HST - Harmonized Sales Tax Explained

The long standing controversy on bringing Ontario a Value Added Tax ended permanently on June 18, 2009, when the Ontario Provincial Government announced the implementation of the Harmonized Sales Tax (HST). The effective date of this new tax will be July 1st, 2010.

This tax is called a Harmonized Sales Tax because it will effectively replace the 5% Federal Goods and Services Tax (GST) and the 8% Provincial Sales Tax (PST) thereby creating a combined 13% harmonized sales tax.

The HST will be very similar to the current GST, and as such it does not apply to the sale of resale residential properties. The new tax will apply to all real estate commissions, home inspection services and legal fees which were previously exempt from PST (8%).

The largest impact to the real estate industry will be in new construction, which will include all single family dwellings, semi-detached, condominiums and even mobile homes. The new tax will capture properties that have undergone substantial renovations, as well as vacant land. When purchasing a new home, be mindful of agreement clauses referencing taxes and specifically who is responsible for the payment of such taxes (provincial versus federal).

For properties that have undergone substantial renovation or new construction, the HST will not apply if the transaction closes before July 1, 2010 or the agreement of purchase & sale was dated prior to June 18, 2009 (even if it closes after June 30, 2010), this is effectively known as “grandfathering”. Be careful of any changes to an agreement of purchase & sale where the property is transferred after June 30, 2010 as it may invoke the HST.

In the case of new construction, if the possession and the ownership are transferred prior to July 1st, 2010 then provincial portion of the HST does not apply. If the possession or ownership of a new construction unit is transferred after June 30, 2010 then the provincial portion of the HST does apply, unless the transaction is grandfathered.

Other HST exemptions include anyone who enters into an agreement of purchase & sale before June 18, 2009 to close after June 30, 2010 and the purchaser assigns their interest via an agreement of purchase & sale to a new buyer (called the assignee). Then the assignee might not be responsible for HST, in most circumstances. However, any profit earned by the original purchaser may be subject to HST.

There are also transitional rules for the treatment of tax on real estate commissions based on the state of completion of the subject property. If the property is less than ten percent (10%) completed on July 1st, 2010 then HST will be payable on closing; if the property is greater than ten percent ( 10%) and less than ninety (90%) complete then HST will be based on the percentage of work completed; if more than ninety( 90%) completed then HST should not be payable.

It is important that you discuss your specific transaction with your real estate lawyer to ensure that any nuances or particulars are fully captured or addressed from the HST perspective. Please keep in mind that the tax is still subject to interpretation as revisions may still come forward prior to implementation.

Upgrade your home insulation today and you could be eligible to receive up to $1,000

The City of Toronto is pleased to offer HEAT – Home Energy Assistance Toronto – a new incentive program designed to help you save money and the environment.

Make your home more energy efficient with new insulation, and receive up to $1,000.

Eligible homes include low-rise residential properties, such as detached, semi-detached or town homes.

Just follow these 3 easy steps to apply:

1. Assess your home for energy leaks
Book a certified energy advisor to evaluate your home‘s energy efficiency. Learn ways to improve your insulation, and other measures to reduce your energy use.

2. Renovate your home
Upgrade your insulation and receive up to $1,000 from the City, plus another $7,500 in federal and provincial rebates. Improve other items, such as your heating and cooling system, windows and doors, and leverage even more funds – up to a combined $11,000!

3. Measure your energy savings and be rewarded!
Book your advisor to verify your home improvements and submit your grant application, which will be used by all three governments. No additional paperwork is required. Simply wait for your cheques to arrive.

Visit www.livegreentoronto.ca or call 311 for more information.

RBC: Bank of Canada -- committed to low rates

SOURCE: RBC ECONOMICS

The Bank of Canada left the overnight rate at 0.25% this morning and maintained its assessment of risks to the outlook as being balanced based on macro considerations. The Bank removed the statement about risks being "tilted slightly to the downside" because policy is operating at the effective lower bound and did not allude to its ability to use alternative measures to provide additional easing when the policy rate is at the effective lower band. The central bank, however, reiterated its conditional commitment to keep the policy rate at its current level "until the end of the second quarter of 2010" in order to ensure that inflation stays on course to meet the medium-term target.

The Bank acknowledged that the economy was "slightly" stronger than expected in the fourth quarter of 2009 although it reiterated that the "persistent" strength in the Canadian dollar and weak U.S. demand continues to provide downside risks for Canada's recovery going forward. On the other hand, the Bank cited "vigorous" domestic spending and rebounding exports as providing support to the economy in the final quarter of last year. The Bank pointed to stronger than expected global and domestic demand as providing upside risks to the outlook.

