Ontario homeowners have begun to receive updated property
assessments in their mailboxes this fall and given that
the average increase is five per cent, many are concerned
about the impact, should municipalities hike property taxes
in 2009. While property tax is a significant cost of homeownership,
there are a number of tax benefits to be gained
by owning real estate.
The most notable tax benefit of owning a home is the capital
gains tax exemption. Simply put, when you sell your
principal residence, you are not required to pay tax on the
profit you make from the sale.
Another key benefit is the GST exemption on all resale
homes. New homes are subject to the GST however; rebates
for houses up to $450,000 are available. (In the Greater Toronto
Area most builders include the GST in the price of the
house and therefore any rebate is assignable to them.)
If you’re planning to buy a home for the first time, you are
eligible to receive rebates of the provincial and Toronto land
transfer taxes. The maximum provincial land transfer tax
(LTT) rebate for first-time buyers is $2,000 and the maximum
Toronto LTT rebate for first time buyers is $3,725.
Every first-time homebuyer can also make a tax-free withdrawal
of up to $20,000 from RRSPs that have been owned
for at least 90 days, provided the funds are repaid into an
RRSP with 15 years. Some existing homeowners can also
utilize this benefit, called the Homebuyers’ Plan, provided
they are purchasing a home that is more accessible or suited
to the care of a disabled dependent relative who qualifies
for the disability tax credit.
Seniors with an income threshold of $23,820 and others with
low to moderate incomes can get a break on their housing
costs by claiming the property tax credit on their federal
income tax returns. This applies to Ontario residents at least
16 years of age (for whom the Canada Child Tax Benefit is
not being received) paying, or having paid for them, rent or
property tax on a principal residence in the province. The
amount you receive depends on your age and income.
If you’re planning to buy an additional property for investment
purposes, the rental income you achieve is taxable
however; the expenses of operating your rental property are
deductible from your rental income. Expenses such as
property taxes, insurance and repairs on the property can
all be deducted.
When it comes time to sell your investment, any profit you
make will be taxed as a capital gain however; from a tax
perspective, a capital gain is a preferred form of income.
The taxable portion of a capital gain is significantly lower
than income earned by employment, business, interest or
dividends.
As there are many provisions to most tax rules, be sure
to consult your REALTOR® and your financial advisor for
full details. As well, for information on more government
programs for homeowners and homebuyers, visit www.TorontoRealEstateBoard.
com
Maureen O’Neill is President of the Toronto Real Estate
Board, a professional association that represents 28,000
REALTORS® in the Greater Toronto Area. For more information
please visit www.TorontoRealEstateBoard.com.
Sunday, November 2, 2008
Saturday, September 13, 2008
10 Reasons to Hire a Real Estate Agent
1) Education & Experience: You don't need to know everything about buying and selling real estate if you hire a real estate professional who does. Henry Ford once said that when you hire people who are smarter than you are, it proves you are smarter than they are. The trick is to find the right person. For the most part, they all cost about the same. Why not hire a person with more education and experience than you? We're all looking for more precious time in our lives, and hiring pros gives us that time.
2) Agents are Buffers: Agents take the spam out of your property showings and visits. If you're a buyer of new homes, your agent will whip out her/his sword and keep the builder's agents at bay, preventing them from biting or nipping at your heels. If you're a seller, your agent will filter all those phone calls that lead to nowhere from lookie loos and try to induce serious buyers to immediately write an offer.
3) Neighborhood Knowledge: Agents either possess intimate knowledge or they know where to find the industry buzz about your neighborhood. They can identify comparable sales and hand these facts to you, in addition to pointing you in the direction where you can find more data on schools, crime or demographics. For example, you may know that a home down the street was on the market for $350,000, but an agent will know it had upgrades and sold at $285,000 after 65 days on the market and after twice falling out of escrow.
4) Price Guidance: Contrary to what some people believe, agents do not select prices for sellers or buyers. However, an agent will help to guide clients to make the right choices for themselves. If a listing is at 7%, for example, an agent has a 7% vested interest in the sale, but the client has a 93% interest. Selling agents will ask buyers to weigh all the data supplied to them and to choose a price. Then based on market supply, demand and the conditions, the agent will devise a negotiation strategy.
5) Market Conditions Information: Real estate agents can disclose market conditions, which will govern your selling or buying process. Many factors determine how you will proceed. Data such as the average per square foot cost of similar homes, median and average sales prices, average days on market and ratios of list-to-sold prices, among other criteria, will have a huge bearing on what you ultimately decide to do.
