Buyers

BC budget includes new real estate taxes and spending commitments

Housing was the dominant issue in yesterday’s provincial budget.

The government released a 30-point housing strategy aimed at reducing housing demand, curbing tax fraud, building affordable housing, and increasing security for renters.

New tax measures include increasing property taxes and property transfer taxes on residential properties valued above $3 million, expanding the foreign buyer tax, and implementing a housing speculation tax.

“We welcome the provincial government’s commitment to address money laundering concerns and increase the supply of affordable, social, and rental housing in our province,” Jill Oudil, Board president said. “We’re concerned, however, about the series of tax measures announced today. The budget introduces new taxes, hints at future taxes, and hikes existing taxes on housing. Taxes don’t make homes more affordable.”

Below is a summary of the key real estate measures announced today. There’s considerable information to go through. We’re analyzing each item to understand the implications to you and your clients and will report back with more information and analysis in future communications.

Affordable housing

  • The province is investing $6 billion in affordable housing to create 114,000 homes over the next 10 years.
  • The province will enhance local government capacity to build and retain affordable housing.
  • The province will require developers to collect and report comprehensive information about the assignment of pre-sale condo purchases.
  • The province intends to track beneficial ownership information.
  • The province will collect additional information to increase transparency and strengthen enforcement in real estate.

Tax measures

Speculation tax

  • The province will implement a new speculation tax on residential properties, targeting foreign and domestic homeowners who don’t pay income tax in BC. This includes those who leave homes vacant.
  • The tax will apply to the Metro Vancouver, Fraser Valley, Capital, and Nanaimo Regional districts and in the municipalities of Kelowna and West Kelowna.
  • In 2018, the tax rate will be $5 per $1,000 of assessed value. In 2019, the tax rate will rise to $20 per $1,000 of assessed value.
  • The province will administer the tax and will collect data to enforce it including, social insurance numbers, household information, and world-wide income information.

Foreign buyer tax

  • Effective Feb. 21, 2018, the foreign buyer tax will increase to 20 per cent from 15 per cent and will be extended to the Fraser Valley, Capital, Nanaimo, and Central Okanagan Regional Districts.
  • If the property is located in the Capital Regional District, Fraser Valley Regional District, Regional District of Central Okanagan, or Nanaimo Regional District, and the property transfer is registered on or after February 21, 2018, there are transitional rules available here.

Property Transfer Tax

Effective Feb. 21, 2018, the Property Transfer Tax on residential properties above $3 million will increase to five per cent from three per cent.

Provincial School Tax

Beginning in 2019, the provincial school tax will increase on most residential properties in excess of $3 million.

Database on pre-sale condo assignments

The province will require developers to collect and report comprehensive information about the assignment of pre-sale condo purchases. The information will be reported to a designated government office and shared with federal and provincial tax authorities to ensure taxes are paid.

 

Clarity of property ownership

Compelling access to MLS®

The province plans to enable tax administrators to compel access to information relevant to property transfers, such as information held in a MLS® database. (We’re asking government for clarification.)

Beneficial land ownership registry

The province will require additional information about beneficial ownership on the PTT form.

Administered by the LTSA, the information will be publicly available and shared with federal and provincial tax and law enforcement authorities. Legislation will be introduced to require BC corporations to hold accurate and up to date information on beneficial owners in their own record offices available to law enforcement, tax and other authorities.

Task force on money laundering and tax evasion

The province will work with the federal government to formalize a multi-agency working group on tax evasion, money laundering and housing.

 

Read the Homes for BC 30-point plan for housing affordability

 

Read the Budget 2018 Speech

Do you have a Good Buyer’s Agent?

What Makes a Good Buyer’s Agent?

Do you have a good buyers agent? A good buyer’s agent should be able to guide you in getting pre -qualified for a mortgage. Knowing all your options about how to get a mortgage is vital. Whether you choose to go to your bank or to a mortgage broker, a good agent should be able to offer a 2nd opinion of another mortgage specialist to get you your best results. At the end of the day, you want to be working with a lender that you trust, feel comfortable with and will communicate with you each step of the way.

A good buyers agent is someone who is dedicated and patient in explaining to you the process of how to buy a home. This agent should be knowledgeable educated and have solid resources to help you on your way.

