If the term “Home Renovation Tax Credit” brings to mind images of detached houses in the suburbs and not units in sky-high buildings, you’re not alone. Many condo owners are paying little attention to the credit when they could be reaping the benefits.

In fact, there are many opportunities for condo owners to claim the credit, including some outside of their own units.

Condo owners can claim a portion of improvements made to their building between Jan. 27, 2009 and Feb. 1, 2010, as long as they were at least partially responsible for paying for the upgrades.

Here’s how it works:

Assuming each condo owner pays a monthly fee to a condo corporation, repairs or renovations completed and paid for with that money should count toward the HRTC. The condo corporation is simply paying for these goods and services on behalf of all of the unit owners.

Condo corporations are unable to claim the credit because it is available only to individuals, so it’s up to each person to claim his or her portion.

Therefore, on their 2009 taxes, condo owners can claim the credit for renovations to their own unit – similar to what would be done in a detached home, for example – as well as their share of any renovations to common areas paid for by the condo corporation.

This could include anything from new windows installed in your building to a redesigned lobby area or improved landscaping.

Add these shared costs with renovations you may have done to your individual unit (bathroom or kitchen upgrades, new fixtures, painting) and you could significantly increase your credit.

Canada Revenue Agency guidelines for condo owners indicate that improvements made to common areas will qualify if:

– You own your unit. Renters are out of luck, even if they pay similar monthly fees.

– “The expenses would be eligible expenses if the common areas were treated as an eligible dwelling” – if new furniture wouldn’t count in a detached home, it won’t count in a condo either.

– Your condo corporation has notified you of your share of the expenses.

As a reminder, the tax credit applies to renovation costs over $1,000 and under $10,000, so if you spent a few hundred dollars on your own unit and the condo corporation spent a few hundred more on your behalf, that may be the difference between getting a return or not.

What you’ll need to make the claim:

Since you’re not dealing directly with stores or contractors and won’t receive original receipts or invoices, in order to claim your portion of building renovations you need documentation from your condo corporation. This can be in the form of a letter and must be signed.

Most condo corporations have a set of guidelines that help them determine the allocation of expenses for common areas. It is this documentation that will guide them in establishing each condo owner’s contributions to renovations and therefore how much people can claim.

According to Canada Revenue Agency, the documentation “must clearly identify the type and quantity of goods purchased or services provided” and also include the following:

– The cost of the renovations

– Your portion of the expenses (exactly how much you are considered to have contributed)

– Contact information for the vendor or contractor (including GST/HST number, if applicable)

– A description of the work in question

– The date or dates the work was completed.

If you do not receive documentation for improvements to your building, it is worth asking about. It could mean a few more dollars in your pocket!

“After a slow start to the year, existing home sales rebounded during the second half of 2009,”
said TREB President Tom Lebour. “As consumer confidence improved, many households
moved to take advantage of affordable home ownership opportunities in the GTA. The strong
residential real estate sector was a key contributor to overall economic recovery in Canada.”
The average home price in 2009 climbed four per cent to $395,460. The average price for
December transactions was $411,931.

“Market conditions became very tight in the latter half of 2009. Sales climbed strongly relative to
the number of homes listed for sale, resulting in robust price growth that more than offset
average price declines in the winter,” said Jason Mercer, TREB’s Senior Manager of Market
Analysis. “A greater supply of listings in 2010 will see home prices grow at a sustainable pace.”

For full statistics for Toronto Real Estate Market December 2009 click here.

Greater Toronto REALTORS® are passionate about their work. They adhere to a strict Code of Ethics
and share a state-of-the-art Multiple Listing Service. Serving over 29,000 Members in the Greater
Toronto Area, the Toronto Real Estate Board is Canada’s largest real estate board. Greater Toronto Area
open house listings are now available on www.TorontoRealEstateBoard.com.

We had the honour of entertaining guests from Virginia and as far away as The Netherlands. We’ve also made some new friends and reconnected with old ones. Other than my broken toe in November we’ve enjoyed a year of good health and have managed to weather the recession. Playing the piano has come back into our lives which I enjoy playing although I am a bit rusty. Laird is learning to play himself but won’t let me hear yet. I can’t wait until that day.

