Richard Friesen's Real Estate Blog

Strata Fees

Richard Friesen — Wed, 09 May 2012 18:29:10 +0000

Strata fees will usually include strata management, caretaker (if an apartment), garbage pickup, gardening, snow removal, amenities such as swimming pool & exercise room, and some apartments will even include hot water, heat and gas.

There is no way to lock

-in a monthly fee like a mortgage, however you can prepare for a fee increase, by building a buffer into your monthly budget. If the fees go up, you have that covered. If they remain the same, you have some extra savings.

Many see buying a condo as an alternative to renting, as often it can be cheaper to purchase than to rent. Also, the purchase of a condo can be a first step to building equity in order to buy a house

Why Canadians buy condos

Richard Friesen — Wed, 09 May 2012 18:25:36 +0000

Why Canadians buy condos

When we use the term “condos”, we mean both apartments and townhouses.
Three-quarters of condo buyers say monthly fees are a small price to pay to enjoy the convenience and amenities of condos, according to the annual TD Canada Trust Condo poll.
Condo owners found that they require less maintenance, are more affordable, and offer more amenities than a house.
Top features Canadians look for in a condo:

1. Good building security
2. Energy-efficient features &
attractive interior design
3. A balcony
4. Parking for their car
5. Close to public transit

B.C.’s First-Time New Home Buyers’ Bonus

Richard Friesen — Thu, 23 Feb 2012 22:21:28 +0000

This is a temporary bonus, effective February 21, 2012 to March 31, 2013. The bonus is a one-time refundable personal income tax credit worth up to $10,000.

Who qualifies? * Buying or building a new home or a substantially renovated home where HST is payable.

You or your spouse or common-law partner have never owned a primary residence
You file a 2011 BC resident personal income tax return
You are eligible for a the BC HST New housing rebate
You intend to live in the home as your primary residence.

The new home must be purchased on or after February 21, 2012; HST is payable on the home; no one else can claim a bonus in respect of the home.

When do you get the bonus? Once the home is complete or occupied before April 1, 2013 (90% test).

How much can you get?

5% of the purchase price to a maximum of $10,000.

How does income affect this bonus? For single individuals, the bonus is reduced by 20 cents for every dollar in net income over $150,000. If you earn $200,000, the bonus would be 0.

For couples, the bonus is reduced by 10 cents for every dollar in family net income over $150,000 and is reduced to zero at $250,000 family net income.

What kinds of homes are eligible? Detached houses, semi-detached houses, duplexes, townhouses, condominium units, mobile homes, floating homes, units in a housing co-op.

For more info, go to the BC government website.

Why Abbotsford?

Richard Friesen — Tue, 21 Feb 2012 18:56:37 +0000

Thinking of moving to a great small city (around 150,000 population)?

Here are some great reasons why Abbotsford is a top choice:

* Temperate climate (may or not have snow in winter)

* Fabulous scenery with mountain and valley views

* Affordability (price of an average home is under $400,000)’

* Excellent schools

* Loads of recreation: recreational centres, sports facilities, numerous golf courses, etc.

* International Airport

* New regional hospital and cancer centre

* University of the Fraser Valley

* New entertainment centre with great entertainers and The Abbotsford Heat(AHL)

* New public art gallery and museum, The Reach

* Tradex that hosts regional trade shows

And that’s just the beginning. A wonderful city in which to raise your children with great schools, amazing sports, music opportunities, etc.

Why use a Seniors Real Estate Specialist?

Richard Friesen — Mon, 20 Feb 2012 23:03:27 +0000

Richard Friesen has earned the designation, Seniors Real Estate Specialist.

1. An SRES understands the issues facing older adults. They can help you navigate your choices and may be able to suggest alternatives that help you stay in your home.

2. This specialist understands the demands a sale can make on you, and works hard to minimize them. Richard will be there when you need him.

3. The Seniors Specialist is interested in looking out for your best interests through all aspects of your transition, not just the sale of your home.

4. A Seniors Specialist can draw on a network of other helpful experts to help you deal with the entire process, from finances to moving.

5. A Seniors Specialist is knowledgeable about senior housing options and can refer you to another Seniors Specialist if you’re moving outside the area.

