GTA REALTORS® REPORTING JANUARY MID-MONTH HOUSING STATISTICS

 Greater Toronto REALTORS® reported 1,749 existing home
sales on the Multiple Listing Service (MLS®) during the first two weeks of January. This result
was almost double the 888 sales reported for the same period in 2009, when sales had dipped
to a recessionary low.

“We have had a strong start to 2010,” said Toronto Real Estate Board President Tom Lebour.
“Widespread sales growth in terms of geography and housing type indicates that many
households remain confident in their ability to purchase and pay for a home over the long-term.”
The average price for transactions in the first two weeks of January was $395,307, compared to
an average of $332,495 for the same period in 2009.

“Double-digit average annual price growth will continue through the first quarter of 2010 as sales
remain high relative to listings and we continue to make comparisons to last year’s winter
downturn,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

New Year, New Market, New Rules

One Home Turf correspondent has been back in touch to relate his good news for the New Year: The reader and his family of six are finally preparing to leave a two-bedroom rental apartment for a roomy house in Georgetown, Ont.
The cramped living quarters were sufficiently motivating to prompt the dad to sweeten his offer a couple of times and vanquish the competition.
You may remember this family from a previous post in October when they were lamenting their bad luck and bad timing. The family sold a house in Brampton last spring when house sales were still sluggish. Then, just as they began a search for a new house in a better location, the market took off again.
Every time they found a house that seemed to suit their family, it would sell within hours. Once they got into the contest in time but lost out to a higher offer, with no chance to increase their own bid.
“We wait for the next one to come along,” he wrote at the time. “Very frustrating situation.”
As the fall season wound down, fewer listings were coming to market, but they continued to drop in on open houses.
Then, one weekend they stumbled upon an open house for a recently-listed property on a quiet street in pretty Georgetown. The house, with 2,700 square feet, had an asking price of $514,000. It contained a basement apartment that they could rent to help with the mortgage.
They jumped right in with an offer for 97 per cent of the asking price ­­-- which the seller totally ignored.
Already they were dabbling in a much higher price bracket than they had previously considered, so they continued to look around while they hoped that the seller would soften up a bit.
A few weeks later, their agent called and said that two offers were on the table for the Georgetown house. The family decided to go ahead and offer the full asking price with no conditions.
Wouldn’t you know it, it still wasn’t enough. But this time they did have the opportunity to increase their bids.
“The thought of future months with all 6 of us squeezed into this tiny apartment quite motivated us to increase our offer.”
After the third round, the family prevailed with an accepted offer of $516,000. Their agent said they beat the competition by only several hundred dollars.
Now they’re packing, finalizing details, and trying to draw a tenant who won’t mind renting a basement apartment with a rambunctious family living above.
“It feels good to have the housing plan in place instead of the stumbling-in-the-dark feeling you have when things don’t go smoothly,” he says after that trying ordeal.
Economists and real estate agents are predicting that listings will rise in the spring - which they always do, of course - but this year they are looking for an effect more pronounced than the usual seasonal bounce.
We’ll have more detail about the listings outlook in a feature in Globe Real Estate on Friday. But all of the harbingers are pointing towards a frantically busy spring.
For now, though, the Georgetown family is just happy that they don’t have to wait that long.


For Twitter Updates go to http://twitter.com/WilliamKar 

Your kind of town, Toronto is

In several studies conducted throughout the past two years Toronto has consistently earned a ranking as an Alpha city, an important hub in the global economic system.

Loughborough University in the United Kingdom undertook one of the first studies developed to rank global cities in 1998. In its updated 2008 study, Toronto ranked 15th in the world. The only North American city to achieve a higher ranking was New York City, in 1st place.

A similar study was also undertaken in 2008 by the consulting firm A. T. Kearney and the Chicago Council on Global Affairs. In this study Toronto ranked 10th in the world.

A more recent study published by Tokyo’s Institute for Urban Strategies at The Mori Memorial Foundation ranked Toronto 15th.

In this case, the only North American cities to achieve higher rankings were New York and Los Angeles, in 1st and 13th spots respectively.

In these studies Toronto consistently received top marks with respect to culture and livability. The GTA is home to more than 5.5 million people and is one of the world’s most ethnically diverse, with more than 100 languages spoken throughout the city. We have low crime rates, a clean environment and a high standard of living.

In fact, Toronto consistently earns the highest world ranking of all North American cities in a quality of living study undertaken annually by the global consulting firm The Mercer Group, and many of the characteristics that contribute to this rating are internationally renowned.

We have the tallest tower in the western hemisphere, the world’s seventh largest stock exchange, globally acclaimed universities and an international airport. Toronto is home to the longest street and the longest running fair in the world. We even have one of the largest zoos. We have more performing arts venues than anywhere else and one of the most significant film festivals in the world as well.

On any given day, there’s no shortage of attractions to take in, from quality galleries and museums, to professional sports matches and cultural festivals like Caribana, Taste of the Danforth and the Dragon Boat Race.