6) Professional Networking: Real estate agents network with other professionals, many of whom provide services that you will need to buy or sell. Due to legal liability, many agents will hesitate to recommend a certain individual or company over another, but they do know which vendors have a reputation for efficiency, competency and competitive pricing. Agents can, however, give you a list of references with whom they have worked and provide background information to help you make a wise selection.
7) Negotiation Skills & Confidentiality: Top producing agents negotiate well because, unlike most buyers and sellers, they can remove themselves from the emotional aspects of the transaction and because they are skilled. It's part of their job description. Good agents are not messengers, delivering buyer's offers to sellers and vice versa. They are professionals who are trained to present their client's case in the best light and agree to hold client information confidential from competing interests.
8) Handling Volumes of Paperwork: One-page deposit receipts were prevalent in the early 1970s. Today's purchase agreements run 10 pages or more. That does not include the federal- and state-mandated disclosures nor disclosures dictated by local custom. Most real estate files average thicknesses from one to three inches of paper. One tiny mistake or omission could land you in court or cost you thousands. In some states, lawyers handle the disclosures, thank goodness!
9) Answer Questions after Closing: Even the smoothest transactions that close without complications can come back to haunt. For example, taxing authorities that collect property tax assessments, doc stamps or transfer tax can fall months behind and mix up invoices, but one call to your agent can straighten out the confusion. Many questions can pop up that were overlooked in the excitement of closing. Good agents stand by ready to assist. Worthy and honest agents don't leave you in the dust to fend for yourself.
10) Develop Relationships for Future Business: The basis for an agent's success and continued career in real estate is referrals. Few agents would survive if their livelihood was dependent on consistently drumming up new business. This emphasis gives agents strong incentives to make certain clients are happy and satisfied. It also means that an agent who stays in the business will be there for you when you need to hire an agent again. Many will periodically mail market updates to you to keep you informed and to stay in touch.
Arshad Khan, Certified Home Inspector - P.Eng.
Qualityspec Inc. "We See What You Don't See"
(905) 231-9882 / (416) 627-4773
2) Agents are Buffers: Agents take the spam out of your property showings and visits. If you're a buyer of new homes, your agent will whip out her/his sword and keep the builder's agents at bay, preventing them from biting or nipping at your heels. If you're a seller, your agent will filter all those phone calls that lead to nowhere from lookie loos and try to induce serious buyers to immediately write an offer.
3) Neighborhood Knowledge: Agents either possess intimate knowledge or they know where to find the industry buzz about your neighborhood. They can identify comparable sales and hand these facts to you, in addition to pointing you in the direction where you can find more data on schools, crime or demographics. For example, you may know that a home down the street was on the market for $350,000, but an agent will know it had upgrades and sold at $285,000 after 65 days on the market and after twice falling out of escrow.
4) Price Guidance: Contrary to what some people believe, agents do not select prices for sellers or buyers. However, an agent will help to guide clients to make the right choices for themselves. If a listing is at 7%, for example, an agent has a 7% vested interest in the sale, but the client has a 93% interest. Selling agents will ask buyers to weigh all the data supplied to them and to choose a price. Then based on market supply, demand and the conditions, the agent will devise a negotiation strategy.
5) Market Conditions Information: Real estate agents can disclose market conditions, which will govern your selling or buying process. Many factors determine how you will proceed. Data such as the average per square foot cost of similar homes, median and average sales prices, average days on market and ratios of list-to-sold prices, among other criteria, will have a huge bearing on what you ultimately decide to do.
6) Professional Networking: Real estate agents network with other professionals, many of whom provide services that you will need to buy or sell. Due to legal liability, many agents will hesitate to recommend a certain individual or company over another, but they do know which vendors have a reputation for efficiency, competency and competitive pricing. Agents can, however, give you a list of references with whom they have worked and provide background information to help you make a wise selection.
7) Negotiation Skills & Confidentiality: Top producing agents negotiate well because, unlike most buyers and sellers, they can remove themselves from the emotional aspects of the transaction and because they are skilled. It's part of their job description. Good agents are not messengers, delivering buyer's offers to sellers and vice versa. They are professionals who are trained to present their client's case in the best light and agree to hold client information confidential from competing interests.
8) Handling Volumes of Paperwork: One-page deposit receipts were prevalent in the early 1970s. Today's purchase agreements run 10 pages or more. That does not include the federal- and state-mandated disclosures nor disclosures dictated by local custom. Most real estate files average thicknesses from one to three inches of paper. One tiny mistake or omission could land you in court or cost you thousands. In some states, lawyers handle the disclosures, thank goodness!