First Time Buyers and their RRSPs

Richard Friesen — Mon, 06 Feb 2012 22:53:37 +0000

The Home Buyers’ Plan (HBP) allows you to withdraw up to $25,000 from RRSPs to buy or build a qualifying home for yourself (as a first-time home buyer) or for a related disabled person. You may still be considered a first-time home buyer if you own a rental property or if you have not recently owned a home.
This is a temporary “loan” from your RRSP — you must pay back the amount you borrow from your RRSP for the Home Buyer’s Plan within 15 years or it will be added to your taxable income.
You can make withdrawals from more than one RRSP as long as you are the annuitant (plan owner). Typically, you will not be allowed to withdraw funds from a locked-in RRSP.
How the Home Buyers’ Plan works
• The Home Buyers’ Plan (HBP) allows you to use money in your RRSPs for a down payment on a principal residence.
• You can use up to $25,000, or $50,000 per couple, of your RRSPs toward the purchase of a home, as long as the funds are not locked in. For example, an RRSP from a pension plan that that is inaccessible until age 55 would not qualify.
• You can use your RRSPs to acquire an accessible or better-suited home for a disabled relative (related to you by blood, marriage or adoption).
• You must meet the government’s requirements as a first-time homebuyer to make this withdrawal. The primary requirement is that you or your spouse has not owned a home in the last five years.
• Withdrawals are not deemed to be taxable income in the taxation year in which they are withdrawn.
• There is a no-penalty, 15-year payback period for the RRSP money. Under the terms of the Plan, buyers are required to re-contribute 1/15 of the withdrawal each year, starting two years after the withdrawal was made.
Repayment
• If the minimum annual repayment is not made as scheduled, that amount is included as income for that year.
• Additional repayments may be made if desired; this will result in a smaller outstanding balance and lower scheduled repayments for the rest of the payback period.
• The repayment does not need to be made to the same RRSP from which the original withdrawal was made. You must, however, be the plan holder.
• You cannot direct your repayment to a spousal RRSP.
Conditions
ONE of the following conditions must apply:
• You are withdrawing funds to buy or build a home for yourself as a first-time home buyer
• You are withdrawing funds to buy or build a home for a related disabled person
In addition, ALL of the following conditions must apply:
• You enter into a written agreement to buy or build a qualifying home
• You intend to occupy the qualifying home as your principal place of residence
• Your Home Buyers’ Plan balance on January 1 of the year of the withdrawal is zero
• Neither you nor your spouse or common-law partner owns the qualifying home more than 30 days before the withdrawal
• You are a resident of Canada
• You buy or build the qualifying home before October 1 of the year after the year of withdrawal
You are responsible for making sure that all Home Buyers’ Plan conditions that apply to your situation are met. If a condition is not met while you are participating in the plan, your RRSP withdrawal will not be considered eligible. You will have to include the RRSP withdrawal as income on your income tax return for the year you received the funds.
If you do not meet the conditions to participate in the HBP in the current year, you may be able to participate at a later date.
First-Time Home Buyers’ Tax Credit
Budget 2009 introduced a new non-refundable tax credit for first-time home buyers. The credit will be calculated based on an amount of $5,000 and will provide tax savings of up to $750 to reduce the costs of first home purchases completed after January 27, 2009.
An individual will be considered a first-time home buyer if neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the calendar year of the home purchase or in any of the four preceding calendar years. A qualifying home will be one that is currently eligible for the Home Buyers’ Plan which the individual or a spouse or common-law partner intends to occupy as a principal place of residence. The credit will also be available for certain acquisitions of a home by or for the benefit of an individual who is eligible for the disability tax credit.
Any unused portion of an individual’s First-Time Home Buyers’ Tax Credit can be claimed by the individual’s spouse or common-law partner, but the total amount claimed cannot be more than the maximum amount that would be claimable for the year by any one of those individuals.
Get all the facts
Canada Revenue Agency provides a very comprehensive document on the Home Buyers’ Plan. You can download it from their site at http://www.cra-arc.gc.ca.

