The Honourable Jim Flaherty, Minister of Finance, today announced a number of measured steps to support the long-term stability of Canada's housing market and continue to encourage home ownership for Canadians.
"Canada's housing market is healthy, stable and supported by our country's solid economic fundamentals," said Minister Flaherty. "However, a key lesson of the global financial crisis is that early policy action can help prevent negative trends from developing."
The Government will therefore adjust the rules for government-backed insured mortgages as follows:
Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.
Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.
Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.
"There's no clear evidence of a housing bubble, but we're taking proactive, prudent and cautious steps today to help prevent one. Our Government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it," said Minister Flaherty. "If some lenders aren't willing to act themselves, we will act. These measures demonstrate the Government is committed to taking action when necessary to support the long-term stability of a sector that is so vital to our economy and the financial well-being of Canadian families."
These adjustments to the mortgage insurance guarantee framework are intended to come into force on April 19, 2010.
Source: Mortgage Brokers Ottawa
Wednesday, February 24, 2010
Friday, February 19, 2010
Mandatory Home Energy Audits
Just a little update!
Members should be aware that regulations for mandatory home energy audits have not yet been created and there is currently no schedule for implementation of that section of the Green Energy Act. The pertinent regulations may be drafted in the upcoming session of Provincial Parliament. Members will recall that a waiver clause was inserted in the legislation, thanks to lobbying efforts by the Ontario Real Estate Association and our own Government Relations Committee, which will allow a buyer to waive, in writing, his or her right to an energy audit. The Board will keep an eye on this issue and advise members when the regulations are created and an implementation date is set.
Mary-Anne
Source: The Ottawa Real Estate Board
Members should be aware that regulations for mandatory home energy audits have not yet been created and there is currently no schedule for implementation of that section of the Green Energy Act. The pertinent regulations may be drafted in the upcoming session of Provincial Parliament. Members will recall that a waiver clause was inserted in the legislation, thanks to lobbying efforts by the Ontario Real Estate Association and our own Government Relations Committee, which will allow a buyer to waive, in writing, his or her right to an energy audit. The Board will keep an eye on this issue and advise members when the regulations are created and an implementation date is set.
Mary-Anne
Source: The Ottawa Real Estate Board
Friday, February 12, 2010
Buyer's Beware of Restrictions on Income Properties!
Many homebuyers consider purchasing a property with an existing or potential for a second suite. First-time homebuyers in particular often hope to take advantage of the extra income a second suite, often a basement apartment, can generate. Financial advantages can be great, but the buyer needs to know the legal implications.
Whether a suite is a legal second suite will depend on building code and fire code issues and municipal zoning bylaws. Although bylaws across Ontario are generally similar, each municipality has its own variations. Any landlord that violates the bylaws faces fines of up to $50,000 and one year in prison. REALTORS® should encourage their clients to visit a municipality’s website, or to speak to a lawyer located in the area.
If a buyer intends to create a second suite, he needs to determine whether the home qualifies under the bylaws of the specific municipality. If the home does not meet these requirements, the potential buyer must determine whether he is willing to make the necessary changes to create a legal apartment. A building permit is always needed, even in cases where construction will not be taking place.
If a home currently has a second suite, it is important to determine whether the existing unit meets the municipality’s requirements. The municipality will inspect the unit to determine whether it is fit for habitation and whether it meets established standards. Both new and existing units require a General Inspection for Fire Code Compliance.
The cost of retrofitting a home depends on the home’s condition. Assuming a renovation expense of $25,000 and net rental income of $500 a month, the return on investment will be 24 per cent. The investment will pay itself back in just over four years.
Rent collected from a second suite must be declared as income. However, landlords can deduct direct expenses (directly related to operating the rental unit, e.g. replacing appliances) and indirect expenses (costs shared with the entire house, e.g. utilities and mortgage interest) needed to operate the suite. Direct expenses are 100 per cent deductible; indirect expenses are deducted on the portion of the home assigned to the rental unit.