On inflation, the Bank highlighted that the core rate "has been slightly firmer than projected" pointing to both transitory factors and the faster pace of economic growth. Going forward, the Bank presented upside and downside factors for the inflation outlook citing the strength in domestic demand as well as the abundant slack in the economy and weakening wage growth.

Two key changes were made to the statement that indicates that the Bank is edging its way toward removing the extraordinary level of monetary policy stimulus. The Bank removed the statement that the overall risks to the outlook are "tilted slightly to the downside" as a result of policy operating at the lower bound. As well, the Bank did not repeat that it retains "considerable flexibility" in the conduct of policy at lower rates suggesting that the need for additional easing of policy has become increasingly unlikely. The stronger than expected report on the fourth quarter and improved labour market are consistent with a gradual removal of the accommodation being supplied to the economy. The winding down of its liquidity support programs is already underway and the first step toward removing monetary policy stimulus.

We expect that Canada's economy will grow at an average 3.6% pace in the first half of 2010 although the large output gap generated during the recession means that the core inflation rate will remain below the Bank's 2% target until late 2011. This will allow the Bank to proceed slowly with rate increases in order to ensure that the economy's positive momentum is not disturbed. We expect the Bank to increase the overnight rate by 100 basis points in the second half of the year as it begins the process of adjusting monetary policy toward a more neutral stance.

Housing Market Update - First Quarter 2010

The 2010 Prognosis for the Central Toronto Real Estate Market

Coming off a record 2009, the Toronto Real Estate Market for all intents and purposes is poised for a very healthy spring and early summer market. The momentum of the past six months coupled with the low listing inventory has fuelled buyers thirst for quality properties. Even in this hot market, overpriced properties will stagnate while well priced quality properties are finding willing buyers and even multiple offer scenarios.

The threat of rising interest rates later in the year is propelling many buyers to act now rather than wait out the market. The Bank of Canada’s commitment to hold the current policy rate until the second quarter of 2010 effectively serves as a catalyst for many prospective buyers. The subsequent caveat being that the Bank of Canada rate freeze is purely conditional and is subject to change should the economy take an unexpected path.

Historically, the annual real estate market has had two dramatic bell-type curve components – one in the spring and one in the fall. The summer and winter months, generally fall in the lower areas on the bell curves. The winter of 2009 wrote a different page in the history books of the Toronto real estate market, as the market did not slowdown. Multiple offers continue to be prevalent, even during the holiday period and subsequently continued into the early weeks of January 2010.

As we enter January in the Central Toronto market, inventory levels are still quite low; buyers are abundant; there is an ominous Harmonization Sales Tax looming over Ontario in July; and the Renovation Tax Credit is concluding in the weeks ahead. Some speculate that many sellers have been holding off bringing their properties on the market in order to take advantage of the Renovation Tax credit.

With consumer confidence building in the economy, we should see resale listing inventory levels start to rise in the coming weeks. The pent-up demand of unsatisfied buyers and the increased inventory should move us towards a more balanced market in the first few months of 2010.

As we experienced with the poorly thought out Toronto Land Transfer Tax, there will be an increased impetus from buyers to purchase before the HST deadline along with some sellers wanting to avoid the increased tax hit.

Post implementation of the HST, we anticipate a cooling down period for a few months as buyers, sellers and real estate professionals rest up before the start of the fall market in September.

The fall market should see a return to more balanced market where supply more closely matches demand, with the only caveat being that if rates do remain low then buyers may deplete the available supply. The prognosis overall is that the Toronto real estate market is excellent, given the net influx of migrates; the entry of many first time buyers; and the relocating baby boomers. Toronto’s world class stature will continue to be a haven for people looking to live and work in a safe, vibrant, world class environment and ensure the longevity of a healthy central Toronto real estate market well into 2011.

Economic Iinstability Number One Fear for Canadian Home Buyers: Royal LePage

Buyers remain nervous about the economy but few believe house prices will drop again, according to Royal LePage Advisor Survey

As the Canadian real estate market continues to rebound from a steep decline a year ago brought on by the recession, home buyers remain nervous about the stability of the economy, according to a survey of 1,225 Royal LePage agents and brokers across Canada. However, few buyers think home prices will decline again.

When asked to comment on the most common fears they are hearing from home buyers over the past three months, 38 percent of Royal LePage agents and brokers cited economic stability and related factors such as job security. 23 percent said home buyers fear they may not be able to sell their existing homes at the price they are hoping for, while 12 percent said buyers are hesitant because they believe prices have not yet hit the bottom of the cycle. Twenty percent of agents and brokers said they are not hearing any concerns from buyers.

