GTA Housing Market

The Greater Toronto resale housing market closed out the last full month of summer at a steady pace, Toronto Real Estate Board President Maureen O’Neill reported today.

The Greater Toronto Area (GTA) average price increased 1%, to $364,886 when compared to last August’s figure of $361,890. In the City of Toronto the average price declined 1% to $377,990 from last August’s $381,681. Compared to the August 2006 figure of $344,419 however, the average price in the City of Toronto has increased 10%.

In the 905 Region the average price increased 2% to $356,657 from last August’s $348,563. Compared to the August 2006 figure of $334,245 the average price in the 905 Region has increased 7%.“These healthy figures substantiate that when undertaken as a long term investment, buying a home is one of the smartest financial moves you can make,” said Ms. O’Neill.

Several neighbourhoods throughout the GTA experienced increased sales activity last month compared to August 2007. In Pickering transactions rose 6% based primarily on strong semi-detached home sales. And in Halton Hills strong attached/row house sales activity lead to a 3% increase in transactions overall.

Condominium apartment and detached home transactions drove Rosedale to an 81% increase in overall sales. Detached home transactions also contributed to an 11% overall increase in sales in Aurora.

9 Ways to Visually Create More Space

Many people think of adding square footage to create more space. But that doesn't have to be the case! You can make your home appear bigger without going through the hassle of renovating and remodelling. With just a few home modifications , it is possible to make more from less. And remember, often what the eye needs is the illusion of spaciousness not actually more space. Here's how to create the illusion of space without adding square footage.

1. Think diagonal views. Think back to geometry and how the hypotenuse of the triangle was the longest of the three sides. Apply that to the sightlines within your small-house design. Your house will appear much bigger than it actually is if you are able to stand at one corner of the house and look to the far corner without any obstructions. Also, if you have a room that will be tiled, place the tiles on a diagonal. It makes the space seem larger visually, pushing the walls out. Great trick!

2. Think like a sailor. Sailboats usually have no wasted space and that's what you should aim for. Look for opportunities for built-ins, such as building bookshelves in staircases, unique space-saving cabinets, drawers under beds, etc.

3. Lighting will open up space and add interest. In creating the feeling of more space, it is important to give your house an airy feel. Use simple window dressings to bring in natural light and steal space from the outdoors and give it to the interior of the house.If possible, use recessed spot lights as they are both visually appealing and have a low profile that is perfect for a small space.

4. Play with the furniture. Try to move furniture away from the walls if the space allows. It will give a feeling of more openness when a sofa isn't butted against a wall. If you're buying new pieces, try to purchase items that are on legs versus feet. The higher a piece sits from the floor, the more visual space is present. Also, armless pieces give an illusion of extra space so consider an armless sofa or slipper chairs.

5. Accessorize. The bigger a piece of artwork is, the bigger the feeling of a space. A wall filled with many small pictures seems cluttered and less dynamic versus a wall with a large piece of art, which makes a bold statement. Also, "lighten up" your corners by using lights and plants. It will look stunning at night, casting shadows on the ceilings and giving an illusion of more space.

6. Mirrors to reflect light. When using mirrors in a space, make sure that whatever the mirror is reflecting it is pleasing to the eye, or at least doubles the amount of light let into the space. In addition to mirrors, use other materials that reflect light and space (stainless steel, chrome, etc). A glass table with stainless steel legs will allow light to bounce off it.

7. Colour your world. The colour of a room’s walls has the power to create a mood and affect the room’s appearance. Use just one or two colours per room for visual simplicity that expands a space. Also keep in mind that white, neutral or pale colors best reflect light, visually "pushing back" walls. Cool blue and green hues will make a space seem larger and airier. Warm reds and yellows cozy a room and can make it appear smaller.

8. Let there be height. Use at least one tall element in a room to draw the eye upward, towards the ceiling. Not only does this maximize the vertical space in the room, but it also draws the eye up to the less crowded ceiling space above.

9. Minimize the amount of furniture you have in each room. It is both wise and essential to select furniture and accessories that perform multiple tasks. The smaller your space, the more this applies, especially with furniture. Storage is an obvious second job for many pieces of furniture.

Every room has good proportions which make its space flexible enough to create any environment you wish. Compromises in decorating, colour techniques, furniture arranging and lighting considerations can all contribute to the illusion of space. By following some of the tips above, you can create a visually larger room.

Humewood Fall Fair

It's that time of year again!
Be sure to visit the Humewood Fair on Saturday October 4th from 10am - 3pm.
There will be silent auctions, games & music. Fun for the whole family!!
Humewood Public School - 15 Cherrywood Avenue, Toronto.

