throughout the year has created tight market conditions in a number of blue chip neighbourhoods. Limited availability of product has, in turn, placed mounting pressure on housing sales."
In Toronto, August was another record breaking month vs the same time period in 2006. The 8,059 sales reported last month exceeded the previous bestperformance for August, set in 2005, by seven per cent. "With five consecutive record-breaking months, spring and summer activity was unprecedented and given the strong economic fundamentals that remain inplace, we have tremendous confidence in the autumn housing market," said Mr.Bentley.
Despite all this activity, the message to all home buyers is this: Real Estate is one of the least risk investments that people will make because you also get the benefit of being able to live in it, care for it and control the overall appeal of it when it's time to sell. But only buy the home if you think you will like living in it and the area, and you won't have any regret.
Thursday, August 16, 2007
Importance of a Book's Front Cover
This statistic proves it. As Canadians, we are very superficial and we do judge a book by its cover, at least if the book is a house. It’s been often told that a tidy house does matter more than the land it sits on or the square-footage of the condo when it comes to selling. A recent study of Canadians shopping for a house found that first impressions matter more than price, lot size and square-footage.
Nationally, 46 per cent of respondents said their yard catches their attention before anything else. The survey also found that 40 per cent say that a deck or patio is the most important backyard feature to consider in a prospective home.
How did they get this statistic?
Leger Marketing surveyed 1,500 Canadian women between the ages of 18 and 49 years for this survey, which was commissioned by Home Depot Canada. The data was weighted against Statistics Canada to ensure a sample representative of the Canadian adult population. The maximum margin of error for a sample of 1,500 respondents is plus or minus 2.5 per cent, 19 times out of 20.
So the next time your agent gives you advice on doing some “home work,” – DO IT! If you don’t remember where to start, here are a few pointers suggested by Home Depot:
- Add potted plants around the doorway and porch. Place shrubs along the driveway and keep grass neatly cut to showcase your home.
- Repaint the garage door, front door and window shutters. Clean the windows.
- Renew hardwood by refinishing and staining it to make it look brand new. Consider replacing worn floors altogether.
- Update lighting fixtures and apply a new coat of paint to the house interior to erase the wear of everyday living.
- If you're going to invest in renovations, consider starting with the kitchen, the most important room to prospective buyers. If that is beyond the reach of your budget, consider replacing the appliances and counters, then simply re-facing the cabinets and hardware.
info source: Joanne Hatherly, Victoria Times Colonist; CanWest News Service
Nationally, 46 per cent of respondents said their yard catches their attention before anything else. The survey also found that 40 per cent say that a deck or patio is the most important backyard feature to consider in a prospective home.
How did they get this statistic?
Leger Marketing surveyed 1,500 Canadian women between the ages of 18 and 49 years for this survey, which was commissioned by Home Depot Canada. The data was weighted against Statistics Canada to ensure a sample representative of the Canadian adult population. The maximum margin of error for a sample of 1,500 respondents is plus or minus 2.5 per cent, 19 times out of 20.
So the next time your agent gives you advice on doing some “home work,” – DO IT! If you don’t remember where to start, here are a few pointers suggested by Home Depot:
- Add potted plants around the doorway and porch. Place shrubs along the driveway and keep grass neatly cut to showcase your home.
- Repaint the garage door, front door and window shutters. Clean the windows.
- Renew hardwood by refinishing and staining it to make it look brand new. Consider replacing worn floors altogether.
- Update lighting fixtures and apply a new coat of paint to the house interior to erase the wear of everyday living.
- If you're going to invest in renovations, consider starting with the kitchen, the most important room to prospective buyers. If that is beyond the reach of your budget, consider replacing the appliances and counters, then simply re-facing the cabinets and hardware.
info source: Joanne Hatherly, Victoria Times Colonist; CanWest News Service
Thursday, August 9, 2007
July 2007 – Another Record Broken
July 2007 – Another Record Broken.
On August 2nd TREB reported sales 26% ahead of last year’s July record – setting a new all time record for this month. While sales have gone up, prices eased down two percent from June’s average of $373,719. However this decline is thought to be a seasonal. "Prices tend to ease in July/August as potential homebuyers and sellers go on holiday," said the President. He went on to note that the year-to-date average, at $373,326, was up five per cent over the same time-frame in 2006. This goes along with what I had experienced on home searching for clients. July was a slow month for new listings.
- data source: TREB
On August 2nd TREB reported sales 26% ahead of last year’s July record – setting a new all time record for this month. While sales have gone up, prices eased down two percent from June’s average of $373,719. However this decline is thought to be a seasonal. "Prices tend to ease in July/August as potential homebuyers and sellers go on holiday," said the President. He went on to note that the year-to-date average, at $373,326, was up five per cent over the same time-frame in 2006. This goes along with what I had experienced on home searching for clients. July was a slow month for new listings.
