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Posts tagged with: home

Buying Real Estate Can Save You Some Tax Money

March 22, 2014 - Updated: April 22, 2014Buying Real Estate

 

So it’s been some time since I last wrote to this blog and for that my apologies.  Here’s to a happy belated new year everyone.  It’s March and many people are happily thinking of their taxes right about now.  Ok that could be an exaggeration, but I’m sure no one is appreciating the winter we are still going through here in Mississauga, Ontario.  On the brighter side for all you home owners or people who will be soon home owners, I know several ways for you to either save on taxes or get money back from the government.

Home Buyers' Plan (HBP)

The Government encourages people to save for buying homes. The Home Buyers Plan allows you to withdraw (as a loan) up to $25,000 from your registered retirement savings plan (RRSP) to help with the purchase or construction of a home. Certain conditions apply. You are required to submit a request by completing the T1036 tax form that is available. You must then repay the loan, without interest, over a period not to exceed 15 years. 

First-Time Home Buyers' (FTHB) Tax Credit

Buying a home for the first time can seem to be a very complicated and expensive process.  The Federal government wants to encourage people to own homes. The First Time Home Buyers Tax Credit was created to help with this financial burden.  For 2009 and subsequent years, the FTHB is a new non-refundable tax credit of $750  based on 15% of amounts up to $5,000, for first-time home buyers after January 27, 2009.

Ontario Energy and Property Tax Credit (Ontario Trillium Benefit)

This is a tax credit for low to medium income home residence or renters to help pay for energy costs and relief for sales and property tax.  For the year 2014 you can get up to $973 if you are a not senior citizen and up to $1108 if you are a senior.

Ontario Senior Homeowners' Property Tax Grant

This grant helps qualified persons to get up to $500 each year to help with the costs of property taxes.

Rental income deductions

Revenues earned are included on an accrual basis. Expenses incurred in earning rental income must be reasonable. These would include advertising, insurance costs, interest and fees related to borrowing, legal fees preparation of lease documents or collection of overdue rents, maintenance and repairs, management fees and fees to rental agents to manage the property, office expenses, property taxes, travel and utilities.

Business use of home expenses

If as part of your employment you are required by your employer to work from home and you qualify, you can deduct expenses you have paid that are business related so long as you employer does not reimburse you.

If as a part of your self-employment business you use work space in your home as your principal place of business or you use that space only to earn your business income you qualify to deduct a portion of expenses incurred.  These include utility costs, maintenance of your home, telephone, supplies, property taxes, mortgage interest and home insurance. 

GST/HST New Housing Rebate (Seek advice directly from CRA authorities)

Buying a newly constructed or substantially (90%) renovated house used as the primary place of residence, enables the purchaser to be rebated part of the GST or HST paid in most circumstances.

I always recommend when it comes to paying taxes you should consult the CRA and a qualified tax consultant as I do not intend to represent this article as giving financial or tax advice.  By all means contact a CPA, CMA or CGA or the person working at the local mall helping to file tax returns. Base your decision on how complex your needs are.  If you don’t have someone currently doing your taxes you may want to contact a very experienced tax professional.

By Todd Lee

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References:

Expenses you can deduct http://www.cra-arc.gc.ca/tx/bsnss/tpcs/rntl/bt/rprt/xpns/menu-eng.html

Work space in the home expenses http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/229/slry/wrkspc-eng.html

Business use of home expenses  http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/rprtng/t2125/ln9945-eng.html

First Time Home Buyers Tax Credit  http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html#q1

Building, Purchasing and Selling new Houses Building, purchasing and selling new houses http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/cnstrctn/bldngsllnghms-eng.html

Ontario Energy and Property Tax Credit  http://www.fin.gov.on.ca/en/credit/oeptc/index.html

Ontario Trillium Benefit  http://www.fin.gov.on.ca/en/credit/otb/index.html

Healthy Homes Renovation Tax Credit  https://www.ontario.ca/taxes-and-benefits/healthy-homes-renovation-tax-credit

GST/HST New Housing Rebate (Seek advice directly from CRA authorities)GST/HST New Housing Rebate http://www.servicecanada.gc.ca/eng/goc/gst_new_housing.shtml

Tagged with: tax buying ownership rebates home save money

Increase The Value Of Your Mississauga House With These Three Renovations.

November 16, 2012 - Updated: April 18, 2014Houses

    As I’m a real estate agent, people ask me questions about making renovations to their Mississauga house.  They usually want to know how much their Mississauga house is worth after doing said renovation.  I’m quick to remind them that no matter which renovation they do, it’s not guaranteed they will make back their money for various reasons best left for another blog.  But, I point out the most popular renovations buyers are looking for are these…     

  • Kitchens.  From the perspective of selling you want to attract as many people as possible.  Demographics show that men are cooking more often today.  Therefore, it only makes sense to renovate a room that will be used by both males and females.  Costs for upgrading cabinets, appliances and counter tops can get pricey quickly, but people are usually willing to pay more for a house that has a beautiful kitchen because they know it’s expensive.

 

  • Bathrooms.  This is a room used by everyone and nothing turns off people quite as much as a beat down bathroom.  Spending money on tiles, bath tubs, sinks and fixtures can also get up in costs, but buyers are willing to pay more because they don’t have to do it.

 

  • Windows and Doors. In my opinion this is the third effective way to increase the value of your home.  Buyers can see value in a nice entrance door (curb appeal) and in having new glazing that reduces heating and cooling costs.  Once again, it’s something the new owner would have to do eventually, so having it already done is very appealing.