New Toronto Land Transfer Tax Info

Programs

First-time buyers of new and re-sale homes are eligible to receive rebates of the provincial and Toronto land transfer taxes. The maximum provincial land transfer tax (LTT) rebate for first-time buyers is $2,000 and the maximum Toronto LTT rebate for first time buyers is $3,725. A FULL rebate of the Toronto land transfer tax is also available for ALL buyers who entered into Agreements of Purchase and Sale prior to December 31, 2007.

Details Provincial LTT

• Provincial LTT is payable anywhere in Ontario (including Toronto).
• Maximum provincial LTT first-time buyer rebate is $2,000 (equivalent to the provincial LTT payable on a $227,500 property).
• For RESALE homes, the provincial rebate applies only to first-time buyers who entered into Agreements of Purchase and Sale AFTER December 13, 2007.
• First-time buyers of NEWLY CONSTRUCTED HOMES are eligible for the provincial rebate even if they entered into Agreements of Purchase and Sale prior to December 13, 2007.
• The provincial LTT for residential properties is calculated as follows (An easy-to-use calculator is available at http://www.nohomebuyingtax.com/):

* 0.5% of the amount of the purchase price up to and including $55,000, plus o 1% of the amount of the purchase price between $55,000 and $250,000, plus
* 1.5% of the amount of the purchase price between $250,000 and $400,000, plus
* 2% of the amount of the purchase price above $400,000

Toronto LTT

• Toronto LTT is payable only for properties in the City of Toronto.
• Maximum Toronto LTT first-time buyer rebate is $3,725 (equivalent to the Toronto LTT payable on a $400,000 property).
• ANY purchaser who entered into an Agreement of Purchase and Sale prior to December 31, 2007 is eligible for a FULL rebate of the Toronto LTT.
• Toronto LTT rebates are in addition to any provincial LTT rebate that the buyer qualifies for.
• The Toronto LTT for residential properties is calculated as follows (An easy-to-use calculator is available at http://www.nohomebuyingtax.com/):

* 0.5% of the amount of the purchase price up to and including $55,000, plus
* 1% of the amount of the purchase price between $55,000 and $400,000, plus
* 2% of the amount of the purchase price above $400,000

First-Time Buyer Eligibility

To be eligible as a first-time buyer for the provincial LTT rebate and/or Toronto LTT rebate,
• The purchaser must be at least 18 years of age.
• The purchaser must occupy the home as his or her principal residence no later than nine months after the date of the conveyance or disposition.
• The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.
• If the purchaser has a spouse, the spouse cannot have owned a home, or had any ownership interest in a home, anywhere in the world while he or she was the purchaser’s spouse. If this is the case, NO refund is available to either spouse. Note: If a purchaser’s spouse owned an interest in a home BEFORE becoming the purchaser’s spouse, but not while the purchaser’s
spouse, the purchaser may be eligible for some rebate.

More Information

Provincial LTT: Ontario Ministry of Finance: 1-800-263-7965
Toronto LTT: City of Toronto: 416-338-0338

Smoke Alarms

Don't forget to check your Smoke Alarms this fall - it can save your life!

Bess
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As of March 1, 2006, every home in Ontario is required to have working smoke alarms on every storey or level, including basements. According to information from the Ontario Fire Marshal and as drafted in the Ontario Fire Code, “a smoke alarm is required to be installed between each
sleeping area and the remainder of the dwelling unit. Where the sleeping areas are served by hallways, the smoke alarms must be installed in the hallways.” In addition, at least one smoke alarm is required to be installed on each storey that does not contain a sleeping area. Non-compliance with the Ontario Fire Code smoke alarm requirements can result in a ticket for $235 or a fine of up to $50,000 for homeowners, tenants and individual landlords, and up to $100,000 for corporations. The Ontario Fire Code has specific methods for determining what is considered a storey in a dwelling unit. For detailed information on this and other aspects of this new requirement, please see the Ontario Fire Marshal’s web site (www.ofm.gov.on.ca) and click on “Working Smoke Alarms: It’s the Law”, and then on “Q&A’s”.

First Time Home Buyers Use RRSP's to Buy a House

The Federal Home Buyers Plan allows first time home buyers to withdraw up to $20,000 from their RRSP for the purpose of buying or building a qualifying home. The primary benefits are that the RRSP issuer will not withhold tax on the amount nor will you have to claim the amount as income. The amount must be repaid to the RRSP within 15 years with a minimum annual payment of 1/15th of the amount withdrawn. If a repayment is not made for a given year the minimum repayment is included as taxable income for that year.

Participation

To participate you have to withdraw the amount from your RRSP using form T1036 Applying To Withdraw An Amount Under The Home Buyers Plan. Give the completed form to the RRSP issuer along with the certification that you meet or intend to meet certain conditions as follows:

Conditions

* You have to make your withdrawal request in the same year you wish to participate in the Home Buyers Plan.
* You cannot have previously participated in the plan in previous years.
* You have to be a resident of Canada.
* You have to enter into a written agreement to buy or build a qualifying home.
* You can withdraw a total of $20,000. Multiple withdrawals are allowed. Each of you and your Spouse can participate in the Plan and withdraw $20,000 from your own RRSPs.
* You have to be considered a First Time Home Buyer.

