90% Rule HST

CRA is offering HST seminar’s to help us understand the new charges and changes coming. I went to one last week hoping to learn something, meet new people and well you never know where your next listing or purchaser will come from! The course was highly informative I suggest you attend one. I am predicting a flurry of activity especially in the renovation business as we approach the HST start date July 2010. Real estate is affected. Anything that had GST is now subject to HST. That adds to the cost of selling a home and to the cost of buying a home.
Like anything there will be a transition. Today I am writing about the 90% rule. If 90% of the service has been performed before July start date then no HST is applicable. Say you list and sell a house in May conditionally. It firms up in June but doesn’t close until August 15th. As the listing agent 90% of your service or work has been completed before July 1st therefore no HST is applicable.
That makes sense to me but to be sure I suggest you document your work just in case 1 day 5 years later you are been audited. My opinion; a lot easier reviewing notes than trying to remember old sales.

Home energy efficiency...consider a voluntary energy audit

Mary and I just came back from 2 ½ intensive days taking a passive solar course in friendly, rainy Truro Nova Scotia. Make sure you stop in at Murphy’s fish and Chips located on the Esplanade. There is a reason it is rated Atlantic’s best! I am not going to build a passive solar home, but I am going to use and adapt the principles in the course to help make my living conditions more comfortable and cost efficient.

When my buyer is seriously considering a property I encourage them to call the utility companies. This gives you a starting point for the energy costs for that property. I say a starting point because too many questions are unanswered; How hot did they keep the house? How old are the occupants? Who is there during the day? How many hours watching TV? The answer to these questions helps us understand the routine of the house.

An energy audit will help. The government’s new position now makes energy audits voluntary rather than mandatory (yes, that's right; no more mandatory energy audits!). Consider doing one and sharing with prospective buyers, not only will it help the buyer; they may forgo doing a home inspection! Everywhere you look today it is “green” this and “green” that. You can even receive rebates for making your property more energy efficient.

I ask my sellers to tape the heating bills to the furnace. Sharing the costs helps answer a basic buyer question. The rest is educating…you know…for every 2° over 70 can increase your heating bill as much as 15%. Babies and elderly people often keep their homes between 72 & 76. Programmable thermostats reduce heating costs when used properly and increase costs when not.

Back to the passive solar course, I re-learned the angle of the sun between winter and summer and its efficiency time, roughly high noon and 15°- 30° either way. In the winter allow the sun in during the day and let it warm something that can radiate heat. In the summer keep it out to help keep your home cooler. The result is less energy needed to heat or cool your home. I learned a lot this past weekend. Living in an old house our forefathers knew a lot about this emerging technology; history does repeat itself. A penny saved is a dollar earned!

Two similar properties offered for sale, 1 costs $500.00 more to heat…if you were on a budget which would you choose? Which is worth more?

Do you have any tips to share? Are you doing anything to reduce your utility costs without giving up your comfort? Please share.

My thoughts on the new mandatory energy audits

Energy Audits before you sell your home, I’m not sure on this one.

Pro: Lets the buyer know the efficiency of the property they are buying?
Con: Can be used against the seller in negotiating a final/fair price.

Pro: Shows the buyers where improvements can be made to save money on their energy usages.
Con: Forces the seller to spend $

Pro: National Association of Green Agents and Brokers apparently has a kit for a preliminary examination which points out areas in which small changes can help reduce energy costs and improve a property’s score.
Con: Question: could anybody “cook the books” for a better score?

Pro: Only licensed auditors will perform these audits.
Con: Exactly what does the licensing entail? Licensing plumbers, electricians and carpenters take several years; will an auditor be as educated? After all, they are providing a professional opinion indirectly on these trades.

