Please donate any of your gently used items to the
ROYAL LEPAGE 4TH ANNUAL NATIONAL GARAGE SALE FOR SHELTER!

SATURDAY MAY 12TH 7am to 12 Noon

Royal LePage Royal City Realty
25 Waterloo Avenue
Guelph, ON
(Corner of Waterloo Ave & Dublin)

We need your toys, books, games, tools, furniture, sports equipment, household items, small appliances, pictures and movies.

100% of the proceeds go to Women in Crisis – our local women and children’s shelter. In the last 4 years Royal LePage Shelter Foundation has raised 12 million dollars for 200 shelters across Canada.

Drop off your donations to 25 Waterloo Avenue on these specific dates & times:

•  Saturday, May 5th 10 a.m. to 2 p.m.

•   Wednesday, May 9th 4 p.m. to 7 p.m.

•   Friday, May 11th 4 p.m. until 7 p.m.

Pick up can be arranged – just call our office at 519-824-9050 or 519-821-6191.

(Due to health & environmental concerns we cannot accept electronic equipment, bedding, adult clothing, upholstered furniture or child car seats.)

Help us with the largest garage sale in Canada.

Will you join the cause?

These benefits are also available if you have previously owned a home but have sold it, and have not owned a home for the previous four (4) years and do not own a home at the present time.

a.    First-time Home Buyers’ Tax Credit
If you are a qualifying first-time home buyer, there is a federal credit of $750.00 you can claim against your personal income tax in the year you acquire a home.In order to qualify, neither you nor your spouse or common-law partner (who is defined as an individual cohabiting with you in a conjugal relationship for a continuous period of at least one year, or if they are the parent of a child born as a result of the relationship with you) must not have owned a home in the year of purchase or in the immediate prior four (4) years prior to the year of purchase. You must be purchasing the home for your own and your spouse/common-law partner’s personal occupancy, with that occupancy taking place within one (1) year from the Closing Date.

The tax credit can be claimed by one party, or else be shared between parties to a total maximum of $750.

b.    RRSP Home Buyers’ Plan
As a buyer, under this plan you can withdraw a maximum of $25,000 from your RRSP in order to buy a qualifying home in which you will live.  Additionally your spouse or or common-law partner can also withdraw a maximum of $25,000 from his or her RRSP to apply towards the purchase of the same property.

A withdrawal for this purpose does not result in tax being withheld from the monies withdrawn from an RRSP. To be entitled to exercise this option you and/or your spouse/common-law partner cannot have owned a home in the four (4) years prior to the year that you purchase the home. You must occupy the home within one (1) year of withdrawing the monies from your RRSP.

These RRSP monies must be repaid over a maximum period of fifteen (15) years from the date you withdraw them, commencing in the second year following that withdrawal date. The prepayment amount must be a minimum of 1/15th of the amount you withdraw; however, no interest is payable on the RRSP funds withdrawn.. The amount repaid can be made in each calendar year or within 60 days after the end of the year,i.e. February 28, which is the same time frame as that for making an RRSP contribution. Of course, the amount you are liable to repay is not deductible from your income for that year. However, if you do not make the minimum required repayment in any year, that amount will be included in your income for that year.

As an alternative strategy to the RRSP/Home Buyer’s Plan option, you can instead use a tax-free savings account (TFSA).  The TFSA program allows a maximum $5,000 yearly contribution to be made into a tax-free account; although the money contributed is not tax-deductible, it can be used to earn tax-free investment income and the funds can be withdrawn from the account without tax liability.   Since the program’s inception, if you have maximized your contribution each year, you would now have $20,000 in the TFSA which could be used towards a down payment.

There are various stipulations in connection with the use of a TFSA (such as a minimum age of 18), but there is a broad array of investment options such as mutual funds, individual stocks, Guaranteed Investment Certificates and bonds

A third alternative is to combine the funds from your RRSP and your TFSA; this is yet another very favourable option if you want to have a larger down payment when purchasing a home and you wish to minimize both the tax consequences and the amount you will have to borrow in the form of a mortgage.

http://www.canadianrealestatemagazine.ca

The Canadian Real Estate Association said sales dropped and prices moderated in January, with the weakness spread among more than half of the country’s cities. Sales in Vancouver and Toronto slowed to a crawl, with few houses available to would-be buyers.