The reasons to love our city are countless. If you haven’t yet invested in a GTA property, I encourage you to talk to a Greater Toronto REALTOR®. For more information please visit www.TorontoRealEstateBoard.com

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


For Twitter Updates go to http://twitter.com/WilliamKar

Land Transfer Tax Questions and Answers

Do I qualify for the Land Transfer Tax Refund for First-time Homebuyers if I signed my agreement of purchase and sale for my resale home on December 1, 2007?

No, the Land Transfer Tax Refund Program for First-time Homebuyers of resale homes only applies to agreements of purchase and sale entered into after December 13, 2007.

First-time buyers who enter into an agreement of purchase and sale before December 14, 2007 may still be eligible for a land transfer tax refund, but only if the home is newly constructed.

Applications for a refund must be made within 18 months after the date of the transfer.

For further information refer to Ontario Tax Bulletin LTT 1-2008 Land Transfer Tax Refunds For First-time Homebuyers.

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If a parent is also on title to a child's property at the insistence of the bank, is the child eligible for the refund as long as all of the other conditions are met?

In this situation, it will be necessary to pay land transfer tax at the time of registration and apply for a refund from the ministry.

If the parent did not acquire a beneficial interest in the property as a result of the conveyance:

• the ministry will accept the fact that the parent was on title as a trustee for the child, and
• the child would qualify for the newly constructed home refund, provided that evidence of the trust is submitted (e.g., a letter from the bank confirming that the parent is on title for mortgage purposes).

For further information refer to Ontario Tax Bulletin LTT 1-2005 – Conveyances Involving Trusts.

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How do I apply for the refund of land transfer tax for first-time homebuyers?

Normally, upon registration, your lawyer will complete the appropriate tax statements in the electronic land registration system, and the refund will be deducted automatically from the land transfer tax that would otherwise be payable.

If this did not occur, after registration you can apply for the refund by submitting an application to the ministry consisting of the following documentation:

• completed Land Transfer Tax Refund Affidavit For First-time Purchasers;
• copy of the registered conveyance;
• evidence of the amount of tax paid on registration;
• copy of the Agreement of Purchase and Sale (including all schedules and amendments);
• copy of the Statement of Adjustments; and,
• copy of the Tarion new home warranty certificate (if applicable).

For further information, refer to Ontario Tax Bulletin LTT 1-2008 Land Transfer Tax Refunds For First-time Homebuyers.

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My spouse and I are buying our first home together. I have owned a home before, but sold it before we became spouses. My spouse has never owned a home. Does she qualify for the First-time Homebuyers Refund?

Yes, even though you are not a first-time homebuyer, your spouse may claim a refund up to the maximum, as long as you did not own a home while you were each others "spouse."

Where a husband who is not a first-time purchaser and a wife who is a first-time purchaser, purchase a home together, the wife may claim the land transfer tax refund with respect to her interest. The wife may also claim a refund of land transfer tax with respect to her husband's interest, if he sold his interest in all homes that he previously owned before becoming her spouse.

For land transfer tax purposes, "spouse" means either of two persons who are married to each other, or who are not married to each other and who have cohabited:

• continuously for a period of not less than three years; or
• in a relationship of some permanence, if they are the natural or adoptive parents of a child.
  

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My partner and I are buying a home together. I have owned a home, but he has not. Does he qualify for the First-time Homebuyers Refund?

Your partner's eligibility for a refund depends on whether you are "spouses" as defined in section 29 of the Family Law Act.

For land transfer tax purposes, "spouse" means either of two persons who are married to each other, or who are not married to each other and who have cohabited:

• continuously for a period of not less than three years; or
• in a relationship of some permanence, if they are the natural or adoptive parents of a child.
  If you are not spouses, then your partner may claim a refund based on his/her interest acquired in the home.

If you are "spouses", your partner may claim a refund up to the maximum, as long as you did not own a home while you were each other's "spouse." If you did own the home while you were each other's "spouse", then your partner does not qualify for a refund even if you did not live in the house together.

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What are the requirements to qualify for the refund of land transfer tax for first-time homebuyers?

The requirements are as follows:

• The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.
• If the purchaser has a spouse, the spouse cannot have owned a home, or had any ownership interest in a home, anywhere in the world, while he or she was the purchaser's spouse. If this is the case, no refund is available to either spouse.
• The purchaser must be at least 18 years of age.
• The application for a refund must be made within 18 months after the date on which the conveyance or disposition occurred. (Note that an application for the refund can be completed upon the electronic registration of the conveyance).
• The purchaser must occupy the home as his or her principal residence no later than nine months after the date of the conveyance or disposition.
• The purchaser cannot have previously received an Ontario Home Ownership Savings Plan (OHOSP) based refund of land transfer tax.
• If the agreement of purchase and sale is entered into before December 14, 2007, the home must be newly constructed.

For further information refer to Ontario Tax Bulletin LTT 1-2008 Land Transfer Tax Refunds For First-time Homebuyers.

For Twitter Updates go to http://twitter.com/WilliamKar

Land Transfer Tax Refund for First-time Homebuyers

Land Transfer Tax applies to all transfers of land in Ontario.

First-time homebuyers may be eligible for a refund of all or part of the tax.