I read that new windows don’t necessarily save money (energy) compared to old. I believe most building inspectors will tell you my 100 year old windows should be replaced. I get a little anal sometimes and this winter we tested out my “grandparent theory”… Close the drapes! Our living/dining room is 30 feet by 16 feet with 2 large windows facing south and 2 large windows facing west. Our experiment involved opening the drapes one evening, and closing them the next. We found a 4-5° difference in temperature. Our grandparents were right, 5° warmer with the drapes closed! So if you want to be warmer…close the drapes. If you want them open, understand the extra cost associated. It’s your money!

My drapes would be closed for an energy audit. Would I pass or fail? How would we know if any standard testing could be strictly adhered to? Impossible! I am all for reducing costs through education and choices but I don’t believe we should be forced.

Comments Please?

The Good, The Bad, and The Ugly of HST

The Good

Tax experts predict the average Ontario family will be further ahead despite harmonized sales tax. Lower-income families will get hit a bit more, but the tax rebate will cushion that.

Harmonizing GST and PST is good for businesses because it lets them recover money now lost to retail sales taxes and use it for investment in new equipment and machinery. Currently, businesses receive a rebate on the GST, but not PST.

A study of Quebec, Newfoundland, Nova Scotia and New Brunswick - which harmonized their GST and sales taxes - found business investment jumped and prices (of goods & services already taxed) decreased.

In the long run, more jobs will be created (better jobs that require equipment and machinery behind them which may pay better) and increased job security.

The Bad & Ugly

We will be paying more at the checkout.

Homebuyers, especially first-time homebuyers, will find it tougher to afford a home. For a resale house priced at $360,000, a HST could add over $2,000 in new taxes to closing costs. Take a look at the table below:



In total, a HST will add $313 million annually in new taxes to resale home transactions. This will hurt the resale home market, prolonging the housing industry’s recovery from the current economic downturn.

Harmonized Sales Tax for Ontarians

More taxes to come (Yipee Yahoo!)

Starting July 1, 2010 expect a harmonized sales tax. The McGuinty government announced it will harmonize the GST and PST, causing consumers to pay extra tax on a range of goods & services.

This will increase the costs associated with real estate transactions (legal fees, moving costs, commissions, home inspection fees), which we currently pay only 5% GST on.

And better yet, we will also be paying more for goods & services we use daily: gas, utilities, haircuts. This is in response to the economic downturn; in hopes of raking in an additional $3.5 billiion in annual revenue.

The good news?

- There will be three tax rebate cheques totalling $1,000 for families with household incomes of less than $160,000 and $300 for individuals who make less than $80,000 a year.

- Some basic goods will be exempt from the blended sales tax, such as children's clothing, books, diapers and new houses costing less than $400,000.

Advanced warning

If you’ve ever waited a long time for a train to clear a crossing – and it’s a rite of passage for Londoners – then here’s news: City council has approved a pilot project to provide advance warning a train is crossing.

For starters, the project will be centred on the CN Rail crossing of Colborne St. south of Bathurst. Signs will be situated on York and Horton, about two blocks east and west of Colborne, that will signal approaching motorists the Colborne crossing is blocked by a train. Motorists can then plan a different route.

If the idea works, it will be rolled out to other locations in the city.

Do-Not-Hesitate to-Call List

Was the Do-Not-Call list designed to fail?

Before registering on the list, my cellular phone rarely received unsolicited phone calls. That has changed. My cellular phone receives calls from U.S. telemarketers daily.

Many Canadians may find themselves in the same position. It has been reported that the Do-Not-Call list may have gotten into the wrong hands.

Any telemarketer can access the list by going to the National Do Not Call List website and paying a small fee. They are required to check the list regularly to ensure they are not calling registered numbers. However, anyone can pose as a telemarketer to access the list. According to reports, the list has been sold to off-shore and U.S. telemarketers and scam artists. If you recall, the Do-Not-Call list only applies to Canadian telemarketers.