The low number of listings means there could be a rush of sellers trying to capitalize on the spring market, keeping a lid on the bidding wars that have driven prices sharply higher in some of the country’s largest markets.

“There is really a lack of product,” said Phil Soper, president of Brookfield Residential Real Estate Services, which operates Royal LePage. “We expect that to pick up considerably, and by the end of March Break you’ll really be able to gauge the Canadian market’s health. Or lack of health.”

Canada’s sizzling property market has made headlines around the world, and so far defied some predictions that it’s a debt-fuelled bubble bound to pop. Forecasts for home prices for the next several years vary wildly – with economists and analysts predicting everything from a 25 per cent drop to modest gains.

The latest figures suggest a levelling off. Home sales across the country were down 4.5 per cent in January from December, the sharpest monthly decline since July, 2010.

Average prices were 2 per cent higher than a year ago at $348,178, the smallest year-over-year increase in the past year.

It’s not the first sign that the much-talked-about slowdown may have arrived.

The Teranet-National Bank index, an alternative measure of price gains that lags CREA by several months, showed prices dipped 0.2 per cent in November, marking the first drop since the fall of 2010.

In Toronto, the bidding wars have largely given way to a market where houses sit longer and sell for closer to their asking price, said Richard Silver, president of the Toronto Real Estate Board. But hot neighbourhoods continue to fetch top dollar, especially considering the lack of listings.

Matthew Slutsky, chief executive officer of real estate site BuzzBuzzHome.com, has been trying to buy a house in one downtown neighbourhood for months. Along with his wife Carlie Brand, he’s been popping letters in mailboxes imploring their owners to consider a sale.

“I really hope it’s the calm before the storm and more listings pop up,” he said. “Right now it feels like we are auditioning for a house, and I don’t know if I want to wait and see what happens in the spring.”

There’s been a sense of unease surrounding Canada’s housing market for more than a year. The federal government tightened its mortgage qualification requirements to try to prevent buyers from taking on too much debt in a low-interest-rate environment, and the Bank of Canada has issued a steady stream of warnings about high levels of household debt.

The fear is that rates will rise as the economy improves, and many people who could afford their house when interest rates were low may find those same houses unaffordable as rates rise. Financial turmoil in Europe also has many market watchers concerned, with any default in Greece expected to have ripple effects around the world.

Lenders such as Gerry Soloway, CEO of Home Capital Corp., have cautiously tightened their lending standards in recent months as the economy wobbled. But he doesn’t see prices crashing any time soon, even if things slow down considerably.

“I just don’t see the catalyst for a big price drop,” he said.

It’s a theory echoed by Ross McCredie, CEO of Sotheby’s International Realty Canada, who recently had 16 buyers check out a $2.5-million home in Toronto.

“We are finding if the home is priced right and a quality home, it is moving fairly quick,” he said. “Too many people who are listing are expecting prices well above the market. We are spending a lot of time with our agents to ensure we are only taking on listings at the right price.”

www.theglobeandmail.com

There is always a fine balance between leverage and cashflow. Leverage is one of the key benefits of investing in real estate. It’s a way of reaping the rewards of the value appreciation on a property while using only a small amount of your own money in the form of your down payment.

However, an astute investor recognizes the importance of having adequate cashflow. Although the idea of getting into an opportunity with no-money down may seem appealing, it’s important to recognize that the more leverage you use, the less cashflow you will see.

During prosperous times this may be okay; however, all you need is an unexpected vacancy or untimely repairs and you will quickly watch your reserve funds dwindle. Think of cashflow as the tap that constantly replenishes your water supply. It helps keep you afloat when times are tough.

Let’s take a look at a quick example to show the impact of purchasing a $150,000 property with a 25% down payment versus a no-money-down purchase. In the no-money-down scenario, let’s assume that the investor negotiated a vendor take-back mortgage (VTB) with the seller for 25% of the purchase price.

Based on the above example, it’s clear that with an unexpected vacancy the investor would have to carry a much larger load with no money down. Also, the VTB payments are interest only. This means that at the end of the term they would have to make a balloon payment, which they may not have, especially if the property value hasn’t appreciated enough for them to be able to re-finance and pay out the VTB.

So, although it would be enticing to start investing without any money down, the ramifications of doing so could leave a bad taste in the investor’s mouth if ideal conditions aren’t met. Make sure there is sufficient cashflow to cover the additional burden of the VTB.