- data source: TREB
Thursday, July 26, 2007
July Stats
July 6, 2007 -- Last month the Toronto Real Estate Market recorded 10,451 sales for the best June performance ever, Toronto Real Estate Board President Donald Bentley announced today. "June's figure was up almost 20 per cent over the 8,730 sales recorded during the same month in 2006, and down only slightly (six per cent) from May's best-ever figure of 11,146 sales. For those people looking for an indication of a bubble bursting or market slowing, they will just have to keep waiting - as I have for the last few years.
However there is some good news for fence sitters, the average prices declined marginally (less than one per cent) from May to $381,963. The year-to-date average was $373,719, up five per cent over the first six months of 2006 ($356,977). Dispite these figures "Price increases remain only modest," noted the President. From the client's that I've been in contact with the affordability is still present for many families after working out TDS and GDS figures. "Inventory, at 21,789, is robust enough to keep a lid on upward inflation. The current market is still accessible to first-time buyers, and should continue in this mode for the foreseeable future."
Breaking down the total, 3,936 sales were reported in TREB’s 28 West districts and averaged $356,513; 1,819 sales were reported in the 14 Central districts and averaged $513,491; 2,248 sales were reported in the 23 North districts and averaged $406,565; and 2,448 sales were reported in TREB’s 21 East districts and averaged $302,558.
Source: TREB Market Watch
However there is some good news for fence sitters, the average prices declined marginally (less than one per cent) from May to $381,963. The year-to-date average was $373,719, up five per cent over the first six months of 2006 ($356,977). Dispite these figures "Price increases remain only modest," noted the President. From the client's that I've been in contact with the affordability is still present for many families after working out TDS and GDS figures. "Inventory, at 21,789, is robust enough to keep a lid on upward inflation. The current market is still accessible to first-time buyers, and should continue in this mode for the foreseeable future."
Breaking down the total, 3,936 sales were reported in TREB’s 28 West districts and averaged $356,513; 1,819 sales were reported in the 14 Central districts and averaged $513,491; 2,248 sales were reported in the 23 North districts and averaged $406,565; and 2,448 sales were reported in TREB’s 21 East districts and averaged $302,558.
Source: TREB Market Watch
Clients to Friendships
For me the most gratifying part of my job is when you have a client tell you that they like what you have done for them. Or, they like how you think for them. Knowing that client appeciate my efforts makes it worth while and encouraging. It tells me also that in this job there is opportunity to also extend the relationship from clients to friendships.
There is a lot of competition between real estate agents for business and if the only factor that can be adjusted is commission than we are mostly doomed because the next new player could always have a lower rate. When I started in this business I was asked to think about what can set me apart from others? This was a great excercise because it made me think about my skills and my personality. It made me think of how much I would do for my friends and how they would come to me for help and how they could expect honest answers even if its not what they want to hear. This is what I have packaged together as part of the service I now provide to my clients. This is how I distinguish myself and where I claim my value. From this perspective clients develop a loyalty to me which I respect and return in different forms of favours and gifts. It's not about the money anymore, it's about the relationship - mutual consideration - friendship. The best part becomes the moment when someone tells you what a fabulous job you have done in help / caring for their interests - this is my most rewarding experience.
I realised quite early on that with so much competition in marketplace, a real estate agent must bring more to the table than just a low price. There's always someone that's willing to beat the price but it is much more difficult to beat a personality and high regard for a near stranger.
I strongly believe that technology has already loosened the real estate agents grip on connecting buyer to seller and a real estate agent's value is now going back to the basics of providing good service and client care. The role is now to provide a time saving service that clients aren't available to do for themselves because of their own busy careers. Business owners can appreciate this the most because they learn that they should focus their time on where they can earn the most money and outsource anything that takes away from the main business. The question becomes, how much is your time worth and if having a professional handle your problem saves you time from having to do it yourself and loosing money from your main business.
There is a lot of competition between real estate agents for business and if the only factor that can be adjusted is commission than we are mostly doomed because the next new player could always have a lower rate. When I started in this business I was asked to think about what can set me apart from others? This was a great excercise because it made me think about my skills and my personality. It made me think of how much I would do for my friends and how they would come to me for help and how they could expect honest answers even if its not what they want to hear. This is what I have packaged together as part of the service I now provide to my clients. This is how I distinguish myself and where I claim my value. From this perspective clients develop a loyalty to me which I respect and return in different forms of favours and gifts. It's not about the money anymore, it's about the relationship - mutual consideration - friendship. The best part becomes the moment when someone tells you what a fabulous job you have done in help / caring for their interests - this is my most rewarding experience.