A Buyers agent is responsible to find properties that meet your needs and requirements that may include location, price and specifics such as size and extras the home must have. It’s important to choose an agent who specializes in the area that you are looking for therefore you have someone who truly understands what you want.

Once you have an accepted offer, an inspection usually comes next. It goes without saying that a good buyer’s agent is at the home inspection the entire time the home inspector is there. A buyer’s agent should go over the inspector’s report and explains every detail to you.

Throughout the process a good buyer’s agent is in constant contact with the lender and you. It is so important to be aware of each step in the process and make sure that everything is taking place in a timely manner. There is nothing worse than finding out in those last days that somebody dropped the ball and the closing won’t take place on time.

These are things that a good buyer’s agent does for you. This is what makes working with a buyer’s agent so important!

5 THINGS TO THROW OUT FOR A CLUTTER-FREE START TO 2018

The start of a new year is the ideal time to make changes at home. One common New Year’s resolution is to cut the clutter, helping you have a fresh start in 2018. Make room in your life for new experiences this year. Out with the old, in with the new, as it were.

Here are 5 items to toss out for a clutter-free start to 2018.

Unused Toiletries

For whatever reason, we often end up with half-used and unwanted toiletries. Instead of letting them take over your bathroom, toss them all and reorganize the ones you actually use. A good rule of thumb is to toss out anything you haven’t used in the last month. To avoid feeling wasteful, offer unopened products to friends and family.

Old Towels and Linen

While you’re in the bathroom, get rid of another item that seems to accumulate over time. Throw away worn-out towels and bed linen. Animal shelters are often grateful for old towels, too.

Cookbooks

Cookbooks are often bulky and it’s rare to find one where you use more than a few of the recipes. To save space, photocopy the recipes that you do use and get rid of those giant tomes.

Sports Equipment

In the first burst of enthusiasm for a new sport, it is tempting to get all kitted out. But when that enthusiasm fades, sports equipment is often left gathering dust and taking up space.

Boxes and Packaging

It’s always tempting to keep the packaging from TVs, stereos, appliances and more. Sure, you think, it will come in handy if you want to resell the item, but the reality is it’s just clutter.

5 Real Estate Resolutions for 2019

It’s a new year, and as we say goodbye to 2017 and welcome in 2018, that also means a new beginning. For some people, that new beginning includes setting goals, like losing a few pounds or quitting some bad habits; but it’s also an opportunity for you to consider setting some goals around the real estate market. Here are 5 real estate resolutions for you to accomplish in 2018:

5. Build Your Real Estate Portfolio:

2017 brought a lot of changes to the real estate market, most notably, price adjustments and rule changes. If you’re a seller, that may not have worked out in your favour, but as a buyer, that means opportunities. If you have some equity saved, you should consider using it to purchase an investment property. My opinion is that even if you just break even with your rental income, it’s a solid investment for you to make.

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Top 3 Resolutions for Buyers for the New Year

A new year is a new beginning; and as part of that new beginning, a lot of people like to set resolutions for the new year. Whether it’s quitting smoking, losing weight, or saving money, people set all types of goals to work toward in the upcoming year.

If one of your goals is to buy a home, then here are 3 new years real estate resolutions for you to accomplish before you buy to help make sure your purchase is a successful one:

1. Meet with several real estate agents, and pick the best one for you.

Before you go seriously start looking for a house in-person, and over and above searching mls.ca, you’ll want to make sure you have a good real estate agent on your side. But there’s just so many of us out there, so how do you figure out which one is best for you? My advice is to meet with a few different real estate agents, ask them lots of questions, and pick the one that you feel the best and most comfortable with. Remember, you’re picking someone to help you with what will probably be the biggest purchase of your life!

2. Have your downpayment all saved up and ready to go.

In Vancouver, real estate comes on the market, and it goes off the market; quickly. When you find a home that you want to put an offer on, things will move fast. Remember how you’ve already met with your lender and gotten pre-approved? They’ll be able to tell you, based on your maximum purchase price, how much downpayment you’ll need; and then you’ll want to make sure that you have that amount in an account somewhere that you’ll have easy access to

3. Get pre-approved for a mortgage.

By meeting with a lender ahead of time, you can get yourself pre-approved so you’ll know exactly how much you can afford and exactly how much the bank will lend you; and when the time comes, you’ll be able to remove that financing clause from your offer. Let me me know if you need a referral to a great lender.