The Royal LePage Advisor Survey, conducted online in November 2009, also found that an increasing number of Canadians are purchasing homes as investment properties, and almost 50 percent of brokers and agents say the number of buyers intending to renovate their properties after purchase is increasing.

“Given the volatility in the real estate markets over the past 18 months, it is not surprising that the state of the economy continues to weigh on the minds of Canadians as they consider buying a home,” said Phil Soper, president and chief executive, Royal LePage. “Canadian real estate markets are enjoying a strong recovery as 2009 draws to a close and appear poised for healthy growth in 2010. Our survey shows that consumer confidence is edging towards normal levels. Canadians clearly believe that the worst of the recession is behind them and that the real estate market is on the path to sustainable recovery.”

“The most obvious sign that market conditions are improving is found in the significantly higher unit sales volumes. That said, we have seen some significant recent increases in home prices, which is unusual at this time of year. Paradoxically, the recession is contributing to the unexpected rise in year-end house prices. On one hand, Canada’s low interest policy has stimulated demand. On the other, many Canadians who might otherwise feel comfortable putting their homes on the market don’t yet have the confidence in the state of the economy’s recovery to list their homes, which is contributing to the current supply shortage,” Soper added.

According to the Royal LePage House Price Survey for the third quarter of 2009, the economic recession halted the flow of the real estate cycle from the fourth quarter of 2008 through the first quarter of 2009, but the market is essentially now back on track. Although the supply of homes for sale continues to be constrained in many markets across Canada, Royal LePage predicts that once housing supply returns to normal levels, the economy will support modest pricing growth into 2010.

Federal Government Ready to Deflate Any Housing Bubble

Below is an article regarding an interview with Finance Minister, Jim Flaherty, that came out before the holidays.

Federal Government Ready to Deflate Any Housing Bubble: Flaherty
Andrew Mayeda, Canwest News Service
Friday, Dec. 18, 2009

OTTAWA -- The federal government is ready to clamp down further on mortgage rules if the boom in the Canadian housing market turns into a bubble, says Finance Minister Jim Flaherty.

In an exclusive interview with Canwest News Service and Global National, Mr. Flaherty said the government is closely monitoring the red-hot housing market for signs that it is reaching "irrational" levels.

"The reality is we have low mortgage rates...so we can expect some upward pressure on housing," he said. "That's OK, as long as it doesn't become a bubble.
We're watching that."

If necessary, the government is prepared to further tighten the conditions under which the Canada Mortgage Housing Corporation insures mortgages, the finance minister said.

In July 2008, amid the fallout from the sub prime mortgage crisis in the United States, the Finance Department announced that CMHC would shorten the maximum amortization period that it will accept to 35 years from 40, as well as require a down payment of at least 5% of the value of the home. The new rules, which came into effect in October 2008, effectively made it more difficult for prospective homeowners to receive government-backed mortgages.

"If we have to, we'll do what we did last year and limit the rate of amortization further than we already did, and require higher down payments," said Mr. Flaherty.

His remarks come as some leading private sector economists warn that the housing market might be getting ahead of itself amid a relatively modest recovery. In a recent report, Bay Street economist David Rosenberg estimated that housing prices are overvalued by as much as 15 to 35%. This week, the Canadian Real Estate Association reported that sales of existing homes spiked 73% year-over-year in November, while the national average sale price rose 19%.

"If being 15% to 35% overvalued isn't a bubble, then it's the next closest thing," said Mr. Rosenberg, chief economist for investment firm Gluskin Sheff.

In recent weeks, Bank of Canada governor Mark Carney has expressed concern about the amount of debt that Canadian households have been racking up since the central bank cut its benchmark lending rate to near zero. Mr. Flaherty also wants to remind Canadians that the easy money won't last forever.

"Interest rates are at historic lows. They are naturally going to go up," said Mr. Flaherty. "People have to make sure that the mortgage on their home that they've put on today will be affordable at higher interest rates in the future." The discussion of a potential housing bubble shows how much the economic climate has improved since the end of 2008, when it was still unclear how the world would pull out of the global financial crisis.

Looking back, Mr. Flaherty said the turning point was a meeting of the G7 finance ministers and central bankers in October 2008, where, after "a lot of finger-pointing by the Europeans at the Americans," they agreed to backstop the world's financial system.