I realised quite early on that with so much competition in marketplace, a real estate agent must bring more to the table than just a low price. There's always someone that's willing to beat the price but it is much more difficult to beat a personality and high regard for a near stranger.
I strongly believe that technology has already loosened the real estate agents grip on connecting buyer to seller and a real estate agent's value is now going back to the basics of providing good service and client care. The role is now to provide a time saving service that clients aren't available to do for themselves because of their own busy careers. Business owners can appreciate this the most because they learn that they should focus their time on where they can earn the most money and outsource anything that takes away from the main business. The question becomes, how much is your time worth and if having a professional handle your problem saves you time from having to do it yourself and loosing money from your main business.
Wednesday, July 18, 2007
New Home Buyers in Toronto - Dodges Tax Bullet
I don't think anyone in related to the real estate business would be for the Toronto land transfer tax that was suggested by toronto city council. Looking at the bigger picture, this tax would counter act the provinces motion to reduce urban sprawl. Essentially the city would be forcing people to move further out into the surrounding GTA so they can purchase the home that they can afford. From a real estate perspective it would have a huge impact on the market as well. A few thousand dollars is not easy to save. Had this crazy tax been implemented we'd definitely see a slow down in the toronto real estate market. And I believe the ripple effect would be huge. Just look around at how many new home sales office there are and how many new condos are being built. Think of all the construction workers involved in each project and other businesses that help the development of these projects.
Well luckily we've dodged the bullet for a while and are now wishing for the provincial government to step in. We'll just have to wait and see if it will become an election issue. Which I doubt because the province has to look after more municipalities than toronto alone.
Well luckily we've dodged the bullet for a while and are now wishing for the provincial government to step in. We'll just have to wait and see if it will become an election issue. Which I doubt because the province has to look after more municipalities than toronto alone.
Monday, July 16, 2007
Who's the real listing Agent?
Many people get confused when they call up a real estate agent and later find out that agent is not the sales person or listing agent for the property. This is just one aspect of this complicated business. Another scenario that is confusing is the open house. Sometimes you go into a home an agent shows you around but as you leave you notice that the picture on the for sale sign totally does not match the agent that just showed the home.
For most home buyers, none of this matters because what you are really interested in is the home. But for people that strictly want to deal with the listing agent, I think there's no better way to find out who you are dealing with than asking the agent yourself. Again, why does it matter? Well, some people have the impression that by working with the listing agent will save money by taking out one middle person. What is not commonly thought about is the contract that the listing agent has in place should the Buyer be introduced by the listing agent. Essentially the listing agent double ends the deal and gets the buyer commission for their work on finding the buyer. So the question is, has the buyer actually saved any money?
Personally, I think it would be difficult ethically to work for both buyer and seller when it comes down to negotiating the deal. The agent is built a trusting relationship to both sides and so how do you argue for a better deal? Who are you arguing for and as an agent keep impartial? Can you as a seller or home buyer trust the agent without a doubt, to not reveal what is deemed confidential during the negotiation process since they are working directly with the other side?
For most home buyers, none of this matters because what you are really interested in is the home. But for people that strictly want to deal with the listing agent, I think there's no better way to find out who you are dealing with than asking the agent yourself. Again, why does it matter? Well, some people have the impression that by working with the listing agent will save money by taking out one middle person. What is not commonly thought about is the contract that the listing agent has in place should the Buyer be introduced by the listing agent. Essentially the listing agent double ends the deal and gets the buyer commission for their work on finding the buyer. So the question is, has the buyer actually saved any money?
Personally, I think it would be difficult ethically to work for both buyer and seller when it comes down to negotiating the deal. The agent is built a trusting relationship to both sides and so how do you argue for a better deal? Who are you arguing for and as an agent keep impartial? Can you as a seller or home buyer trust the agent without a doubt, to not reveal what is deemed confidential during the negotiation process since they are working directly with the other side?
Sunday, July 15, 2007
Listing Search
Propertiesbyben has a great new search function. Click the ShopHomes link just below the Home link. Now home buyers can search for a huge selection of new homes available across the GTA. The inventory is updated daily as well so, you'll be looking at the most recent homes and price adjustments. The ease of use and range of homes are just a couple features that will bring added value to propertiesbyben.com.
Wednesday, July 11, 2007
A Fresh New Start
Welcome to my blog. The newest complement to my website: www.propertiesbyben.com. I'm excited to have this site for more interaction with everyone. My goal is to make it this site my news distribution portal and disussion forum on real estate matters. After all the real estate market affects everyone.
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