There appears to be a lot of confusion in the market with regards to the recent "rule" changes announced by the Bank of Canada, and the pending introduction of the Harmonized Sales Tax (HST). Unfortunately the press has done a poor job of conveying these changes, therefore there is a lot of confusion with the public that could have a negative influence our economy and our businesses. It is important that all my clients understand all these changes and the impact it will have on them.
While some rule changes have been introduced from the Bank of Canada and CMHC, the most important thing is what has not changed. There is no change to home buyers purchasing with only 5% down.ALL CONSUMERS WHETHER THEY ARE A FIRST TIME HOME BUYER, OR A REPEAT HOME BUYER, THEY CAN STILL PURCHASE WITH ONLY 5% DOWN.
Broadly speaking, the plan unveiled has three components.
1. CMHC will require that all borrowers meet the standards for a five-year fixed-rate mortgage, even if they choose a variable mortgage with a lower rate or a shorter term.
This provision has been put in place to guard against higher rates in the future.
2. The rules would lower the maximum Canadians can withdraw when refinancing their mortgages to 90 per cent of the value of their home, from 95 per cent.
This was done to prevent home owners using their home as an "ATM", or clients who repeatedly refinance their home as they get themselves over-extended on credit
3. CMHC will now require a minimum 20 per cent down payment to qualify for CMHC insurance for non-owner-occupied properties purchased as an investment.
This last rule is aimed at reining in would-be real estate speculators who own multiple properties beyond their primary residence.
New Housing Rebates - Who will pay this new tax?
* HST willnot apply on the purchase price of re-sale homes.
* HST will not apply on CMHC premiums. CMHC premium will continue to be subject to PST only.
* HST will apply to services such as moving cost, legal fees, home inspection fees, and Real Estate commissions.
Yes, this tax will affect resale properties indirectly with the additional costs added to the services associated with buying and selling a home. So it's not just a concern for "new home" buyers.
* HST will be applied on the purchase of new homes. However, homebuyers will be able to receive a rebate of a portion of the provincial tax for new homes priced up to $500,000. The rebate for new primary residences under $400,000 will be six percent of the purchase price (or 75 percent of the provincial portion of the tax), with the rebate amount reduced for homes priced between $400,000 and $500,000.
Buyers of new residential rental properties will receive a similar rebate.
If I can be of any assistance to you , your family and friends , please do not hesitate to contact me through the office, or directly at 416-704-5608.
BUYING HOME CHECKLIST
HOME VALUES
If you are buying a home, then, before you decide on whether this home is your dream home, the following checklist will help you look at prospective homes with a critical eye. We suggest printing this page and putting it on a clipboard. When you find a home that really interests you, mark the features you see and note their general condition on this list.
Home value sometimes referred to as "Value in Use", is best described as the probable price at which a home trades in a free, competitive, and open market and is synonymous with the market value.
SELLING YOUR HOME ON YOUR OWN - OR USING A REAL ESTATE SALESPERSON
HOW DO REAL ESTATE PROS PRICE A LISTING?
If you have decided that now is the time to sell your home, you might be thinking: should I hire a Real Estate Sales Representative or do it alone. Have you ever considered repairing your own car? Anyone can buy the tools and parts. However, most of us just do not have the knowledge, training, experience or the expertise and commitment of time to do the job properly. Besides, there are plenty of experienced professionals to do the work for us.
A very accurate saying is that "Any home will sell once you get the price right." Of course, this is usually said from the perspective of dropping a price until it's too attractive to pass up. Actually, the accurate pricing of your home prior to listing is as much an art as it is a science.