"We were in a situation, where the markets might not open on Monday, where banks were failing in Germany, in the United Kingdom, in the United States," the finance minister recalled. "It was quite scary,"

In January's federal budget, Mr. Flaherty announced the government would pump $61-billion in public funds into the economy over two years, the biggest stimulus package in Canadian history.

Mr. Flaherty once again predicted that next year's budget will consist largely of the second year of the stimulus plan.

"Some of the stimulus items can be tweaked, certainly, but Canadians ought not to expect any major new spending programs," he said. "It may be kind of a boring budget, but boring is just fine in 2010."

The Conservatives have repeatedly promised not to raise taxes or cut transfers to the provinces or individuals to eliminate the deficit, which is projected to hit $56 billion this fiscal year. Instead, the government plans to rely on economic growth and possibly spending restraint to make up the shortfall.

In a recent editorial, however, two former senior Finance officials, C. Scott Clark and Peter Devries, wrote that "any credible budget will have to include tax increases."

Mr. Flaherty disagrees. "The easiest thing in the world to do is raise taxes. What it does mean is you don't have to have discipline in government spending. And Canadians know that there's wasted government spending -- some degree of it."

Stop the HST – Cost of buying, owning and selling a home to go up by 8%

Last week, the Government of Ontario formally launched its latest assault on homeowners, purchasers and sellers with the introduction of legislation to harmonize the provincial sales tax and goods and services tax.

Homebuyers and sellers will pay 8 per cent more on legal fees, appraisals, real estate commissions, home inspection fees, and moving costs, adding about $1,500 in new taxes to the average residential real estate transaction in Ontario.

For homeowners the HST will also add hundreds of dollars in additional tax on utility bills (gas, electricity and home heating fuel), on home renovation labour, the cost of lawn upkeep or landscaping and the cost of snow removal.

Please help Ontario REALTORS® fight this tax. In less than 30 seconds you can send an email to your MPP asking them to vote against sales tax harmonization legislation, by clicking here: http://bit.ly/stopthehst

Remember, if we don't raise the issue with the Ontario Government, we won't have any right to complain when we start paying hundreds (if not thousands) of dollars a year in additional tax.

P.S…..The following is a letter that was sent by a lawyer to his distribution list. I found it both enlightening and disturbing. I hope you will at least find it of interest.

As a concerned taxpayer I feel it is important to have you all understand what the new HST or 'blendppped tax' means to Ontarians. It amazes me that this announcement has slipped by without a ripple, and yet when I tell people about the impact to them they are all shocked.

The stated purpose is to blend the GST and the PST into one tax. This will cut down the paperwork burden for Ontario businesses and, in theory, lessen staff by merging both departments. This could be a noble attempt to cut costs. There is just one problem. Rather than just blending the products and services that now charge both taxes, the provincial government has decided that it will apply this new tax to almost ALL GOODS AND SERVICES that you do NOT pay PST on now!

You are about to become the victim of the largest tax hike in our history. How will this affect you? Let's start with just a few things that are to be charged the extra 8% and see if it will affect you or your family.

* photographer
* gasoline;
* diesel;
* propane;
* home heating fuel;
* home electricity;
* natural gas;
* home TV service;
* home internet service;
* cell phone charges;
* vitamins;
* dry-cleaning;
* meals under $4;
* new homes over $500,000;
* gym fees;
* home renovation labour;
* real Christmas trees.
* commercial bus fares;
* train fares;
* accountants fees';
* mechanics' fees;
* ballet lessons;
* rink rental fees;
* tailoring;
* magazine subscriptions;
* mutual fund fees;
* massage;
* chiropractic;
* home phone service;
* hair cuts;
* lawyers' fees;
* audiology;
* plane fares;
* taxi fares;
* grass cutting;
* snow removal;
* camping fees;
* firewood;

*Any service you now use for your home or business such as repairs, other professional services not now eligible, construction materials etc.

These are just a few. See this article referenced below about how the $1,000.00 they are offering will not even cover ½ of the increased cost to the average family. This tax hits Ontarians hard, but ESPECIALLY the low income ones! They will have an 8% increase in everyday life, and yet you will not see their benefits or salaries rise.

<http://www.digitaljournal.com/article/269917>
http://www.digitaljournal.com/article/269917

Actually almost everything currently without PST in your life except children's clothing, prescriptions, diapers, and feminine hygiene products will now cost you 8% more. Oh and here is a kicker. The fuel tax will slide with the increasing cost of that fuel. Mr. McGuinty and the finance minister are counting on taxpayers to do what they always do when a new tax is added. Nothing! It is very important that you start to research and
Discuss this with your friends and family. It is not too late to stop this if you are willing to do something as send an email to the premier asking him to either: a) stop the tax grab all together or b) do what was originally intended and blend the tax on the products that now have both taxes and not to extend the new tax to everything else.