9) Answer Questions after Closing: Even the smoothest transactions that close without complications can come back to haunt. For example, taxing authorities that collect property tax assessments, doc stamps or transfer tax can fall months behind and mix up invoices, but one call to your agent can straighten out the confusion. Many questions can pop up that were overlooked in the excitement of closing. Good agents stand by ready to assist. Worthy and honest agents don't leave you in the dust to fend for yourself.
10) Develop Relationships for Future Business: The basis for an agent's success and continued career in real estate is referrals. Few agents would survive if their livelihood was dependent on consistently drumming up new business. This emphasis gives agents strong incentives to make certain clients are happy and satisfied. It also means that an agent who stays in the business will be there for you when you need to hire an agent again. Many will periodically mail market updates to you to keep you informed and to stay in touch.
Arshad Khan, Certified Home Inspector - P.Eng.
Qualityspec Inc. "We See What You Don't See"
(905) 231-9882 / (416) 627-4773
Sunday, August 3, 2008
*11 Things You Need to Know to Pass Your Home Inspection
1) Defective Plumbing: Defective plumbing can manifest itself in two different ways: leaking, and clogging. A visual inspection can detect leaking, and an inspector will gauge water pressure by turning on all faucets in the highest bathroom and then flushing the toilet. If you hear the sound of running water, it indicates that the pipes are undersized. If the water appears dirty when first turned on at the faucet, this is a good indication that the pipes are rusting, which can result in severe water quality problems.
2) Damp or Wet Basement: An inspector will check your walls for a powdery white mineral deposit a few inches off the floor, and will look to see if you feel secure enough to store things right on your basement floor. A mildew odor is almost impossible to eliminate, and an inspector will certainly be conscious of it.
It could cost you $200-$1,000 to seal a crack in or around your basement foundation depending on severity and location. Adding a sump pump and pit could run you around $750 - $1,000, and complete waterproofing (of an average 3 bedroom home) could amount to $5,000-$15,000. You will have to weigh these figures into the calculation of what price you want to net on your home.
3) Inadequate Wiring & Electrical: Your home should have a minimum of 100 amps service, and this should be clearly marked. Wire should be copper or aluminum. Home inspectors will look at octopus plugs as indicative of inadequate circuits and a potential fire hazard.
4) Poor Heating & Cooling Systems: Insufficient insulation, and an inadequate or a poorly functioning heating system, are the most common causes of poor heating. While an adequately clean furnace, without rust on the heat exchanger, usually has life left in it, an inspector will be asking and checking to see if your furnace is over its typical life span of 15-25 yrs. For a forced air gas system, a heat exchanger will come under particular scrutiny since one that is cracked can emit deadly carbon monoxide into the home. These heat exchangers must be replaced if damaged - they cannot be repaired.
5) Roofing Problems: Water leakage through the roof can occur for a variety of reasons such as physical deterioration of the asphalt shingles (e.g. curling or splitting), or mechanical damage from a wind storm. When gutters leak and downspouts allow water to run down and through the exterior walls, this external problem becomes a major internal one.
6) Damp Attic Spaces: Aside from basement dampness, problems with ventilation, insulation and vapor barriers can cause water, moisture, mold and mildew to form in the attic. This can lead to premature wear of the roof, structure and building materials. The cost to fix this damage could easily run over $2,500.
7) Rotting Wood: This can occur in many places (door or window frames, trim, siding, decks and fences). The building inspector will sometimes probe the wood to see if this is present - especially when wood has been freshly painted.
8) Masonry Work: Re-bricking can be costly, but, left unattended, these repairs can cause problems with water and moisture penetration into the home which in turn could lead to a chimney being clogged by fallen bricks or even a chimney which falls onto the roof. It can be costly to rebuild a chimney or to have it repainted.
9) Unsafe or Over-fused Electrical Circuit: A fire hazard is created when more amperage is drawn on the circuit than was intended. 15 amp circuits are the most common in a typical home, with larger service for large appliances such as stoves and dryers. It can cost several hundred dollars to replace your fuse panel with a circuit panel.
10) Adequate Security Features: More than a purchased security system, an inspector will look for the basic safety features that will protect your home such as proper locks on windows and patio doors, dead bolts on the doors, smoke and even carbon monoxide detectors in every bedroom and on every level. Even though pricing will vary, these components will add to your costs. Before purchasing or installing, you should check with your local experts.
