Harmonized Tax is here…so what does it really mean???

Ontario’s REALTORS(R) say the McGuinty governments plan to harmonize the GST and PST will add over $2,000 to the cost of a real estate transaction, hurting the resale home market and prolonging the housing industry’s recovery from the current economic downturn.

“Now is not the time to be erecting barriers to homeownership,” said Pauline Aunger, President of the Ontario Real Estate Association. “We need consumers to invest in housing to help get our economy going again.”

According to the Canadian Real Estate Association, home sales in the province of Ontario were down 29 per cent in February, compared to 2008.

Under a harmonized sales tax (HST), home buyers and sellers will have to pay extra tax on a range of services associated with real estate transactions such as legal fees, moving costs, real estate commissions and home inspection fees. Currently, consumers only pay the 5% Goods and Services Tax (GST) on these services.

“These additional taxes could price some homebuyers, especially first-time homebuyers, right out of the market,” explained Mrs. Aunger. “Harmonizing will not help homebuyers in any way.”

For a resale house priced at $360,000, a HST could add over two thousand dollars in new taxes to closing costs. In total, a HST will add $313 million annually in new taxes to resale home transactions. “In the last decade, Ontario’s homeowners have faced a barrage of new costs,” said Aunger. “From municipal land transfer taxes to sky rocketing property taxes, homeowners are being pushed to the brink to accommodate increasing demands from government. A harmonized sales tax is yet another cash grab on Ontario’s already overtaxed homeowners.”

[youtube]http://www.youtube.com/watch?v=G9IokTytLlw[/youtube]

Home Buyer's Checklist

Here are just a few things that you Buyer’s out there should consider when you are looking at that dream home:

Check zoning, building regulations and municipal plans for the area. They may affect any plans you may have for additions or renovations.
Estimate the resale potential of the house. This is an important consideration, especially if you may need to relocate again soon.
Drive through the area and evaluate the level of essential services. Check transportation and shopping facilities. Look at the proximity and types of schools in the area.
Carefully examine all aspects of the house’s construction, including plumbing, wiring and foundation walls. Bring along an expert if you feel unable to assess these properly. We have seen more and more clients exercising a house inspection company to look at the home in detail. Ask your realtor for the name of a reputable firm. Costs vary but are in the $300. range and the inspection provides a level of comfort which can be well worth the cost.
Try to determine what repairs you may be faced with over the coming years. Check the condition of the roof, capacity of electrical services, age of furnace and driveway paving. If you think your space needs may change, look for renovation potential – size of lot, exposure, room layout and so on.
Consider all expenditures you may have to make over and above actual purchase cost; repairs, furniture, landscaping, renovations, decorating and moving.
Be prepared for unexpected costs such as legal and survey costs, appraisal fees, land transfer tax and be aware of increased monthly costs like water, gas and electricity bills, especially when moving into a larger home.

Energy Audit – Part I

The provincial government has introduced legislation, Bill 150, the Green Energy Act, which, if passed, would require mandatory home energy audits prior to the sale of a home. This legislation has not yet been passed and is not yet in effect.

Details

Under the proposed Green Energy Act, home owners would be required to provide information regarding the home’s energy efficiency prior to the sale or lease of the property. Energy efficiency information about the property would have to be determined and provided by standardized methods established by the provincial government.

The Province has not yet provided information on these details. The legislation, if passed, would allow the provincial government to prescribe:
• what energy efficiency information has to be provided and in what manner;
• the cost of home energy efficiency audits;
• the types of residences that these requirements would apply to; and,
• under what circumstances and at what times these requirements would be effective.

Actions

TREB and the Ontario Real Estate Association have been closely monitoring this issue and taking action. A detailed submission was sent to the Minister of Energy and Infrastructure last month, by OREA, to highlight concerns over mandatory home energy audits and to encourage the provincial government to maintain a voluntary system of home energy audits instead of a mandatory system.

Affordable Housing

Greater Toronto REALTORS® announced 2,565 transactions in the first half of March compared to 3,183 during the same period last year. The annual rate of MLS® sales decline was the smallest in five months.Mid-month March MLS® sales increased compared to the 2,044sales experienced in the first half of February. MLS® sales follow a recurring seasonal trend, with transactions generally increasing between January and May and then decreasing between June and December.”As we move into the spring market, it appears that we are seeing stronger demand for ownership housing in the Greater Toronto Area,” said TREB President Maureen O’Neill. “Buyers are reacting to the market’s strong foundation of affordability.”

The average price for MLS® sales was $365,499 compared to $385,405 last year.”Affordability has improved over the past few months due to a combination of lower home prices, near record lows for mortgage rates and rising earnings,” according to Jason Mercer, TREB’s Senior Manager of Market Analysis.

Interest Rates At a Historical Low, so what are you waiting for?

For those of you that own a property and have a variable mortgage (myself included), how excited are you about interest rates having been dropped yet again on yesterday by .05% making it 3.25% on a variable rate mortgage and 4.15% on a fixed rate mortgage for a 5 year term, yay!!! Yes, I am now doing my happy dance although you can’t see it

So, now the ? is, what are your plans for that extra cash that is just laying around in the bank, now that the banks are pretty much giving it away for free to try and stimulate our economy? Let’s put it back into real estate, and keep spending going people!! Not that I am biased or anything, I know I am a real estate Broker and all that, so of course you’d think I’d be trying to encourage you to buy now, even though the rest of the world is telling you that the sky is falling.  But think on this a moment, for those of you that have seen this come before. 

Everyone is waiting for prices to drop further, and further until we are at an all time low, but remember the saying “what comes up, must go down”, if you hold on to the theory of waiting for the market to bottom out, you’ve just missed your opportunity, because by the time that happens, and it will, sure enough the market is going to soar and soar quickly.  Then what side are you going to be on?? The side that says you’ve just missed the boat on this one!

This theory has been proven time and time again, so be on the winning side and act now before interest rates climb back up.  Now is your chance to get into the home you’ve always wanted but could never afford.