If you just sit there remember you lose the right to complain about taxes ever again. Get UP and start telling everyone about this injustice and we can stop this today. Don't think your email won't count. Most MP's, if they get 10 emails, consider it a catastrophe!

PASS THIS ON - SHOW YOU OBJECT- IT TAKES ONE MINUTE

Taking Advantage of the Home Renovation Tax Credit

Just a reminder that (unless the Federal Government decides to extend the date) the renovation deadline for the Home Renovation Tax Credit is February 1, 2010. The credit will only be available for the 2009 tax year and applies to eligible expenditures of more than $1,000, but not more than $10,000, resulting in a maximum credit of $1,350 ($9,000 x 15%).

Eligible expenditures include:

• Renovating a kitchen, bathroom or basement
• New carpet or hardwood floors
• Building an addition, garage, deck, garden/storage shed, fence
• Re-shingling a roof
• A new furnace, woodstove, boiler, fireplace, water softener or water heater
• A new driveway or resurfacing a driveway
• Painting of interior or exterior of a house
•Window coverings directly attached to the window frame and whose removal would alter the nature of the dwelling
• Laying new sod
• Swimming Pools (Permanent – in ground and above ground)
• Fixtures – lights, fans, etc.
• Associated costs such as permits, professional services, equipment rentals and incidental expenses.

For more information, visit www.budget.gc.ca/2009/pamphlet-depliant/pamphlet-depliant3-eng.asp

Need Help Planting a Tree in Your Backyard?

Homeowners now have an easy, affordable way of having a tree planted in their backyard!

Planting trees around homes can help conserve energy, filter pollutants from the air, provide natural privacy and most importantly - increase property value!!

LEAF (Local Enhancement and Apprciation of Forests) is a local, non-profit organization that can help you plant a tree in your backyard. The program is subsidized for Toronto residents, so you pay only $100 to $190 per tree, which includes a 30 minute yard consultation with an arborist, a 6 to 8 foot tall tree and full planting service.

If you would like more info, visit www.leaftoronto.org/bytp or call 416-413-9244.

Recycle Your Old Fridge

Toronto Hydro is offering a FREE pick-up of your old refrigerator. All you have to do is call 1-877-797-9473 or visit www.everykilowattcounts.com and book an appointment. They now accept pick-up requests on weekends. I had an old energy-guzzler in the basement I wanted to get rid of and it was quick and easy! Plus they guarantee that the fridge will be dismantled in an environmentally-responsible way, ensuring that harmful chemicals don't find their way into landfills.

Important Health Message About Lead in Your Tap Water

If your houses was built before the mid-1950's, it may have lead pipes!

Lead has the most impact on the fetus, infants and children under six years old, and can affect the brain and nervous system. Lead can dissolve into your drinking water when the water stands for more than a few hours in the pipe (or "service line") that connects the underground watermain to your house.

Over the next several years, the City will be replacing the part of your service line that goes up to your property line. To permanently reduce lead in your drinking water, you can replace your part of the pipe, which goes from your property line up to the water meter.

Here are some tips to protect yourself until your water service line is replaced:

1. Flush the pipes if your water has not been used for more than a few hours. Do this by running the water until it is very cold and then letting it run for at least one minute.

2. When using tap water for cooking, drinking or making baby formula, begin with cold water.

3. Breastfeed your baby. The amount of lead in breast milk is much lower than in tap water.

4. Install an end-of-tap water filter certified by the National Sanitation Foundation. Look for "NSF-53 for lead removal/reduction" on the label.

5. Consider using bottle water for drinking or making baby formula, or consider using ready-to-feed formula.

For more info about water pipe replacement and rebates for water filters, visit Toronto Water at: www.toronto.ca/water/lead or call 311.

For more info on lead and health, visit Toronto Public Health at: www.toronto.ca/health/lead or call 416-338-7600

Great Time to Invest in Real Estate

Canada’s rate of inflation is at a historical low of .09%, not seen since 1953. This provides assurance of low interest rates going into a busy autumn market.

Please contact me if you're thinking of buying a home or condo. Now is a great time to invest in our wonderful city!

Toronto Land Transfer Tax Costs City’s Economy $170 million

For those who have been following the controversial developments of the implementation of the Toronto Land Transfer Tax, the CD Howe Institute covers the negative effect in the Toronto residential real estate market. This has been the first year of the Toronto Land Transfer Tax and there is now another public outcry for city officials to roll the Toronto Land Transfer Tax back.