Landlords can also deduct capital cost allowance (CCA), commonly known as depreciation, from their income. CCA is permitted on any long-term purchase, such as renovations or appliances. The consequences of claiming CCA must be considered carefully. The equity earned when selling a principal residence is not taxed. However, once CCA is claimed, the area dedicated to the second suite is no longer considered personal residence. Therefore, a homeowner would forego any tax benefits from the sale of the property on the second suite portion of the home.
As in any transaction, REALTORS® need to be sure to provide their clients with information that is accurate and not misleading.
If you have any questions please feel free to contact me at mgillespie@kwottawa.ca
Your Real Estate Professional,
Mary-Anne
Source: OREA Newsletter 2010
Whether a suite is a legal second suite will depend on building code and fire code issues and municipal zoning bylaws. Although bylaws across Ontario are generally similar, each municipality has its own variations. Any landlord that violates the bylaws faces fines of up to $50,000 and one year in prison. REALTORS® should encourage their clients to visit a municipality’s website, or to speak to a lawyer located in the area.
If a buyer intends to create a second suite, he needs to determine whether the home qualifies under the bylaws of the specific municipality. If the home does not meet these requirements, the potential buyer must determine whether he is willing to make the necessary changes to create a legal apartment. A building permit is always needed, even in cases where construction will not be taking place.
If a home currently has a second suite, it is important to determine whether the existing unit meets the municipality’s requirements. The municipality will inspect the unit to determine whether it is fit for habitation and whether it meets established standards. Both new and existing units require a General Inspection for Fire Code Compliance.
The cost of retrofitting a home depends on the home’s condition. Assuming a renovation expense of $25,000 and net rental income of $500 a month, the return on investment will be 24 per cent. The investment will pay itself back in just over four years.
Rent collected from a second suite must be declared as income. However, landlords can deduct direct expenses (directly related to operating the rental unit, e.g. replacing appliances) and indirect expenses (costs shared with the entire house, e.g. utilities and mortgage interest) needed to operate the suite. Direct expenses are 100 per cent deductible; indirect expenses are deducted on the portion of the home assigned to the rental unit.
Landlords can also deduct capital cost allowance (CCA), commonly known as depreciation, from their income. CCA is permitted on any long-term purchase, such as renovations or appliances. The consequences of claiming CCA must be considered carefully. The equity earned when selling a principal residence is not taxed. However, once CCA is claimed, the area dedicated to the second suite is no longer considered personal residence. Therefore, a homeowner would forego any tax benefits from the sale of the property on the second suite portion of the home.
As in any transaction, REALTORS® need to be sure to provide their clients with information that is accurate and not misleading.
If you have any questions please feel free to contact me at mgillespie@kwottawa.ca
Your Real Estate Professional,
Mary-Anne
Source: OREA Newsletter 2010
Friday, February 5, 2010
**Hot News for East Enders and Orleans**
The other night I was with our local councillor Bob Monette and he announced that Orleans is the host of the Carivibe Celebration!
Orleans will be hosting it for the first time for the Nations Capital!!
Carivibe is the kick off to the summers most extravagant Caribbean celebration! A parade with amazing costumes and huge beach party at Petrie Island.
First hand I saw a sample of the performance with steel drums and amazing costumes. It was full of energy to say the least.¸
There will be so much amazing Caribbean culture showcased at the Island I can`t think of a better place!
For further information see me or go to www.carivibe.com to win free tickets to this outstanding event!
Another great reason to move to Orleans!!
Mary-Anne
Orleans will be hosting it for the first time for the Nations Capital!!
Carivibe is the kick off to the summers most extravagant Caribbean celebration! A parade with amazing costumes and huge beach party at Petrie Island.
First hand I saw a sample of the performance with steel drums and amazing costumes. It was full of energy to say the least.¸
There will be so much amazing Caribbean culture showcased at the Island I can`t think of a better place!
For further information see me or go to www.carivibe.com to win free tickets to this outstanding event!
Another great reason to move to Orleans!!
Mary-Anne
Subscribe to:
Comments (Atom)