Home Ownership Incentives in Canada

Richard Friesen — Wed, 25 Jan 2012 18:47:07 +0000

The home buyers’ tax credit provides a $5000 non-refundable income tax credit on a qualifying home bought after January 27, 2009. This is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5000. This works out to be a tax relief of up to $750. This is a one-time credit only in the tax year you purchase your home.

First -time home buyers can now withdraw up to $25,000 per person from their RRSP, in order to purchase or build a home after January 27, 2009.
For more information, go to www.cra.gc.ca.

Property Taxes Information

Richard Friesen — Mon, 16 Jan 2012 19:45:30 +0000

All property owners are taxed annually based on the assessed values as determined by the BC Assessment Authority. The assessments are based on the market value of the real estate as of July 1st of the previous year.
The appraisers look at recent sales of similar properties, applying similar standard units of comparison: location, size and age.
They get their information from places like the Land Titles Office and Real Estate Transactions. The prices will go up or down, based on market conditions for the area. The only difference will be if there has been a substantial change in your home.
BC assessments are mailed out the first week of January, and you have until January 31st to send in your written appeal. There is no fee to file an appeal.

If you want to compare your home to your neighbor’s assessment, go to www.bcassessment.ca, then click on
E-valueBC, put in your address, and you will be shown the assessed value of all the neighbours on your street. This will give you an idea of the comparable value of your home, and let you determine if you wish to file an appeal.

According to the BC Assessment Authority, Abbotsford residential values have decreased by 1.94% in the last year.
HOMEOWNER GRANTS:
As of January 3rd, the maximum amount of your home owner grant in the Fraser Valley is being raised to $570 and $275 for seniors, disabled and certain veterans, to reflect the general increase in property values in BC.
YOUR BC ASSESSMENT vs.
YOUR HOME’S MARKET VALUE
Although the Assessment Authority works to reflect the market value of your home, our experience has been that your assessment is not an accurate valuation of what you can sell your home for. This is probably a reflection of how much our homes vary in layout, finishing, and buyer appeal. We have found that the current market value can be either higher or lower than your BC assessment.

Life Leases

Richard Friesen — Wed, 07 Sep 2011 19:40:50 +0000

A husband creates a life lease for his second wife, allowing her to live in their home as long as she lives. When she dies, the home reverts to the heirs. If she lives the entire rest of her life in that home, no problem. But should she move out of that home, say, to go into a care home, what happens to the family property?
Her children might see this property as a money maker and rent it out, or even live in it themselves.
If the husband has put in the life lease a clause stating that should she move out of the property, then it would revert to the heirs, the problem would have been averted.
When you contact your lawyer to write up this life lease contract, make sure that this potential problem is avoided.

Buying Property in the United States

Richard Friesen — Tue, 14 Jun 2011 19:08:22 +0000

With drastically reduced prices in certain parts of the U.S., cross-border real estate buying can be very tempting. To be successful, one needs to have up-to-date knowledge of continually changing border, legal and political issues.

Once you’ve found the particular property, checked on the local crime rate, found the cash to pay for the property (difficult to get U.S. financing for Canadians), then you will need to investigate the way you will register your ownership. As there are 6 to 8 ways to title property and each one with different tax implications, you will see the need for expert advice.

Then there is the question of property insurance. Be aware that insurance can be very expensive, especially if you are a non-resident. Extra insurance such as for flood or other disasters can be in the thousands of dollars. Pay attention to your insurance deductible – they can range from 2% to 25% of the cost of the property.

Check out the details of property taxes, as most states will charge more for foreign ownership.

If you are purchasing for renovations, you will need to investigate who is allowed to do the work. You will be required to hire American workers, and not your brother-in-law.

Hoping to fix up and resell for a profit? You will need to check out all the costs of selling in a foreign country. A non-resident may be subject to a withholding tax, and to do this you will need to file a US tax return (another expense). There will be capital gains to be paid on the profit you made. This will be paid to the US government in US dollars and then to Canada Revenue Agency with a credit for the US tax already paid.

Before you buy for the long haul, get expert advice on what happens in the event of the property owner’s death.

The bottom line: get experienced, professional cross-border advice before taking the plunge, no matter how attractive it looks.