It will be interesting to note how Toronto city officials will respond to our requests next year.

Bess
------------------------------------------------------------------------------------------------------
TORONTO, December 10, 2008 – Supported by a study on the impact of the Toronto Land Transfer Tax, recently authored by the C.D. Howe Institute and two University of Toronto Economics Professors, Greater Toronto REALTORS® are renewing calls for this tax to be rolled back. (Link for complete study provided for at the bopttom of this article).

“The housing sector is one of the most significant parts of Toronto’s economy,” said Maureen O’Neill, President of the Toronto Real Estate Board (TREB). “Unfortunately, the study prepared jointly by the C.D. Howe Institute and Economics Professors from the University of Toronto shows that the Toronto Land Transfer Tax has had a negative economic impact, which TREB estimates to be $170 million in 2008.”

The study found that the Toronto Land Transfer Tax, which costs average Toronto homebuyers approximately $4,000 in addition to a similar amount for the provincial Land Transfer Tax, has reduced sales of re-sale single-family homes (condominiums not included in study) by 16 per cent, which means approximately 3,500 lost re-sale transactions in the first year of the tax. If condominiums are included, REALTORS® estimate that the impact could be in excess of 5,000 lost re-sale transactions in the first year of the tax.

A separate recent study, conducted by Altus Clayton for the Canadian Real Estate Association,
determined that every re-sale housing transaction in Ontario generates approximately $33,425 in economic spin-off activity on things like renovations, furniture, and appliances. This means that losing 5,000 re-sale housing transactions because of the Toronto Land Transfer Tax costs the City’s economy approximately $170 million in consumer spending.

“When people buy a home, they usually spend thousands of dollars on related things like renovations, furniture, and appliances. Thousands of Toronto jobs depend on this spending,” said O’Neill. “Any City policy that impacts housing sales has a direct impact on the City’s economy and jobs.”

With the City currently preparing a recommended operating budget for 2009, TREB is calling on City Council to roll back the Toronto Land Transfer Tax.

“REALTORS® have been clear that we believe that the Toronto Land Transfer Tax is unfair and now a study by respected economists is validating that view. Not only is this tax unfair to home buyers and sellers, but also to the thousands of people whose jobs depend on the housing sector,” said O’Neill. “City Council can, and should, show leadership by rolling back the Toronto Land Transfer Tax.”

Source: The Toronto Real Estate Board

McGuinty calls property assessments 'unrealistic'

McGuinty calls property assessments 'unrealistic' but Ontario Premier won't direct municipal agency to take a fresh look at taxes in 2009

TORONTO — Municipal property assessments that were mailed to homes across Ontario this fall are “unrealistic” given the dramatic drops in the real estate market, Premier Dalton McGuinty admitted Wednesday.

Despite that, the province will not direct Ontario's Municipal Property Assessment Corporation to scrap the 2008 assessments, the first in several years, and do fresh ones in 2009.

Instead, the Premier called on municipal governments to recognize that the assessments are out of date when they prepare local property tax bills.

“You would hope that municipal councils would act reasonably and responsibly given the circumstances and recognize that that perhaps was an unrealistic assessment,” Mr. McGuinty told reporters at his year-end news conference.

A homeowners group and the opposition parties quickly blasted McGuinty's comments as out of line.

“There's nothing municipalities can do; if it's unrealistic it's unrealistic,” said Bob Topp of the Coalition After Property Tax Reform.

“Some people are going to have huge increases way out of line with what their properties are now worth. Municipalities are powerless to do anything about that.”

The opposition parties said the Liberal government created the problem with assessments by freezing them for several years prior to the 2007 Ontario election — to avoid a backlash from homeowners angry about big increases — and then scrapping annual assessments in favour of a four-year cycle.

“People are facing high taxes due to skyrocketing assessments of their homes at the same time that the value of their homes is plummeting,” Progressive Conservative finance critic Tim Hudak said.

“The problem with Dalton McGuinty's new assessment scheme is that it locks people in at the height of the hot housing market with no sign of relief until 2012.”

Mr. McGuinty's suggestion that municipalities should keep the unrealistic assessments in mind instead of scrapping the 2008 assessments was “beyond ridiculous,” the New Democrats charged.

“The whole situation here is artificial,” NDP Leader Howard Hampton said.

“The McGuinty government, in the run-up to an election, said we're not going to deal with property taxes until after the election. Now people are hit with what in effect was a three-year combination all at once that doesn't reflect current economic circumstances.”