As such, the Canadian Radio-television and Telecommunications Commission (CRTC) are unable to stop any calls coming from outside of Canada since it is out of their jurisdiction. When asked about what actions CRTC would take against telemarketers overseas, CRTC responded by saying they will take all complaints seriously and conduct investigations if an individual or organization is misusing the list. While CRTC is unable to stop incoming calls, they have the right to impose penalties in the form of fines ranging from $15,000 per call against a company or $1,500 per call against an individual. However, fines can go as low as one cent per call also.

Another tip to save you money

Need to locate a business? Forget 411, save this number on your phone 1-800-GOOG411. This is a new service offered through Google. You can find local business information anytime, anywhere, free of charge. It uses listing information provided by Google Maps, so if you need to update or add your business information, you can do so here. The more businesses updating or entering their information, the more helpful this service will be!

To use the service, just call 1-800-GOOG411 and state the location and business (category or business name) you are looking for. Currently residential information is not available.

Want more information about GOOG-411? Visit here.

If you have used this service already, what do you think of it? Did you get the information you were looking for?

More money in your wallet

Gas prices are falling! Do you remember the last time gas prices were in the 70s? Today's low is 74.9. Just a month ago, we were looking at gas prices around 101.405. One year ago, they were 106.808.

If you didn’t fill up your tank during the week, you will be paying more to do so this weekend. Gas prices are higher during weekends, than weekdays.

Save money. I have a great website for you. Visit www.londongasprices.com. This website compares all gas prices in the London Area, and it shows you where you can get the cheapest prices.

Telemarketers, do not call!

Starting September 30, 2008 you will be able to register your telephone, cell-phone, and/or fax numbers on the National Do-Not-Call List (DNCL). This list will contain the names and numbers of consumers who do not want to receive unsolicited calls from telemarketers. You can register up to three different numbers on the list, and will be responsible for re-registering them after a three-year expiry period.

Telemarketers are required to monitor the list and remove any numbers they find on it from their call lists. They will be allowed 31 days to update their lists, so you may continue to receive unsolicited calls for a few weeks after registering your numbers.

Bell will be responsible for registering numbers, providing telemarketers with up-to-date versions of the National DNCL, and receiving consumer complaints about telemarketing calls.

You can sign up by telephone, fax or email. Visit www.lnnte-dncl.gc.ca or call 1-866-580-3625 (DNCL) after September 30th to register your numbers. I know I will be!

Important Information About Your Rates

Effective July 1, 2008 you will begin to notice an increase in your gas bill. The Ontario Energy Board approved changes to the rates Union Gas charges its customers. They predict that most customers will see a total increase of $254.99 based on an annual volume of 2,600 m 3.

The gas commodity rate has increased by 7.3112 cents/m3. This change reflects the increase in Union Gas forecast cost to purchase natural gas for the next 12 months.

In addition, the change in the gas price adjustment is an increase of 2.0276 cents/m3. This change reflects the difference between the projected cost of natural gas that Union Gas expects to pay and the amount that Union Gas expects to recover through the current gas commodity rate over the next 12 months.

The gas rate is adjusted this way so that you are billed at a rate that more closely reflects the market price of natural gas and avoids large out-of-period adjustments.

The transportation rate has increased by 0.4676 cents/m3 to 3.5148 cents/m3. Delivery price increased slightly by 0.0224 cents/m3.

What is an "RSS Feed"?

Do you read blogs regularly? Have you heard of the term 'RSS Feed'? RSS stands for Really Simple Syndication, it is a way of letting you know that new posts have been added. You will know when a site has RSS when you can see this orange icon (picture shown above) at the top of your web browser or if the website you are looking at says it has RSS Feed.

If you click on the orange icon, it will show the feeds for the site. Click on 'Subscribe to this feed' at the top of the page, and you can now view all posts through your 'Favourites Center' in your browser, without having to visit the website. Any time a new post is added, it will automatically update to your feed.

Want to be notified anytime I make a change to my blog? Just click on the orange icon in your web browser.