11) Structural/Foundation Problems: An inspector will certainly investigate the underlying footing and foundation of your home as structural integrity is fundamental to your home.
Arshad Khan, Certified Home Inspector - P.Eng.
Qualityspec Inc. "We See What You Don't See"
(905) 231-9882 / (416) 627-4773
2) Damp or Wet Basement: An inspector will check your walls for a powdery white mineral deposit a few inches off the floor, and will look to see if you feel secure enough to store things right on your basement floor. A mildew odor is almost impossible to eliminate, and an inspector will certainly be conscious of it.
It could cost you $200-$1,000 to seal a crack in or around your basement foundation depending on severity and location. Adding a sump pump and pit could run you around $750 - $1,000, and complete waterproofing (of an average 3 bedroom home) could amount to $5,000-$15,000. You will have to weigh these figures into the calculation of what price you want to net on your home.
3) Inadequate Wiring & Electrical: Your home should have a minimum of 100 amps service, and this should be clearly marked. Wire should be copper or aluminum. Home inspectors will look at octopus plugs as indicative of inadequate circuits and a potential fire hazard.
4) Poor Heating & Cooling Systems: Insufficient insulation, and an inadequate or a poorly functioning heating system, are the most common causes of poor heating. While an adequately clean furnace, without rust on the heat exchanger, usually has life left in it, an inspector will be asking and checking to see if your furnace is over its typical life span of 15-25 yrs. For a forced air gas system, a heat exchanger will come under particular scrutiny since one that is cracked can emit deadly carbon monoxide into the home. These heat exchangers must be replaced if damaged - they cannot be repaired.
5) Roofing Problems: Water leakage through the roof can occur for a variety of reasons such as physical deterioration of the asphalt shingles (e.g. curling or splitting), or mechanical damage from a wind storm. When gutters leak and downspouts allow water to run down and through the exterior walls, this external problem becomes a major internal one.
6) Damp Attic Spaces: Aside from basement dampness, problems with ventilation, insulation and vapor barriers can cause water, moisture, mold and mildew to form in the attic. This can lead to premature wear of the roof, structure and building materials. The cost to fix this damage could easily run over $2,500.
7) Rotting Wood: This can occur in many places (door or window frames, trim, siding, decks and fences). The building inspector will sometimes probe the wood to see if this is present - especially when wood has been freshly painted.
8) Masonry Work: Re-bricking can be costly, but, left unattended, these repairs can cause problems with water and moisture penetration into the home which in turn could lead to a chimney being clogged by fallen bricks or even a chimney which falls onto the roof. It can be costly to rebuild a chimney or to have it repainted.
9) Unsafe or Over-fused Electrical Circuit: A fire hazard is created when more amperage is drawn on the circuit than was intended. 15 amp circuits are the most common in a typical home, with larger service for large appliances such as stoves and dryers. It can cost several hundred dollars to replace your fuse panel with a circuit panel.
10) Adequate Security Features: More than a purchased security system, an inspector will look for the basic safety features that will protect your home such as proper locks on windows and patio doors, dead bolts on the doors, smoke and even carbon monoxide detectors in every bedroom and on every level. Even though pricing will vary, these components will add to your costs. Before purchasing or installing, you should check with your local experts.
11) Structural/Foundation Problems: An inspector will certainly investigate the underlying footing and foundation of your home as structural integrity is fundamental to your home.
Arshad Khan, Certified Home Inspector - P.Eng.
Qualityspec Inc. "We See What You Don't See"
(905) 231-9882 / (416) 627-4773
Thursday, May 15, 2008
Greening Your Home
A green home uses less energy, water and natural resources; creates less waste; and is healthier and more comfortable for the occupants. Benefits include lower energy and water bills; reduced greenhouse gas emissions; and less exposure to mold, mildew and other indoor toxins. But, is the extra cost worth the investment?
I will be adding comments regarding specific products for residential use. For example, what are the advantages of a "Hot water on demand" water heater?, or what are the new sustainable wood floors?
Please send in your comments with your experiences.
May 20: I am noticing more tankless water heaters in resale homes. I heard of one major advantage of this type of water heater: If you spend time away from home like going to a cottage for a good part of the summer or going south for the winter, this water heater does not maintain a tank of hot water. This would definitely save money.
At this time the cost of a tankless water heater is approximately $1900, installed. I got this price from a supplier. You would need substantial savings to make up the cost difference.
Peter...
I will be adding comments regarding specific products for residential use. For example, what are the advantages of a "Hot water on demand" water heater?, or what are the new sustainable wood floors?