5 Ways to Save for a Down Payment!

If you’re working to save money for a down payment, here are tips to make it happen faster and easier.

1. Open a separate savings account

Having a separate savings account for your down payment is useful for a couple of reasons. Your down payment won’t be mixed with other funds and spent accidentally. It’s also easier to track your progress; just look at the account balance.

2. Set a date for your savings goal
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10 Pieces Of Personal Finance Wisdom We Owe To Gail Vaz-Oxlade

Gail Vaz-Oxlade, Canada’s no-nonsense money expert, retired last year (comfortably, we presume). And seeing as she made her exit while the debt-to-income ratio of Canadians crept towards a record high, Vaz-Oxlade’s trademark real-talk on saving, spending and expensive lattes is sadly missed. Here are some of Vaz-Oxlade’s wisest, timeless nuggets of personal finance wisdom.

Create spending priorities:

“Figure out what’s important to you. So what is it you really want? Is it eating out and spending time with your friends? Or do you want to own a home of your own? Decide, because you may not in fact want to own [a home] — you may simply be bowing to the pressures around you to own.”

Tax your fast-food:

“Keep a container in your car and every time you pick up a coffee, grab a sub or munch on a muffin, drop a buck in your bag. This will be your Fast Food Tax. Hey, if you can find the money for the coffee, you can find the money to save for your wedding too!”

Don’t leave the finances to one partner:

“It’s not unusual for one person to assume the nitty-gritty of daily finances…. The problem is that when one person is excluded, or totally abdicates responsibility, it means the other can mess things up with no monitoring or grow resentful at always having to do the detail…. Taking turns managing the chequebook, and having regular conversations so that both of you are clear about what’s going on, means you’re both in the know and working to the same ends. It also means that one person doesn’t have to deal with all the crap, while the other merrily laughs off the stress and frustration with, ‘You’re managing the money, so this is your problem to deal with.’ (Yes, there are dopes who say this.)”

Forget the fancy wine:

“$20 is about as much as you need to spend to get a great bottle of wine. And there are $10 bottles that taste great too! And if you’re going to be drinking all night, start with a more expensive $20 bottle, and then switch to the cheaper stuff later in the evening. Most people won’t notice.”

Don’t buy into retail therapy:

“Plastic is anesthetic — it dulls the pain, and then what happens is you just keep waiting for the next fake high.”

Cut the coffee:

“If you’re saving $20 a week by drinking less coffee (or taking it from home) and you’re 30 years old, eliminating that one bad habit will mean $84,000 in your pocket. Yup, $84,000! That’s some pretty expensive coffee.”

Be open with your partner about spending:

“I’m truly amazed at the number of people who hide stuff from their partners. They go shopping, bring home a bag of stuff, and rip off the tags — because, of course, their partners are morons and won’t recognize a new outfit when they see it…. If you can’t be open about what you’re buying, that should tell you something. If you think your partner is going to object to your spending, hey, listen up! And if you’re planning to mate and you haven’t sat down to talk about your money, you’re a fool, plain and simple.”

Don’t plan on early retirement:

“Life is for living. Saving is for the future. Doing either to the extreme, or neither for the sake of the other, is dumb. And so is the idea of spending the last 35 years of life doing nothing productive. Add 10 years back into the working equation and you not only put more money in your retirement savings pool, but you spend less years living on that pool of cash.”

Don’t use credit like as a back-up plan:

“If you bought that sales pitch that a line of credit (or any credit) is an emergency fund, you was fooled! Credit is debt waiting to happen and debt can be an emergency of its own. Sure, that line may see you through until you get another job. But then you’ll have to deal with getting that sucker paid off.”

Slow and steady is how you repay debt:

“One step at a time. You are on your way. Expect challenges. Keep your goal where you can see it.”

This piece was originally published in 2016 and updated in 2017.

By Katie Underwood

5 Annual check-up tips for your home!

I hate to use the F word but FALL is among us and there is no better time to start doing some annual check ups on your home before the cold weather kicks in and you’ll have every excuse not to get things done. Here are 5 things around the house to check annually. By being proactive with these listed items, I could actually help save you thousands of dollars down the road!!