As Canadians, we pride ourselves on our financial conservatism. Most recently, the strength of our banking system has helped Canada weather the recent global economic turmoil. Canadians recognize the importance of maintaining an appropriate amount of equity in our properties and we do this by usually making a minimum 20 – 25% down payment. The point is that we recognize that leverage can be a powerful tool but has to be used wisely.

Having investment properties that provide positive cashflow means that you are getting a real return on your money today. It’s actual cash that goes into your pocket every month. Whereas, the other real estate profit centers are longer-term and can’t be accessed as easily. Appreciation and mortgage pay-down provide a return on your investment, but it’s not a return that you can appreciate until you either sell, or re-finance your properties.

www.canadianrealestatemagazine.ca

 GREAT STARTER HOME OR INVESTMENT!
This bright town home is conveniently located close to Zehrs, shopping and has a bus stop outside the front door that goes directly to the University of Guelph in 5 minutes! Upstairs has two spacious bedrooms each with two windows and large closets. One could likely be divided to increase the number of bedrooms to three. The main floor has a cozy living room and an eat in kitchen. Downstairs has its own 3-pc bathroom, another huge bedroom and a laundry room. Each unit comes with a designated parking spot and additional spaces are available to rent for only $45/mo. This well run complex has low monthly fees, making this home a great starter or investment! Call for an appointment to view today!

 PERFECT HOME TO LIVE AND PLAY!

TAKE THE VIRTUAL TOUR

This is the perfect place for the discerning buyer.  Inside this south end condo town home you will find an exquisite oasis with warm designer colours.  The main floor has a pleasing open concept layout so you can have guests conversing in the kitchen, snuggled up to the warmth of the gas fireplace or taking in the fresh air on the spacious deck which is just off the kitchen eat-in area. The kitchen is perfect for entertaining with loads of counter space, white cupboards, built-in dishwasher and microwave, attractive granite counters and a large peninsula for extra prep space. Upstairs you will find new chocolate brown carpeting, refurbished main bath and three bedrooms.  The master bedroom is spacious with double closets and a light filled interior thanks to the large palladium window.  The basement certainly won’t disappoint you with its finished space, laminate flooring, convenient 4 piece bath, storage area and direct access to the garage.  This complex has added features including tennis courts and a pool for those hot summer months and is just steps to shopping, restaurants, parks and more. Pride of ownership is very evident and we think this one is a winner!

Take the Virtual Tour or view the Photo Gallery

It is important to know the distinctions between a cross border trust which is heavily promoted throughout Canada and a Florida Land Trust which can be tailored to meet the needs of Canadian Buyers.

Both trusts when properly drafted can be effective at avoiding probate, as well as estate taxes at death and still allow individuals to maintain the benefit of only paying 15% capital gain in the U.S. upon profits of sale provided the property is held for 365 days or more.
Under our present tax treaty the amount paid in the U.S. tax paid can be credited against the sums due to Revenue Canada.

However, the main difference between the two trusts is the flexibility a Canadian Florida Land Trust provides.

Cross border trusts are irrevocable and cannot be changed. In contrast, Florida Land Trusts are revocable and may be modified at any time. With a Cross Border Trust to avoid estate tax you are basically gambling on which spouse is first to pass away. With a
Florida Land Trust there is no uncertainty as the holder of an enhanced life estate interest that has no value at the date of death and their children or designated successors will not be required to file an Estate Tax Return or probate. The successors simply step into the shoes of the original purchaser for computation of capital gain tax, if any, at a later date.

The following is a email written by Attorney Ron Webster in reply to a question from a Canadian Realtor. I am including it because to me it gets to the meat of the matter in rather simple terms.

“Thank you for your note. If you set up a land trust you can avoid both probate as well as any estate tax upon death. Simply your beneficiaries would step into your shoes as far as the basis is concerned and only pay a tax (presently 15%) in the US on the capital gain
which would be credit against the amount owed to Revenue Canada.

It is not advisable to hold the title in a Canadian Trust if you ever plan to use the property
personally…if so this would trigger taxes to Revenue Canada. One land trust could be used
for numerous properties. LLC’s are not the way to go for countless reasons.

The cost to set up a land trust is between $595.00 and $695.00 depending upon the complexity of beneficiaries, etc.

Barry Kay
Premiere Plus Realty Co.
Naples, FL