Business wise 2009 has been a year of blessings. Although from a transactional standpoint challenges existed for the first three quarters of the year, the end of the year is proving to be fruitful with results becoming tangible in the first quarter of 2010. Some of you may know that I joined Keith & Jen Burton’s Royal LePage Brokerage in March. Without a doubt it has been the best career move I’ve made so far in my real estate career. It’s opened up a world of choices and education I never knew existed within the industry. Hats off and my sincerest of gratitude to Jen, Keith, and Royal LePage.

It’s been a busy year education / course wide. Some of the courses I’ve embarked on are: Recognizing Structural Deficiencies in Homes, Privacy, Title Insurance, Pricing to Sell, Complying with Privacy, Condominiums, and of course Brian Bufinni’s: 100 Days to Greatness. Buffini teaches about relationship management an ever increasing aspect of life and business. Speaking of business relationships I’ve made some great new connections to help me improve the level of service and choice to clients, customers, and even friends. Be on the look out for more information.

Selltoronto.ca has seen a tremendous amount of growth this year with content added more frequently AND a new video blog. I’ve decided to try my hand at acting! Well not really. Just wanting to explore all avenues of the Internet and offer more value. Be on the look out for more exciting features to be offered on it. I’m currently working on putting together a service directory to display on Selltoronto as well as an expansion of the neighbourhoods section.

So that’s a quick recap of 2009. I would like to take this moment to thank everyone for their ongoing support and business. Without you I would be nothing.

Wishing you a prosperous 2010!

Tim

Wood-burning
Wood-burning fireplaces are great for those who love the majesty of an open fire, the smell of burning wood, and the sound of crackling logs.   However, you may not know that older wood-burning fireplaces are not very energy efficient and can actually pollute the environment.  The good news is that there are newer, safer, and more advanced wood-burning fireplaces available.  Look for models that are certified by the U.S. Environmental Protection Agency (EPA)*, as they emit 90% less smoke than traditional wood-burning fireplaces and distribute heat better in your home.

Electric
Electric fireplaces are the perfect way to set the mood, and temperature, at the flick of a switch.  They are safe, convenient, low-maintenance, and cost little to install.  Although electric fireplaces probably won’t add to the value of your home like other types might, they are great for small spaces and don’t require a chimney or outdoor venting.  Most models also come with the option of having the decorative fire turned on while the heating element is off: a great feature if all you’re looking for is a little ambiance.

Gas
Gas fireplaces are popular options because they are clean burning, efficient, and don’t even require a chimney.  Although they may not offer the same flame sensation as real wood-burning fireplaces, gas is more energy efficient and you won’t need to worry about cleaning up woodchips or ashes.  They also distribute heat better and provide a constant supply of fuel, even if the power fails.  Look for models that have an Annual Fuel Utilization Efficiency (AFUE) rating; the higher the rating, the higher the efficiency.

Other Options
If you already own a fairly old or outdated fireplace, there are still options available.  Electric and gas models, for example, are easy to upgrade or replace entirely if you’re looking to make your fireplace more energy efficient.  Similarly, you can purchase inserts for traditional wood-burning fireplaces that cause less harm to the environment and improve heating efficiency.  And if you want to experience an open fire a little closer to nature, consider buying an outdoor fireplace.  Outdoor fireplaces come in many shapes and sizes; just make sure to check your local municipality’s by-laws for safety regulations.

*Note: The standards set by the U.S. Environmental Protection Agency are also applicable in Canada.

Source: Royal LePage Estate Realty: Brokerage
Updated March 2008

The conveyance of real property results in the payment of certain expenses by the parties involved. Set forth below is brief summary of theses expenses, that are incurred when transactions are handled properly and professionally, viewed both from the position of the Buyer and from the position of the Seller. Buyers should budget approximately 2-3% of the purchase price for closing costs.