Try to stay aware of potential issues that lurk in the furnace room, behind your walls and up on the roof. If you keep on top of your yearly maintenance, you won’t need to pay big bucks down the road to fix major problems. Here are some of my best tips for your home’s fall physical.

1. Green light

If you own an older home and your furnace is 20 years old or more, it’s well worth the investment to replace it with a high-efficiency Energy Star-rated model. If your furnace was installed no more than 10 years ago, look for ways to improve “the building envelope” to help reduce energy loss. Fall is a great time to check out the seals on windows and doors, for starters, and change your furnace’s filter. If you can, have an energy audit done every five years to keep tabs on the mechanical systems in your home.

2. All charged up

You should replace the batteries in your smoke and carbon monoxide detectors twice a year. A good rule to follow is to check your detectors when you change your clocks in the spring and fall. If you don’t have a carbon monoxide monitoring system in your home, please buy one. They cost less than $100 and have been proven to save lives.
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Protect Yourself – Reading Strata Documents Properly

Take the time to do your due diligence before you buy – it can save you thousands of dollars

Almost daily, CHOA advisors receive a call from a buyer claiming there is an upcoming major special levy for repairs or a condition in the bylaws that they knew nothing about. The new owner is shocked by the new information and frustrated that neither the agent nor the seller told them anything. Unfortunately, the buyers often come to realize the information was in their hands, but they failed to review the documents, they refused to obtain documents, or they ignored the risks. As a condo buyer, obtaining as many of the strata documents as possible, and taking the time to read them, is your best insurance against unexpected problems.

What to Ask For

Knowing what documents to obtain, where to get them and the critical information to look for is an essential part of the home-buying process. Most buyers begin with the Information Certificate (Form B). The form discloses the unit’s current monthly strata fees, money owing by the owner other than amounts paid into court, any agreements an owner has signed where they have taken responsibility for the cost of any alterations, amounts owed for a special levy that has already been approved, projections of deficits, balance of the contingency fund, approved bylaw amendments not yet filed in land titles, any three-quarter votes approved but not yet filed in land titles, any court proceedings, any judgments or orders against a strata,  work orders or notices on the strata lot, number of current rentals, parking stalls and storage lockers allocated to the strata lot, rules and current budget of the strata, an owner developer’s rental disclosure establishing exemptions, and the most recent depreciation report. 
That is the basic menu of information that has to be disclosed for every strata corporation. But you should also take a look at other documents available to buyers that are rarely requested. An owner, tenant, or person authorized to request documents such as the real estate agent is permitted to request historic documents that may provide a buyer with critical information.

Digging Deeper

A copy of the insurance policy for example, is a good indication of the risks managed by the strata. If the water escape deductible is $25,000, $50,000 or $100,000, it is a good bet there have been frequent claims in the building. Your next question as a buyer is: what’s the cause? If it is a result of failed plumbing systems that need to be upgraded, special levies are on the horizon. Ask questions. It may be the upgrades are complete and it’s a matter of a few years before the deductibles come down again. As an owner, you are exposed to those high deductibles as a common expense for the strata, and personally if the cause of a flood is from your strata lot. 
The Strata Property Act also now requires strata corporations to maintain copies of any reports obtained by the strata corporation respecting repair and maintenance of major items, including engineering reports, risk management reports, sanitation reports, and environmental assessments. If there has been asbestos testing on the building, the strata must retain a copy of that report.

Go Back Two Years in the Strata Minutes

If you request and read the strata minutes of council meetings and general meetings for at least the past two years, they should provide you with a sense of the strata business. Make a list of maintenance, emergencies, long-term planning decisions, insurance claims, and funding decisions. You can cross reference them in the documents you receive. Sterile minutes where nothing happens is a strata that is generally hiding something.
“Buyer beware” for condo buyers should read, “buyer be aware.” If the strata corporation is not providing a document requested, or there is confusion about allocation of parking or storage, or there is missing information, you might want to rethink your decision. Read everything and if in doubt request more information. Five hours of your time could end up in you avoiding a $55,000 special levy.

Tony Gioventu
 Condominium Home Owners Association. Courtesy of REW.com