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  • June 20, 2013

    New HST/PST Housing Transitional Rules

    With the HST voted out in 2011, the real estate community has been eager to find out what will happen to HST charged on new homes in between now and when PST/GST comes back on April 1, 2013. The concern has been that some buyers are holding back on making their purchase because they're waiting for the transition back to GST in order to save money. To leviate peoples concerns, the government has set the following rules in place.

    - The BC New Housing Rebate threshold will increase to $850,000 from $525,000, so that more than 90% of newly built homes will now be eligible for a provincial HST rebate effective April 1, 2012.

    - The maximum rebate will increase to $42,500 from $26,250 effective April 1, 2012.

    - Buyers of new secondary vacation or recreational homes outside the Greater Vancouver and Capital Regional Districts priced up to $850,000 will now be eligible to claim a provincial grant of up to $42,500 effective April 1, 2012.

    - For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the 7% provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of 2% on the full house price. 

    The temporary housing transition measures will be in place until March 31, 2015. The tax only applies to homes where construction begins before the transition date and ownership and possession occur after.

  • June 20, 2013

    Lido Income Guarantee Program

    Below is a selection of homes eligible for Lido's 2 year Rental Income Guarantee Program* and a breakdown of the monthly income you can expect to be paid from Bosa Properties each month. See more details about Lido here.

    Suite

    Plan Type

    Purchase
    Price

    Monthly
    Income*

    Total Income paid to you over 2 yrs*

    602

    W Plan - 2 bed, 2 bath

    $495,900

    $1,900

    $45,600

    701

    V Plan – 2 bed, 2 bath

    $499,900

    $1,900

    $45,600

    111

    L Plan - 2 bed, 2 bath

    $598,900

    $2,000

    $48,000

    1606

    F Plan - 2 bed, 2 bath

    $632,900

    $2,000

    $48,000

    1103

    H Plan - 2 bed, 2 bath

    $646,900

    $2,300

    $55,200

    701

    K Plan - 2 bed, 2 bath

    $719,900

    $2,300

    $55,200

    *Some restrictions apply. Contact me for more details.

  • June 20, 2013

    Lido Breaks Ground This Week

    On May 9th Lido had it's official ground breaking ceremony.

    “Thanks to the significant support we’ve received from our valued home owners and realtor partners, our sales program at Lido has gone extremely well. We’ve well surpassed our pre-sales targets and we’re now underway, and we’re very excited about it”, commented Bosa.

    Construction activity over the coming weeks will be focused on the Eastern-most portion of the Lido site. See more info on Lido here.

  • June 20, 2013

    Investment Property Vs. Mutual Funds

    I was chatting with a client recently around tax time who was deciding what to do with a savings she had of $80,000. She’s a home owner and is comfortable enough now to start putting some money away for her retirement. She was debating two different options.

    1) Put $80,000 into mutual funds and contribute $650/month - Historical mutual funds rates show you’d expect about 6% a year. End result is $807,600.

    2) Put $80,000 towards her mortgage and put $650/month into mutual funds - She would save $34,000 in interest - Get her $80,000 on resale - Earn $450,500 at the end of 25 years on the mutual funds - Total of $565,500.

    This got me thinking and I crunched some numbers for her and I came up with another option.

    3) Buy an investment property

    Use the $80,000 to put 20% down on a $400,000 condo. At today’s mortgage rate your payments will be $1,850/month including your strata fees and property taxes. It will rent for around $1,200 which means you’ll be putting $650 a month towards it. With a modest growth of 5% a year your condo is worth $1,355,000 in 25 years. Considering your initial investment and realtor fees you can expect to net about $1,200,000 when you sell it. Even after taking into account capital gains tax and accounting for some vacancy you’re still way ahead. 10 years ago a new one bedroom condo downtown was selling for $203,000. Today, that same condo is selling for $420,000 on average which means a growth of 7.5% a year. If that trend continues, buying a newer $400,000 condo today means it could be worth $2,450,000 in 25 years!

     

  • June 18, 2013

    New Mortgage Rules For Canada

    1) High Ratio mortgage rules are changing July 9th, 2012.
    2) Max amortization reduced to 25 years from 30 years with less than 20% down.
    3) Max debt servicing ratio reduced to 39% from 44%
    4) Max purchase price of $1,000,000 with less than 20% down payment.

    Here's a few examples of what the rule change will do:

    - With the current rules it takes around $67,000 to qualify for a $500,000 purchase with 5% down payment.  After July 16th the same client will need to earn $82,000 to qualify for the same puchase plus their payments will be $250 more per month.

    - With the current rules a buyer can purchase a $1,000,000 plus property with 5% down payment after July 16th this same buyer will need 20% down payment.  On a $1,000,000 purchase that's an extra $150,000.

    - If interest rates increase these scenarios will only be amplified.  For example if interest rates went to 4% and using the new rules the client who could purchase a $500,000 house right now with $67,000 income would need to have an income of $90,000.

  • March 05, 2012

    BC HST Transition Rules

    Scenario 1Contract dated on or before April 1, 2012 and possession on or before April 1, 2012.
    This is still under the current HST rules. The buyer will pay the 12% HST and be eligible for a rebate of up to $26,250 on homes priced to a maximum of $525,000. Homes priced at more than $525,000 are eligible for a flat rebate of $26,250.

    Scenario 2Contract dated on or before April 1, 2012 and possession on or before April 1, 2013.
    The 12% HST is still payable and eligible for a rebate of up to $42,500 on homes priced to a maximum of $850,000. Homes priced at more than $850,000 are eligible for a flat rebate of $42,500.

    Scenario 3Contract dated on or before April 1, 2012 and possession is on or after April 1, 2013.
    There will be no HST paid. Instead a 7% provincial portion of will be paid in addition to a transitional provincial tax of 2% on the full house price

    Scenario 4Contract dated on or after April 1, 2012 and possession before April 1, 2013.
    The full 12% HST is payable and the buyer will be eligible for a rebate of up to $42,500 on homes priced to a maximum of $850,000. Homes priced more than $850,000 are eligible for a flat rebate of $42,500.

    Scenario 5Contract dated on or after April 1, 2012 but the construction of the home has started before April 1, 2013, and possession is after April 1, 2013.
    The 7% provincial portion of the HST will not be payable. The buyer will pay a temporary transitional provincial tax of 2% on the full house price.

    Scenario 6 - Contract dated on or after April 1, 2013 and possession after April 1, 2013.
    The HST is officially phased out and only GST is payable.

  • February 04, 2012

    Lido By Boso Opening In 1 Week!

    This is a building to be excited about! It has all the right elements - great location, quality builder, beautiful amenities and well priced. The lower floor 1 & 2 bedroom units at Lido will be starting at about $350,000 and $550,000 respectively. The amenities include an outdoor pool 6 storeys high surrounded by 6 heated cabanas. Pricing for penthouses will be available shortly. Take a look here for more details on Lido.

  • January 17, 2012

    Interest Rates To Remain The Same - What Does This Mean To You?

    The Bank of Canada has annouced that they will hold the prime rate. How does this affect our real estate market? Since they are holding the rate it suggests that they don't expect big growth in Canada and therefore want to encourage growth. With the rates remaining low more people can afford to buy and we can expect the buyer's market, which is apparent in many markets, to trend towards a more balanced market.