Pressure on the Government from the Canadian Real Estate Association results in Proposed Changes

Changes Proposed for HST on New Housing

June 19, 2009 — The provincial government has announced some proposed changes to the way it would apply the proposed Harmonized Sales Tax (HST) to the purchase price of newly constructed housing. The provincial government has also announced proposed transitional details for newly constructed properties.

Background
The provincial government has announced that it intends to combine the eight percent Provincial Sales Tax with the five percent federal Goods and Services Tax, creating a 13 percent Harmonized Sales Tax (HST).
• The HST is NOT YET IN EFFECT. The provincial government has indicated that it intends to bring the HST into effect beginning on July 1, 2010.
• HST will not apply on the purchase price of re-sale homes.
• HST would apply to services such as moving cost, legal fees, home inspection fees, and REALTOR® commissions.

Proposed Changes for New Housing Rebate
HST will apply to the purchase price of newly constructed homes. Originally, the provincial government indicated that it would provide a rebate to ensure that, on average, new homes under $400,000 would not be subject to an additional tax burden. Homes priced between $400,000 and $500,000 would be eligible for a portion of the rebate, and homes priced above $500,000 would be subject to the full HST. However, the provincial government is proposing some significant enhancements to these rebates, as follows:
• Enhanced new housing rebate – The province is proposing to enhance the new housing rebate so that new homes across all price ranges would receive a 75 per cent rebate of the provincial portion of the single sales tax on the first $400,000. For new homes under $400,000, this would mean, on average, no additional tax amount compared to the current system.
• New rental housing rebate – Similar to the enhanced new housing rebate, the province is proposing a rebate for new residential rental properties. This proposed rebate would support affordable rental housing across Ontario.

Proposed Transitional Rules for New Housing
The province is also proposing transitional rules for new housing. Generally, as part of the transitional rules, sales of new homes under written agreements of purchase and sale entered into on or before June 18, 2009 would not be subject to the provincial portion of the single sales tax, even if both ownership and possession are transferred on or after July 1, 2010. The tax would also not apply to sales of new homes under written agreements of purchase and sale entered into after June 18, 2009 where ownership or possession is transferred before July 1, 2010.

More Detail
Additional detail on the proposed enhancements to the new housing rebate, rental housing rebate, and new housing transition rules is available from the Provincial Government here.

Fantastic June So Far in GTA

Everyday I am asked at least 10 times, how’s the real estate market.  When I answer its really busy people look at me with a skeptical look.  I have been telling everyone who will listen for weeks that the market in the GTA and that includes Brampton is hot.  I have been on a double offer (where there are at least 2 offers on a home) 10 of the last 12 weeks.  One of the homes had 8 offers on it.  I was also encouraging everyone I could to get pre-qualified before interest rates changed and sure enough they have increase over the past 2 weeks.  What this means for sellers is there are Buyers out there with Pre-approvals at the low low rates who have to buy and close in the next 90- 120 days.  So if you are thinking of selling, call me today.  We want to make sure you capitalize on this activity.  Here is the update on the market from the Toronto Real Estate Board.

GTA Resale Housing Sales Up 19 Per Cent in the First Half of June TORONTO, June 17, 2009 – Greater Toronto REALTORS® reported 5,185 transactions in the first half of June – an increase of 19 per cent compared to the same period last year. “Households in the GTA have become more confident in purchasing a home over the past three months,” said TREB President Maureen O ’ Neill. “Affordability, due in part to very low borrowing costs, has played a key role.” The average price for MLS® sales was $407,716, up by two per cent compared to last year. “Heightened interest in ownership housing this spring has solidified resale home prices,” according to Jason Mercer, TREB’s Senior Manager of Market Analysis. “ The number of home buyers has been high relative to the number of listings, pushing the average price above last year’s level. ” Summary Of Mid-June Sales And Average Price June 2009 2008 Sales Average Price SalesAverage Price City of Toronto (“416”) 2,023$449,946 1,733$439,469 Rest of GTA (“905”) 3,162$380,698 2,641$371,686 GTA 5,185$407,716 4,374$398,542 Source: Toronto Real Estate Board

Ruth Meets with Prime Minister Harper

Last Month as part of my duties as President Elect for the Brampton Real Estate Board we went off to Ottawa to Lobby our Local MP’s.  To help stimulate the economy we proposed extending the Home-buyers RSP programme to include all buyers not just first time buyers.  We asked that the Government consider opening this plan  to all homeowners to help them take advantage of the fantastic interest rates and enable them to use their RSP as part of their down payment. It may also allow those who are at threat of losing their homes to use this money without tax loses to stay in their current home or move down to a more manageable one.   Last year the Canadian Real Estate Association was successful in Lobbing the Government to have them increase the RSP limit  from $20,000 to $25,000 for homeowners. 