The Tories want Ontario to cap assessments at a five per cent increase while the New Democrats want assessments frozen until a home is sold, saying only that would give a true value of a property.

Mr. McGuinty dismissed suggestions about capping rates, and said the Ontario government introduced a four-year phase-in for the new assessments to help homeowners adjust to any increases.

“Assessments are one thing and tax rates are another, and it's the combination of the two that determines your tax increase as a property taxpayer,” he said.

“What we've done ... is require that these be phased in over a four-year time frame to mitigate the impact of a dramatic increase.”

British Columbia Premier Gold Campbell announced last month that he would freeze property assessments at 2007 levels to help people cope with what he called the turbulence in property values, and put off new assessments until late next year.

Source: KEITH LESLIE, The Canadian Press

Recession to persist well into 2009 but bank governor warns of over-reaction

TORONTO - Canada is in a recession that will persist well into next year but will slowly start to emerge from the gloom toward the end of 2009 and pick up economic strength in 2010, Bank of Canada governor Mark Carney said Wednesday.

Still, no one should underestimate the severity of the economic crisis, Carney said, although he refused to speculate on whether the country is headed for a depression - usually defined as a sustained period of economic shrinkage of about 10 per cent or more.

"Next year will be a trying one for many Canadians," Carney said in a luncheon speech to a Bay Street business audience.

"Issues of financial stability that were once the obsession of a pessimistic few are now the daily concern of many."

Carney warned that significant risks remain, including possible over-reaction to the crisis.

If consumers stop spending in light of the downturn - an otherwise rational course of action - the slump will worsen, he said.

"Fear of a recession feeds a recession," he told the Women in Capital Markets gathering.

Similarly, he said, market pressure on banks to build up capital and restrict lending makes it harder for businesses to borrow, exacerbating the slowdown and increasing bank losses.

Unlike in other countries, Carney said credit in Canada is still growing, albeit slowly, and businesses should not be afraid of asking banks for money.

"This is a time when good investments are made; this is a time when good loans are made."

One of five risks the central bank has identified is that the slump could depress incomes to such an extent that many households have difficulty servicing their debts.

That in turn could trigger an increase in defaults, causing significant losses among Canada's banks.

Household credit growth continues to grow at a "surprisingly" fast pace that is of some concern, he said, adding household debt relative to income has risen to record levels.

But the central banker said Canadians are coping thanks to low interest rates that are keeping their debt load manageable.

Carney called it "premature" to talk about following the lead of the U.S. Federal Reserve, which has lowered its key interest rate to zero per cent.

The Bank of Canada has sliced its trendsetting interest rate by two-thirds in the past year from 4.5 per cent to 1.5 per cent.

Carney did say the failure of Canada's commercial banks to pass through all the rate cuts is a "complication" for his monetary policy.

He said the situation was not "entirely surprising" given the banks' own higher borrowing costs.

Carney also made several proposals for avoiding future credit crunches, including that the International Monetary Fund become the "early-warning system" of problems in financial markets.

He urged financial institutions to build up capital in good times and draw on it in bad - the opposite of what is now occurring as bankers become more risk-averse in a shrinking economy.

"In this way, capital requirements would moderate the ups and downs of the credit cycle - the reverse of what currently happens - reducing the risk of a future crisis."

Although the crisis is relatively muted in Canada, Carney noted Canadian policymakers have been forced to take bold action.

The central bank has injected $36 billion of additional liquidity into money markets, while the federal government has bought $75 billion in mortgages, in an effort to keep banks lending to business and individuals.

However, he refused to say what further fiscal measures the federal government should take to stimulate the economy, saying only that Finance Minister Jim Flaherty was working on his Jan. 27 budget.

Carney said the measures will eventually kick in but the recovery won't be quick.
"It will take time for confidence to return and for capital to flow again."

By Colin Perkel, The Canadian Press

Daylight Savings Time

Don't forget to turn your clocks back 1 hour on Sunday November 2nd at 2am.

Bess

Happy Halloween

Happy Halloween! Hope you have a scary day!! (in a good way of course). Below you'll find some interesting information about the wonderful tradition of Halloween. Enjoy!

Bess
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Halloween, or Hallowe'en, is a holiday celebrated on the night of October 31. Traditional activities include trick-or-treating, Halloween festivals, bonfires, costume parties, visiting "haunted houses" and viewing horror films. Halloween originated from the Pagan festival Samhain, celebrated among the Celts of Ireland and Great Britain. Irish and Scottish immigrants carried versions of the tradition to North America in the nineteenth century. Other western countries embraced the holiday in the late twentieth century. Halloween is now celebrated in several parts of the western world, most commonly in Ireland, the United States, Canada, Puerto Rico, and the United Kingdom.