Please send in your comments with your experiences.
May 20: I am noticing more tankless water heaters in resale homes. I heard of one major advantage of this type of water heater: If you spend time away from home like going to a cottage for a good part of the summer or going south for the winter, this water heater does not maintain a tank of hot water. This would definitely save money.
At this time the cost of a tankless water heater is approximately $1900, installed. I got this price from a supplier. You would need substantial savings to make up the cost difference.
Peter...
Sunday, January 20, 2008
Indoor Air Quality
Check your air quality
We are now spending the majority of our time in the home. The best way to solve air quality problems is by treating the source of the problem.
You can hire a professional home inspector, who will use instruments to detect contaminants and make recommendations.
The Lung Association provides detailed instructions on how to conduct your own home audit and how to improve the air in your home. It takes you room by room and is quite easy, not very time-consuming and gives you detailed steps on fixing any problems. Visit www.yourhealthyhome.ca or download the association’s Healthy Home Audit brochure.
Keeping it clean is the best defense
These simple steps can help improve your home’s indoor air quality and keep good air from going bad:
1. Don’t permit smoking in your home.
2. Make sure fuel-burning appliances (such as a gas stove, fireplace or furnace) are well maintained and inspected.
3. Make sure every room has adequate ventilation. For example, is your dryer vent blocked or broken? If so, bad air is escaping into your home rather than outdoors as it should.
4. Monitor humidity levels in your home.
5. Fix leaks and cracks in walls, floors and basements.
6. Practice good housekeeping. Consider a vacuum with a HEPA filter to catch small particles: You want to trap dust rather than make it airborne. Central-vacs, which vent the exhaust to the outside are the best to keep from re-circulating dust.
7. Don’t idle your car in your driveway or garage if fumes can get into your home.
8. Ensure that containers of leftover paint are kept tightly sealed and safely stored. As well, try to use unscented and fragrance-free products, or make your own cleaners with baking soda or vinegar.
9. Make sure any furniture made out of particleboard or medium-density fibreboard is sealed or coated. These items may contain adhesives made with urea-formaldehyde resins.
As the Canadian Lung Association reminds us, “When you can’t breathe, nothing else matters.”
Filters are no catch-all
Air filters are an increasingly popular way to remove contaminants and odours from the home. But it still makes sense to eliminate the root causes of poor air quality wherever possible.
If you want to try an air filter or have been advised by your doctor that one could help resolve particular health problems, do your homework. Before you buy, check out the Canadian Lung Association’s recommendations on air-cleaning devices.
We are now spending the majority of our time in the home. The best way to solve air quality problems is by treating the source of the problem.
You can hire a professional home inspector, who will use instruments to detect contaminants and make recommendations.
The Lung Association provides detailed instructions on how to conduct your own home audit and how to improve the air in your home. It takes you room by room and is quite easy, not very time-consuming and gives you detailed steps on fixing any problems. Visit www.yourhealthyhome.ca or download the association’s Healthy Home Audit brochure.
Keeping it clean is the best defense
These simple steps can help improve your home’s indoor air quality and keep good air from going bad:
1. Don’t permit smoking in your home.
2. Make sure fuel-burning appliances (such as a gas stove, fireplace or furnace) are well maintained and inspected.
3. Make sure every room has adequate ventilation. For example, is your dryer vent blocked or broken? If so, bad air is escaping into your home rather than outdoors as it should.
4. Monitor humidity levels in your home.
5. Fix leaks and cracks in walls, floors and basements.
6. Practice good housekeeping. Consider a vacuum with a HEPA filter to catch small particles: You want to trap dust rather than make it airborne. Central-vacs, which vent the exhaust to the outside are the best to keep from re-circulating dust.
7. Don’t idle your car in your driveway or garage if fumes can get into your home.
8. Ensure that containers of leftover paint are kept tightly sealed and safely stored. As well, try to use unscented and fragrance-free products, or make your own cleaners with baking soda or vinegar.
9. Make sure any furniture made out of particleboard or medium-density fibreboard is sealed or coated. These items may contain adhesives made with urea-formaldehyde resins.
As the Canadian Lung Association reminds us, “When you can’t breathe, nothing else matters.”
Filters are no catch-all
Air filters are an increasingly popular way to remove contaminants and odours from the home. But it still makes sense to eliminate the root causes of poor air quality wherever possible.
If you want to try an air filter or have been advised by your doctor that one could help resolve particular health problems, do your homework. Before you buy, check out the Canadian Lung Association’s recommendations on air-cleaning devices.
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