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HST does not apply to resale homes in Ontario

Ontario Revenue Minister, Sophia Aggelonitis and the Immediate Past President of the Ontario Real Estate Association, Dorothy Mason, appear together in a video that explains to prospective home buyers a few important facts about the HST, as it relates to the provincial housing market.

The video, which was released on March 21st 2011, highlights the fact that there is no HST on the purchase price of resale homes in Ontario. Sales tax did not apply to the purchase price of resale homes under the previous PST, and it does not apply under the HST.

For new housing, additional tax only applies to the portion of the price above $400,000.

The Ontario Enhanced New Housing Rebate means that buyers of new homes receive a rebate of up to $24,000 regardless of the price of the new home. Buyers of new homes priced up to $400,000 (about three-quarters of new homes built in Ontario) on average pay no more – and possibly even less – tax than under the previous PST, where sales tax was hidden in the price.

Click here to read the full news release of OREA.

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Lower inflation in February likely to keep interest rates low

Canada’s annual inflation rate fell slightly in February, giving the Bank of Canada room to keep interest rates low over the next few months, economists say.

Statistics Canada said Friday its consumer price index edged down one-tenth of a point to 2.2 per cent in February, with rising energy and gas prices keeping inflation just above the Bank of Canada’s ideal two per cent target.

The core inflation rate, which excludes volatile items such as gas and food, fell to 0.9 per cent — its lowest level since the government started keeping records in 1984. Economists had predicted an annual core rate of 1.1 per cent and annual inflation to remain at the January level of 2.3 per cent.

It all means the country’s central bank might take its time when it comes to raising interest rates, said CIBC World Markets economist Emanuella Enenajor.

“These (inflation) numbers certainly make it less likely that a May rate hike could happen, we do have to admit,” she said.

“Such a soft core number suggests there’s less pressure for the Bank of Canada to really start hiking rates aggressively so it gives it a little more leeway.”

She said CIBC is for now sticking with its prediction that Canadians will see rates go above the current one per cent in May and that they will end up at two per cent by the end of the year.

Canada’s economic growth surpassed expectations in the last half of 2010 and the Bank of Canada may want to get ahead of any resulting spike in prices by raising interest rates and cooling lending conditions, she said.

Doug Porter, deputy chief economist at BMO Capital Markets said he believes the central bank is likely to stick with lower rates for the short term.

“Both headline and core inflation have eased since the start of the year, at least partly thanks to the lofty loonie,” he wrote in a note to investors, pointing out that Canada’s core inflation rate is lower than that of the U.S. and rest of the world.

“This is set to reverse next month, as Canada gets with the global program, but the low starting point is very favourable. Suffice it to say that this keeps the pressure well off the Bank of Canada to get back in tightening mode any time soon.”

Enenajor said the March inflation rate will likely depend on oil price movement during the rest of the month.

“However, expect both the annual headline and core rate to move higher in March on a year-on-year basis,” she said.

Prices were higher in February in six of the eight major categories tracked by the agency, but items like women’s clothing, footwear and travel tours cost less than a year earlier.

On a month-to-month basis, consumer goods were 0.3 per cent more expensive last month than in January, mostly due to higher energy and gasoline prices. Canadians paid 10.6 per cent more for energy during the year leading up to February, after posting a nine per cent increase in January.

Gas prices soared 15.7 per cent last month, on top of the already recorded 13 per cent increase in the 12 months leading up to January.

On a regional basis, Nova Scotia remained the province with the highest inflation rate at 3.4 per cent. Many people in that province use oil and other fuel to heat their homes.

Alberta continued to enjoy the most stable prices, with an inflation rate of 1.2 per cent.

Drivers in every province except Manitoba faced double-digit price increases for gasoline on a year-over-year basis. The price at the pumps was up 15.7 per cent from a year earlier.

The Canadian Press http://www.therecord.com/news/business/article/503435–lower-inflation-in-february-likely-to-keep-interest-rates-low

Century 21 iPhone app available

The Century21.ca tri-lingual iPhone App is now live in the iTunes App store. Download it here: http://tinyurl.com/2be2fxd

First Time Homebuyer Tips

First-Time Home Buyers’ (FTHB) Tax Credit

The costs associated with purchasing a home, such as legal fees, disbursements and land transfer taxes, can be a particular burden for first-time homebuyers who must pay these costs, as well as save money for a down payment. To assist first-time homebuyers with the costs associated with the purchase of a home, the Government of Canada introduced a FTHB Tax Credit in 2009 — a $5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009. For an eligible individual , the credit will provide up to $750 in federal tax relief starting in 2009.

Expansion of the Home Buyers’ Plan (HBP)

To provide first-time homebuyers with greater access to their RRSP savings to purchase or build a home, the Government of Canada has increased the Home Buyers’ Plan withdrawal limit to $25,000 from $20,000 per person for withdrawals made after January 27, 2009.

To obtain more information on the First-Time Home Buyers’ Tax Credit and the Home Buyers’ Plan, call 1-800-O-Canada or visit the Canada Revenue Agency website at www.cra.gc.ca .
Land Transfer Tax Rebate.

The qualifying purchaser will receive a rebate to the land transfer tax this is applied to the home purchase. The maximum allowance is $2000.00. Examples:

Cost of Home	Tax Payable	Tax Refund	Net Tax Payable
$100,000	$725	$725	$0
$200,000	$1,725	$1,725	$0
$300,000	$2,975	$2,000	$975

Why Home Buyers Should Use a Professional Real Estate Agent (Realtor)

A realtor will save you time and money

When it comes to purchasing a home, most people don’t know where to begin. Usually, people who are interested in moving to a particular area will contact a Century 21 office located near where they intend to move. This is by far the easiest and most streamlined approach to purchasing a home. However, some people feel as if they have the ability to purchase a home without the help of a realtor. While it is possible, it is highly recommended to enlist the help of a professional – it will save you time, money and headaches in the long run.

If you try to purchase a home on your own and aren’t positive about the details of home buying/selling, you could very well end up losing money on the deal. With all the hidden costs and potential misses that can occur when you purchase a home (especially if it isn’t a new home), you want to be sure you’re getting the best deal possible. Putting the responsibility in your hands entirely is generally considered to be a bad idea.

Real estate agents are highly trained in the market, and know the ins and outs of the business, including what to look for when purchasing a home and how to get you the best price possible. Without the help of a realtor, you may well miss these important yet subtle details. A realtor will make the process of buying a home more fun , exciting and a lot less stressful. Buyers should always consider using a professional real estate agent as opposed to going it alone.

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