The Blog

It feels like the summer co-op running the till at your local gas station is also making policies at the CRA. In April, I covered the back-and-forth on bare trust tax filing for regular folks. Now, in May, there’s been a massive mix-up over whether tenants of rental properties owned by foreigners need to withhold 25% of the rent for taxes. In a recent court case covered by the Globe and Mail, a tenant was held liable for this tax when the government failed to collect it from the landlord. He had to pay 6 years of back taxes and interests. Imagine telling your landlord you’re holding back 25% of their rent! Naturally, a social media storm erupted. To her credit, the minister responsible tweeted

In certain situations, getting a reverse mortgage to help your adult children buy a home makes sense. Let’s look at a case study to see how this works. Imagine an elderly couple who have lived in their family home for many years.They don’t want to move, and their home, valued at $1.25 million in the lower mainland, is fully paid off. If the home’s value appreciates by 3% annually, in 10 years, it would be worth $1.68 million. If they passed away then, their two kids would each inherit $840,000. That’s a substantial down payment, but by that time, the children would be 45 and 48 years old. Now, what if the parents took out a reverse mortgage at 7% so their children could get

Welcome to this month’s review of Metro Vancouver’s real estate market. Sales activity was slowing, and inventory was building up, but prices for detached homes and townhomes continued to climb. Not sure why that is. I would expect the price to drop a little.Sales in May are down 19.6% from the 10-year May average and down 19.9% compared to last May. Meanwhile, inventory is climbing at an above-average rate. The number of new listings in May is 7% above the 10-year average, while total active listings are 46.3% higher than last May and 19.9% above the 10-year May average. The trend in the sales-to-active listings ratio also points to a slowdown in demand. Typically, when this ratio is above 20% for sustained periods, prices rise.

The Federal Government has announced a couple of measures to help first time home buyers get into their first home. The first involves increasing the amount of money you are allowed to withdraw from your RRSP to purchase your first home from $35,000 to $60,000. You need to pay this amount back into your RRSP over a 15-year period. Previously you had to start this payback period within 2 years of the withdrawal. Now you can wait up till 5 years. But remember the First Home Savings Account is actually a better deal. Because you don’t have to be paid back the money into a FHSA, the money is never taxed! Second, the government is making 30-year amortization available to insured mortgages for first time

Starting June 25, 2024, the Federal Budget brings changes to capital gains taxes. Previously, when selling stocks or rental properties for profit, 50% of that profit was taxable. Now, the inclusion rate jumps to 66.7% from 50%. The good part of this bad news is that the first $250,000 per year of capital gains maintain it’s 50% inclusion rate for personal taxes. Also the selling of your principal residence will continue to be exempt from capital gains taxation. However, for investments within a corporation, every dollar of capital gains is subject to the new inclusion rate. This change might not sit well with small business owners who rely on investing retained earnings within their corporations for their retirement plans. In British Columbia, capital gains inside

Welcome to the May review of Metro Vancouver’s real estate market. The number of homes listed for sale in April have climbed substantially. The newly listed for sale numbers jumped over 40% in the month of April, from 4,994 to 7,092. This is 25.8% above the 10-year April Average for new listings. The total number of properties listed on sale in April is 16.7% above the 10-year April average. However, sales figures are keeping up with the inventory, in the sense that the sales-to-new listings ratio are kept relatively unchanged from the previous month. Typically, prolonged ratios above 20% is a recipe for price appreciation. The total sales are 12.2% below the 10-year April average. As shown in the table below, the price increase for

In recent years, I have heard that grey divorces, divorces among older adults, have been on the rise. But when I look at the stats, I do not find this to be the case. In fact, in Canada the divorce rate has been going down. Yay! And if you look at the divorce rate for 65 years and over, it has been steady for 3 decades. Interestingly, the phenomenon of increasing grey divorces is more characteristic of the United States, where, from 1990 to 2010, the divorce rate among those aged 65 and older actually doubled! This situation shows how easy it is to assume that trends in the U.S. apply to Canada as well. I wonder if this is why in a recent presentation,

Welcome to our March update on the Metro Vancouver housing market. The home sales are not catching up with new listings, but there is enough momentum to keep the prices in the upward direction for the month of March. In terms of number of sales, it was 31.2% below the 10-year seasonal average while total properties listed, it is 6.3% above the 10-year average. The Sales-to-active listings ratios are a measure of supply and demand. Generally anything above 20% is considered an indication for price appreciation. The ratios have not changed much from last month and the properties continue their price gains. Currently the market is anticipating the Bank of Canada to lower their rate by 0.25% in their June meeting. This means for people

There are 3 recent changes to incentive programs that aims to make housing accessible to more people. The First-Time Home Buyer Incentive (FTHBI) program which was introduced in 2019 has been quietly discontinued. The last submission will be March 21st of this year.The program was meant to help first time home buyers who are looking to reduce their monthly payment by having the government chip in for 5% to 10% of the purchase price. The problem is that the government will then share in the appreciation of your property, Another problem is that under this program you qualify for a smaller mortgage. So you are left with a very small and specific group that this program will make sense for. Few are going to miss