• For agreements of purchase and sale entered into before December 14, 2007, the refund only applies on the purchase of a newly constructed home.
• For agreements of purchase and sale entered into after December 13, 2007, the refund applies to all homes, whether newly constructed or resale.

Applications for a refund must be made within 18 months after the date of the transfer.

On July 1, 2010, Ontario is proposing to introduce a federally administered Harmonized Sales Tax (HST) that will apply to most goods and services.

The HST would apply to newly constructed homes, but would not apply to resale homes. Buyers of new homes would receive a rebate of up to $24,000 regardless of the price of the new home.

Learn more

How much is the refund?

The maximum amount of the refund is $2,000. If the refund is claimed at time of registration, it may offset the land transfer tax ordinarily payable. If not claimed at registration, the refund may be claimed directly from the Ministry of Revenue. No interest is paid on this refund.

Who qualifies?

To claim a refund, you:

• must be at least 18 years of age;
• must occupy the home as your principal residence within 9 months of after the date of transfer; and
• cannot have owned a home, or an interest in a home, anywhere in the world.

In addition:

• your spouse cannot have owned a home, or an interest in a home, anywhere in the world while being your spouse; and
• in the case of a newly constructed home, you must be entitled to a Tarion New Home Warranty.

For Twitter Updates go to http://twitter.com/WilliamKar

Buy now! HST is on the way

The new harmonized sales tax being proposed in British Columbia and Ontario may end up being an overall wash for some consumers but anyone buying a new house is about to get dinged.

The HST met with some resistance from the real-estate sector in Canada’s largest province when it was first proposed earlier this year but the government agreed to some concessions.

New homes in Ontario currently just face a 5% goods-and-services tax, which builders have buried in the price of the home since the tax was introduced 19 years ago. Starting on July 1 of next year, new houses would face a combined HST which would be 13% in Ontario.

With new-home sales slowing after a seven-year bull run, the last thing the industry needed was something that would curtail activity further.

There was a sigh of relief when the government agreed to grandfather from the tax any deals signed prior to the date the announcement was made — June 18, 2009. Deals closed before July 1, 2010 would also not face the tax.

Everybody else was in trouble. So the government came up with an exemption from the added tax on the first $400,000 of any new home, meaning consumers outside of Toronto were for the most part unaffected.

Despite the government’s “generosity,” about 40% of people buying a new home in Toronto are going to face a major tax hit. That’s the percentage of new homes that sell for more than $400,000.

On a $500,000 home in Toronto, the HST will mean $6,000 in new taxes. Here’s how it works. The HST means an additional $40,000 in new taxes on that home, based on 8%. Builders get an estimated 2% tax credit on supplies, lowering the bill to $30,000. Minus a $24,000 tax break on the first $400,000 and you get to $6,000.

So who is going to pay for that $6,000? As the price goes up, the tax bill gets higher. It’s $36,000 for a $1-million home.

“I don’t know this for a fact but I don’t think any builder will make [the HST] an extra closing cost because they imbedded the GST for so long,” says Stephen Dupuis, chief executive of the Toronto-based Building & Industry Land Development Association.

Maybe that extra tax is not added on to the sticker price, but at some point the consumer is going to pay. Maybe through a higher price, cheaper materials or fewer finishings thrown in.

“A tax like this is going to be passed on to the consumer over time and the consumer is going to lose,” says Brian Johnston, president of Monarch Corp., one of Toronto’s largest home builders.

Economist Benjamin Tal, of CIBC World Markets, predicts the tax will have an impact on housing sales. “It’s not like something you can brush under the carpet,” says Mr. Tal. “There will be reduced demand.”

He predicts the industry will build more houses without all the finishings. That will leave the consumer to do work on the black market with contractors to avoid the HST. That’s what happened in the Maritimes, where the HST has been in play for years, said Mr. Tal.

“This will give a boost to the under-the-table transactions. Is that an optimum thing?” says Mr. Tal.

It’s no wonder British Columbia’s housing industry is fighting the HST tooth and nail. It’s not interested in the Ontario compromise of an exemption on the first $400,000 of a home. B.C will provide a $20,000 tax break on the first $400,000 of a purchase, the amount being lower because the province has a 7% sales tax.

“There is no single family home here you can buy at that price,” says Peter Simpson, chief executive of the Greater Vancouver Home Builders’ Association. “They’ve taken what happened in Ontario and thought it would fly here. They underestimated the pushback on HST out here.”

The provincial budget released this past week gave few hints the province might back down on taxing the industry, other than a throwaway line that it would work with industry groups to minimize the impact of the HST.

Mr. Simpson says he’s not interested in any compromise, including any compromise that might grandfather housing now under construction from the new tax.

“I won’t even talk about that. It will mean we’ve given in and we’re not,” says Mr. Simpson.

Good luck. Something tells me the cost of housing in B.C. is going to rise.

Dusty Wallet Having just come back from vacation, DW is amazed by the difference in exchange rates one gets at the airport, the bank or those currency traders located in the little booths. Shop around, rates can vary by as much 10%.

Read it on Global News

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