       All three renovations stated have a couple things in common.  That is…they can be seen in day or night, or season, which is always good for selling to potential buyers. These suggested renos also cost money but add value. Buyers know they won’t have to go thru the headaches if they buy that Mississauga house from you because it’s already done.

By Todd Lee

Tagged with: todd lee mississauga house renovations kitchens bathrooms windows and doors increase value of house house home

Semi Detached Homes, Townhomes and Condominiums – Real Estate 101

September 27, 2012 - Updated: April 18, 2014Real Estate

    In this second installment in the series of Real Estate 101 blogs I will examine the residential structures that share multiple single family dwellings.  To keep in line with the previous blog I will be answering the questions regarding: What are the different types of residential property?  What are the advantages or disadvantages? What is a Condominium?  What is the difference between a Row house and a Town house?

    If you missed the First blog, I discussed questions around detached homes and you can read it here

    Opposed to detached homes which are considered a single family dwelling that is on one plot of land, there are other types of residential property that can have multiple dwellings on one plot of land.  While there are technically many varieties available I will choose to focus my efforts on the 3 most common we would find in Mississauga:  Semi Detached Homes, Town Homes and Town Home Condominiums.

    The Semi Detached home is defined as two attached dwellings that are divided by a common vertical common wall above grade.  The semi-detached house has many advantages including separate floors for sleeping on the top floor, living on the main floor and storage in the basement.  The economic advantage to semi-detached homes lies in the fact the two dwellings share a common structural wall, meaning the builder can fit two homes on a smaller plot realizing a savings in the cost of land.  This savings is passed down to the buyer who may desire the advantages of a detached home but cannot afford one. 

    Disadvantages to the Semi detached house include lots of stairs between levels; less privacy as sounds can pass through the common wall if not properly insulated; higher risk of damage if the adjoining unit catches fire or suffers from some other disaster and less potential to modify the building because of the shared structure.

    Townhomes or Town Homes or Row Houses are all the same thing.  Defined; they are more than two attached dwellings (typically three or four) that are separated by a vertical party wall above grade.  In Mississauga you will find Townhomes having three or four floors.  Sometimes they will have a basement with two or more floors above grade, while others may have the main entrance on the second floor and a garage entrance on the first level with a walkout to the backyard.  As land became more scares in Mississauga we see more development of this style of residential structures as the use of land is more efficient.  Just like the semi detached home, the advantage of putting more living units on piece of land results in a cost savings to the builder, which in turn is realized as more affordable housing for the buyer. The most desirable units in a town house are always the end units as they resemble semi detached homes.

    Disadvantages to the Town house include:  Typically smaller sized units 900 to 1600 square feet (though some go higher than 2000 Square feet), lots of stairs between levels and lots of levels; less privacy as sounds can pass through the common wall if not properly insulated and in the case of the middle units from both sides; higher risk of damage if the adjoining units catches fire or suffers from some other disaster and less potential to modify the building because of the shared structure.  As builders can fit more units in a space vs. if they had developed only detached home, you can expect higher concentration of people, traffic, noise etc.

    There are several types of condominiums available, but for the purposes of this blog, I have chosen to focus on the most typical forms people are aware of; Condominium Townhomes and Condominium Apartments.  Before I get into the definition of a condominium I would like to address the advantages/disadvantages of apartment buildings.

    They can be built as low rise, mid rise or high rise.  This means the builder can have even more efficiency of the plot of land by having much more units to sell.  As most apartments are only one level, like the bungalow, this makes the flow through the unit very easy.  As this is the most efficient use of space, typically this structure is the most affordable for first time buyers or people without the income for a townhouse. The drawbacks to apartments are; lack of privacy as units can leak noise from neighbors above their unit, or to either side or from below.  There are usually rules for use of the common elements and even for modifying plumbing, electrical wiring and window and floor surfaces.  By laws can effect even what pets can be in the building.

    Physically the condominium townhome or condominium apartment is no different to a regular townhome or apartment buiilding.  The key to understanding condominiums is to know that it’s a legal entity (Corporation) that has a Declaration (Constitution) which contains required and optional information set out by the Condominium Act.  It also has a Description that contains plans, surveys and specifications describing the property.  The Condominium defines what a unit of the condominium is and what the common elements are via the Description.  Units can be owned exclusively, while the common elements are owned by all the unit owners as tenants in common.  Unit holders have to pay a maintenance fee or condo fee which goes to pay for the expenses of the condominium.  Click here for more about condo fees.

    Condominiums are governed by a board of directors.  They are elected by the unit holders with the exception of the first board who are appointed by the Declarant, who is usually the individual who created the Condominium.  The board has power to make, amend and repeal by-laws, which establish the condominiums internal operation and rules, which promote safety, security, welfare of the owners and the condominium property and assets and the common elements.

    An excellent example of how a condominium is better than a free hold situation can be seen in maintenance.  The average person in Canada does not put aside money for a “rainy day” should their roof leak or if the basement gets flooded.  The Condominium is required by law to calculate predicted maintenance expenses and have a reserve fund should the condominium need repairs which would be tapped into.  Furthermore, condominiums usually take care of all the landscaping, snow removal and salting of walkways, painting and maintenance of the common elements (gym rooms, pools, party rooms etc.) and cleaning of the exterior windows.  In a freehold situation, the home owner has to take care of all of those things and still may not have all the amenities to enjoy that can be found at a condominium town home or apartment.

    I hope you found this blog educational and useful.  Thank you for reading it and for more information please contact me at info@toddlee.ca. Should you need professional real estate representation I sincerely welcome your business.

By Todd Lee

Tagged with: blog real estate mississauga todd lee semi semi detached town home townhome town house townhouse condo condominium apartment definition of questions house home

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