Provincial Land Transfer Tax

This is paid by the Buyer at the date of the final closing to the Minister of Finance pursuant to the Land Transfer Tax Act. The tax is based on the purchase price and the current rates became effective on June 1st,1989.

The rates are as follows for a single family residence:

$0 – $55,000 .5% (0.5% of $55,000 is $275)
$55,001 – $250,000 1% less $275
$250,001 – $400,000 1.5% less $1,525
$400,001 and up 2.0% less $3,525

Example: To calculate the land transfer tax on a purchase price of $275,000, multiply the purchase price by 1.5% and deduct $1,525 ($4,125 – $1,525 = $2,600)

FIRST-TIME Buyers of both new and re-sale homes are eligible for a rebate of the provincial land transfer tax of up to $2,000.
The Ministry of Finance has indicated that, until the legislation regarding this rebate is passed, first time buyers can submit their applications for the refund and they will be processed once the legislation has passed.

Toronto Land Transfer Tax

This is paid by the Buyer at the date of the final closing to the City of Toronto. The tax is based on the purchase price and the current rates became effective on February 1, 2008.

Residential:
· 0.5% of the amount of the purchase price up to and including $55,000
· 1% of the amount of the purchase price between $55,000 and $400,000
· 2% of the amount of the purchase price above $400,000
FIRST-TIME home buyers of new AND re-sale homes will receive a rebate of the Toronto land transfer tax of up to $3,725 (this equals a 100% rebate on homes purchased for up to $400,000) for purchases of more than $400,000.

Disbursements – Purchase

In addition to the payment of Land Transfer Tax, Buyers are responsible to pay for certain disbursements incurred by their lawyer in respect of various certificates, searches and registrations. Examples of such approximate disbursements are as follows:

i) Registration of Deed $ 70.50
ii) Registration of Mortgage $ 70.50
iii) Disbursements (including search costs & office costs) $400.00

For a typical purchase (including one mortgage), a Buyer should budget about $550.00 for disbursements. There will also be further costs for adjustments, land transfer taxes and legal fees.

Title Insurance

Title insurance insures against past problems that could affect your ownership in the future. A low, one-time premium covers you for loss or damage up to the policy amount and all legal costs you would have to pay to defend your title. Once the policy is issued, a covered title problem is not your concern, it becomes the responsibility of the Title Insurance Company. No survey is required by your lending institution if you have title insurance.

Houses up to six units up to $750,000  – $135.00
Houses up to six units over $750,000 – $135.00 + .99/$1000 over $750,000
Condominiums up to $750,000 – $100.00
Condominiums over $750,000 – $100.00 +.99/$1000 over $750,000

Disbursements – Sale

The Seller in a real estate transaction is not required to pay any Land Transfer Tax. However, the Seller’s responsible to pay for certain disbursements incurred by their lawyer such as:

Registration of a Discharge of Mortgage – $ 70.50
Disbursements (including transaction levy and office costs) – $200.00

Legal Fees – Normal

Approximation of average legal fees on a residential real estate transaction is as follows:

Purchase – $650 to $750 for purchase price up to $750,000
Sale – $550 to $650 for sale price up to $750,000

Adjustments on Closing Between Seller and Buyer

On closing there will be adjustments to the sale price between the Seller and the Buyer which will appear on a Statement of Adjustments as credits in favor of the Seller or the Buyer. If the Seller is relying on receiving or if the Buyer is relying on paying a fixed amount on closing, it is unpleasant if these adjustments come as a total surprise to your client.

For example, if taxes for the calendar year are $4,000.00, the deal closes June 30th and the Seller has paid the taxes for the entire calendar year, there will a credit on closing to the Seller of $2000.00. In other words, the Seller receives $2000.00 more and the Buyer pays $2000.00 more.

Also, if there is a fuel tank at the property, the Seller usually fills the tank on closing and sells a full tank to the Buyer. If the adjustment were approximately 52 cents per litre for 909 litres, the Seller would receive $450.00 more and the Buyer pay $450.00 more on closing.

