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.

Get Rich, Stay Rich

March sales in our area rebound with a fury…yeah! Sales were within 7% of last year. I realize we had a pent up of buyers from the miserable winter we had but I am cautiously optimistic. Is our market dead? Nope, I don’t think so, I think we will remain stable and balanced.

I just read a book called “Get Rich, Stay Rich, Pass it on” by Catherine S. McBreen and George H. Walper Jr. Interesting read, a little repetitive for me however overwhelmingly this book goes on about owning investment real estate. The findings are based on 10 years or research interviewing thousands of families. It confirms what I call the “Department Store” effect. At any one point stocks are up and real estate is down or real estate is up and stocks are down. By investing in different areas helps insulate us from challenging times.

I am a REALTOR® so investment real estate works for me ;). Rental income produces a constant monthly return well into our future. In fact, it is something you can pass onto your heirs. Land, “if you can afford it”, can be easier to manage, bigger pay off usually longer hold pattern for a return.

First things first: credit card debt should be paid off monthly, your first investment should be your home and from there carefully consider what could work for you, do you hire a management company or do you take more of a hand’s on approach? Worth discussing further.

Everyone's circumstance is different. There are some very good (as Warren Buffet calls them) cigar butts out there that do not cost a lot of $ (investment) to enter the market. Interest rates are incredibly low, maybe it’s time to take advantage!

I always have time for a coffee or a juice!

Affordable Homeownership

I few months ago, I talked about the City of London Affordable Homeownership Assistance Program, click here to read it. There is a deadline of March 31, 2009 to expend the funding allocated to the City of London. To avoid returning any unused funds, the City of London has raised the household income limit and maximum home price under this program.

To be eligible, households must now have a gross household income of $55,000 or less and must qualify for and be pre-approved for a mortgage at a recognized financial institution. The new selling price of the home must be no higher than $140,000.

Applications are accepted on a first-come-first-served basis. You must find a suitable home by the deadline March 31, 2009. However, the actual closing date of the sale may be after the date.

Time is running out, have you found your home yet?

For details on the program or an application, visit www.housing.london.ca or call 519-661-2500 ext 5524

100% financing? Not anymore.

On July 9, the Department of Finance announced that it will no longer offer 100% financing or 40 year amortizations. You will however be able to obtain mortgage loan insurance for amortizations of up to 35 years and up to 95% of the value of the property.

So, if you were thinking of 100% financing or a 40 year amortization, you may have to take another look at your options. October 15, 2008 is when these changes are to take effect.

Get out your ID if you’re thinking of buying

Until recently, as of June 23 2008, real estate agents are now required to ask clients for identification.

Following the attack on the World Trade Centre, the Government of Canada introduced the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) late in 2001. This legislation introduced new regulations that required targeted “high-risk” industries, including real estate, to implement client identification and record keeping requirements.

The new requirements that agents must comply with are: record all funds received (unless funds are received from a financial entity or public body), and verify and record the identification of clients with respect to every purchase and sale.

What if owning your first home was within reach?

Affordable home ownership is more attainable than you think.

The Government of Canada, Province of Ontario and the City of London have partnered up to create the Canada-Ontario Affordable Housing Program (AHP). This program will help low to moderate income rental households in purchasing affordable homes.

Eligible purchasers may receive down payment assistance of 5% toward the cost of the home and another 1% to assist with closing costs. This is an interest free loan.

To see if you are eligible, and to get more information visit http://housing.london.ca/NewAffordableHousingProgram/HomeOwnership.htm
Funds are limited, so apply early!