We also urged the current government to change the Capital Gains Tax law to allow Small Real Estate Investors to sell their present property and move up to a large property without paying capital gains tax as long as the money was reinvested in another property. 

We also visited our MPP’s in May to relay our dissatisfaction with the harmonized Gst.  This tax will add an additional (approx) $2000 to a purchase of a new home in closing cost as all services will be subjected to the full 13% instead of the current 5%.  Also the purchase of a new home will be affected.  The government has a sliding scale where lower homes up to $400,000 would be exempt then a portion between $400,000 and $500,000 would have to pay a portion of the tax and those buying a new home over $500,000 would have to pay the full wack of 13%.  This means that homes over $500,000 c0uld be paying an additional $40,000 plus dollars in tax.

We also lobbied to stop the Mandatory Energy Audit.  This would have meant that each home would have  had to have an Green Energy Audit when sold.  This would have caused many major headaches for Homeowners trying to sell their home.  Luckily we were successful in having the bill amended to allow the Buyer to Opt out of the Audit. 

President Elect for Brampton Real Estate Board Lobbys Government

President Elect for Brampton Real Estate Board Lobbys Government

Continue reading “Ruth Meets with Prime Minister Harper”

Happy Father’s Day to All Dads

My Dad and I

Just a wish for all the Dads today on Father’s Day!  Hope you have a great day. 

 My dad, is in florida today.  I talked to him this morning as I do every day.  He will try to play golf,  although he gave it a miss yesterday as it was 97 degrees. 

My daughter and I will spend today pampering her dad with  a sail on Lake Ontario. 

Dad, I love you and thank you for all you Still do for me.

Real Estate Sales in May 2009 better than May 2008

Hello Friends.  Well it was a much longer process than we thought it would be adding this to the website but we are up and Running.  In case you missed our last email here it is:

Just a short note to let you know what is happening in the Real Estate Market in the GTA.  Today we received great news.  The sales in May 2009 were better than the sales in May 2008.  This is the first concrete stat that has shown how hot the market is in the GTA.  The full article is below.  
Also I had a note from our Mortgage Broker that rates have jumped up. She wrote:  “Well the bond yields has been doing well over the last few weeks, as you are aware the fixed rate money is based on the “bond yields”, because the yields have been increasing, we saw this coming, yes, the 5 year fixed has moved up and some of the lenders have increased their 7 and 10 year rates.”  
So to avoid further dissappointment call me today @ 905-456-1000 ext. 3344 and let me get you a pre-approval (that will last for up to 3 Months) at the best rate offered today.  We don’t know how long these low low rates will last and we don’t want to miss out if they go up further.  
 
Don’t forget to check out the website for all kinds of Real Estate Info.  www.RuthBallantyne.com
 

GTA May Resale Housing Sales Higher Than Last Year

 
TORONTO, June 3, 2009 – In May 2009, Greater Toronto REALTORS® reported 9,589 sales,
up almost two per cent from May 2008 – the first annual increase since December 2007. The
seasonally adjusted annual rate of sales in May was 81,3001.
 
“The resale housing market in the GTA has remained resilient in the face of challenging times
globally,” according to TREB President Maureen O’Neill. “Many home buyers have taken
advantage of extremely low mortgage rates.”
 
The average price for May transactions was $395,609 – down less than one per cent compared
to the same month last year.
 
“The average resale home price has moved in line with last year’s level because of tighter
market conditions experienced this Spring,” stated Jason Mercer, TREB’s Senior Manager of
Market Analysis. “Home sales have increased strongly relative to new listings, bolstering home
prices.”
 
                                    Sales Average Price    Sales Average Price
City of Toronto (“416”) 3,777 $432,478           3,711 $434,271
Rest of GTA (“905”)     5,812 $371,649           5,700 $374,629
GTA                            9,589 $395,609            9,411 $398,148
SUMMARY OF MAY SALES AND AVERAGE PRICE ‐ 2009/2008May 2009/ 2008
Source: Toronto Real Estate Board
1Seasonally adjusting TREB MLS® data removes recurring seasonal trends observed each year. For example, MLS® sales are highest in late
spring each year and lowest in the winter months. Removing the recurring seasonality, allows for the analysis of a meaningful trend reflecting
actual changes in market conditions. By multiplying the monthly seasonally-adjusted figure by 12, creating an annual rate, we can compare how
the current month relates to historical annual figures.
 
For a complete copy of the Market Watch Report Contact Ruth@RuthBallantyne.com
 
 
 
 
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