A qualifying home is a housing unit located in Canada. Existing homes and homes under construction are both qualifying homes and can be either:

* Single Detached Family Homes
* Semi Detached
* Town Home
* Mobile Home
* Condominium Unit
* Apartment in a Duplex, Triplex, Fourplex or apartment building.
* A Share in a Cooperative Housing Corporation, provided the share entitles you to posses, and gives an equity stake in, a housing unit.

First Time Home Buyer

You are considered a first time home buyer if you have not owned a home while you occupied it as your principal place of residence for five years. At any time in the fifth calendar year since you last owned a home you can qualify.

Should You Take Money Out of Your RRSP For A Home Purchase?

Withdrawing $20,000 from your RRSP under the "Home Buyers Plan" can be viewed as a loan from your RRSP to yourself. Some call this a zero interest loan but of course the actual cost of the loan is exactly what the funds would have earned if they had remained in your RRSP. You will forego these earning if you take the funds out and use them for a down payment. On the other hand if you don't withdraw these funds you will be forced to borrow the required down payment.

Lets assume you have $20,000 in your RRSP at an average annual rate of return over the next 15 years of, say 8%. In 15 years your $20,000 will have grown to $63,443, an increase of $43,443. As such if you withdraw these funds under The Home Buyers Plan, while you won't suffer taxes, you will forego these earnings.

Most financial advisors will counsel you to borrow to invest in your RRSP because the "overall" rate of return from your RRSP is greater than the cost of borrowing the money. The cost of borrowing $20,000 in a catch up loan over 15 years is usually in the neighborhood of Prime, plus or minus a percentage point, depending on the risk of the RRSP investment. Assume a cost of 7.5% over the 15 year amortization of the loan. The interest paid to borrow $20,000 would be $13,372. If we also assume a 35% tax rate, you would have to earn $20,572 of gross income in order to net out these interest costs.

We can now compare the before tax cost of borrowing - around $20,572 - with the before tax return this $20,000 would earn in your RRSP - around $43,443. Clearly it makes sense to borrow to invest in your RRSP. Conversely, it should also make sense to leave the money in your RRSP and borrow your down payment, one being the same as the other.

In reality, no mortgage lender will finance 100% of your purchase price. In addition, your lender will qualify you for a larger mortgage, based on gross income, if your debts are lower and don't include a large personal loan for the down payment. A personal loan or second mortgage is a debt that squeezes the maximum mortgage amount you will qualify for if it puts you above the lenders target debt service ratios.

In addition withdrawal under the Home Buyers Plan may be more cost effective than borrowing if this borrowing cost also includes a CMHC fee. This fee can dramatically push up your effective interest rate. If you're just shy of a conventional down payment of 25% it may be wise to withdraw the remainder from your RRSP to avoid paying mortgage insurance fees.

The best approach is to withdraw from your RRSP under the Home Buyers Plan, get all the financing you qualify for, and then once the mortgage is funded borrow to replenish the RRSP if you can afford the payments. Remember you'll also have to pay back your RRSP 1/15th each year.

Flush with Savings - Residential Toilet Replacement Program

Municipal governments across the GTA have been initiating toilet replacement programs.
Information on these programs will be posted as they become available. Below, you will find information from the City of Toronto and Peel region.

Bess

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City of Toronto Flush with savings-Residential Toilet Replacement Program

Replace your water-guzzling toilet with a new water efficient model. Get money back, save on your water bill and reduce water use. The City offers Toronto residents a $60 or $75 cash incentive to replace a water-guzzling toilet (per toilet) with a City-selected water efficient model. Residents must live in detached houses, semis, duplexes (buildings with up to six units), ndividual condos and townhouses.

1. Register for the program by calling 416-392-7000 (during business hours from 8am-4:30pm), or by providing your name, mailing information, phone number and the number of toilets you would like to replace at: savewater@toronto.ca

2. Select a toilet from the City-selected list.

3. Purchase a toilet at most retailers in the City of Toronto.

4. Install your new toilet.

5. Dispose of your old toilet.

6. Return the completed application form and original sales receipt(s) to:

Toronto Water
Water Efficiency Program
Metro Hall, 19th flr
55 John Street
Toronto, Ontario M5V 3C6

Be sure to include your water account number. The city recommends that you make a copy of your completed application form and receipt(s) for your own records. Do not fax applications.

To be eligible for the program you must:

• own or rent residential property in the City of Toronto (includes detached houses, semis, duplexes (buildings with six or less units), individual condos and townhouses).

• have existing toilets with a flush volume of 13 litres or more (Toilets with markings of 6 Lpf or 1.6 Gpf on the toilet bowl behind the seat or inside the toilet tank.