Survey

Most financial mortgage institutions now require a Buyer to produce a recent survey for the real property being purchased showing the boundaries of the lands and the location of the dwelling thereon. The term “recent” varies from lending institution to lending institution but as a loose rule a survey 10-15 years old will probably still be acceptable to a lender if accompanied by a Declaration of the Seller saying it is still accurate. If the Buyer requires a survey for the lender and the Seller does not have one, it is the responsibility and the expense of the Buyer not the Seller to have a new one prepared by an Ontario Land Surveyor.

Title insurance will take care of the problems incurred in the absence of a survey or an up to date survey! It is highly recommended that title insurance be obtained in the absence of a survey.z

Mortgage Insurance

In the event that the amount of your first Mortgage on your purchase transaction exceeds 75% of the purchase price, it will be necessary for you to purchase, for the protection of the Lender, mortgage loan insurance. This mortgage loan insurance premium that is paid is to protect the lender in the event that the mortgage is not paid. This is not to be confused with life, disability, or job loss insurance.

The mortgage insurance is normally purchased through CMHC (Canada Mortgage and Housing Corporation) or GEMI (GE Capital Mortgage Insurance Canada.) The cost of the insurance premium is paid by the Buyer. The amount of the mortgage insurance premium is calculated using a loan/value ratio, and may be added to the mortgage amount. The premiums are as follows:
a) 75% to 80%                1. %
b) 80% to 85%                1.75%
c) 85% to 90%                2.00%
d) 90% to 95%                2.75%-2.90%
e) 95% to 100%              3.40%

Other high ratio financing costs include an application/appraisal of $165 and there is 8% provincial sales tax on the mortgage insurance premium to be paid by the borrower as set forth above. While the mortgage insurance premium can be added into the amount of the Mortgage, the provincial sale tax on the premium is payable immediately at the time of the advance of the mortgage funds.

Building Inspection Fees or Home Inspection Fees

It is generally recommended that when purchasing a resale home or new construction that a building inspection be carried out on the structure, either prior to making an offer on the property or at the time you have entered into the Agreement of Purchase and Sale. The fee for a normal building inspection can range from $250.00 to $500.00.

Home Staging Fees

A home staging consultation can run between $150.00 and $350.00. Additional costs are dependent upon the amount of staging done and upon who is responsible for completing the work.

NOTE: Royal LePage Estate Realty does not take any responsibility for the accuracy of the costs listed above. The costs are to give you an idea of the approximate expense range. As a professional realtor, it is incumbent upon you to verify any costs that you will be using in your representation to buyers and sellers so as not to misrepresent. Also use an approximate range of value instead of one fixed amount. As mentioned previously, Buyers should budget 2-3% of the purchase price for closing costs.

In October 2009, Greater Toronto REALTORS® reported 8,476 sales, up 64 per cent from October 2008. The average price for October transactions was $423,559 – up by 20 per cent compared to the same month last year.

“Strong sales growth has occurred across many property classes – from price ranges that would attract first-time buyers to luxury properties selling for over one milliondollars,” said TREB President Tom Lebour. “The highest rate of sales growth in October was experienced for properties selling for over $750,000. In contrast, luxury home sales
declined at an above-average rate last year.”

Year-to-date sales, at 74,721, were up nine per cent compared to the first ten months of 2008. Average price, at $392,264 was up by almost three per cent.

“After a short dip in the winter, the average home price in the GTA has rebounded because sales have been high relative to listings,” according to Jason Mercer, TREB’s Senior Manager of Market Analysis. “Watch for listings to rebound in 2010 as home owners react to the strong sales and price growth experienced in the latter half of this
year.”

For full October Market Watch click here.

Source: Toronto Real Estate Board
Greater Toronto REALTORS® are passionate about their work. They adhere to a strict Code of Ethics
and share a state-of-the-art Multiple Listing Service. Serving over 28,000 Members in the Greater
Toronto Area, the Toronto Real Estate Board is Canada’s largest real estate board. Greater Toronto Area
open house listings are now available on www.TorontoRealEstateBoard.com.