The term Halloween (and its alternative rendering Hallowe'en) is shortened from All-hallow-even, as it is the eve of "All Hallows' Day", also which is now known as All Saints' Day. It was a day of religious festivities in various northern European Pagan traditions, until Popes Gregory III and Gregory IV moved the old Christian feast of All Saints' Day from May 13 to November 1. In the ninth century, the Church measured the day as starting at sunset, in accordance with the Florentine calendar. Although All Saints' Day is now considered to occur one day after Halloween, the two holidays were, at that time, celebrated on the same day. Liturgically, the Church traditionally celebrated that day as the Vigil of All Saints, and, until 1970, a day of fasting as well. Like other vigils, it was celebrated on the previous day if it fell on a Sunday, although secular celebrations of the holiday remained on the 31st. The Vigil was suppressed in 1955, but was later restored in the post-Vatican II calendar.

The modern holiday of Halloween has its origins in the ancient Gaelic festival known as Samhain (pronounced /ˈsˠaunʲ/ from the Old Irish samain). The Festival of Samhain is a celebration of the end of the harvest season in Gaelic culture, and is erroneously regarded as 'The Celtic New Year'. Traditionally, the festival was a time used by the ancient pagans to take stock of supplies and slaughter livestock for winter stores. The Ancient Gaels believed that on October 31, the boundaries between the worlds of the living and the dead overlapped and the deceased would come back to life and cause havoc such as sickness or damaged crops. The festivals would frequently involve bonfires, where the bones of slaughtered livestock were thrown. Costumes and masks were also worn at the festivals in an attempt to mimic the evil spirits or placate them. When the Romans occupied Celtic territory, several Roman traditions were also incorporated into the festivals. Feralia, a day celebrated in late October by the Romans for the passing of the dead as well as a festival which celebrated the Roman Goddess Pomona, the goddess of fruit were incorporated into the celebrations. The symbol of Pomona was an apple, which is a proposed origin for the tradition of bobbing for apples on Halloween.

In many towns and cities, trick-or-treaters are welcomed by lit porch lights and jack-o'-lanterns. In some large and/or crimeridden areas, however, trick-or-treating is discouraged, or refocused to staged trick-or-treating events within nearby shopping malls, in order to prevent potential acts of violence against trick-or-treaters. Even where crime is not an issue, many American towns have designated specific hours for trick-or-treating, e.g., 5-7 pm or 5-8 pm, to discourage late-night trick-or-treating.

Those living in the country may hold Halloween parties, often with bonfires, with the celebrants passing between them. The parties usually involve traditional games (like snipe hunting, bobbing for apples, or searching for candy in a similar manner to Easter egg hunting), haunted hayrides (often accompanied by scary stories, and costumed people hiding in the dark to jump out and scare the riders), and treats (usually a bag of candy and/or homemade treats). Scary movies may also be viewed. Normally, the children are picked up by their parents at predetermined times. However, it is not uncommon for such parties to include sleepovers.

Trick-or-treating may often end by early evening, but the nightlife thrives in many urban areas. Halloween costume parties provide an opportunity for adults to gather and socialize. Urban bars are frequented by people wearing Halloween masks and risqué costumes. Many bars and restaurants hold costume contests to attract customers to their establishments. Haunted houses are also popular in some areas.

Source: http://www.mystclair.com/

International Home Show Info

Even though many of you are celebrating Thanksgiving this weekend, you may find some time to visit the largest Home Show in Canada. If you are planning on updating or renovating your home in the near future, there will be 250,000 sq.ft. of home improvement products and services along with many ECOnomical home shopping ideas too!

Toronto International Centre
6900 Airport Rd. – North of the Airport at Derry (FREE Parking)

Friday October 10 from 11:00 a.m. to 9:00 p.m.
Saturday October 11 from 10:00 a.m. to 9:00 p.m.
Sunday October 12 from 10:00 a.m. to 6:00 p.m.
Monday October 13 from 10:00 a.m. to 6:00 p.m.

Tickets:

$14.00 for Adults
$10.00 for Seniors and Children Ages 9-18
FREE for Children 8 and under

Website: http://www.home-show.net/homeshow/index.htm

Ontario Residential Property Taxpayers Will See Average Assessment Increase of Approximately 5% in 2009

Assessment value of properties will be increasing but this doesn't necessarily mean that your property taxes will too!

Read below to find out how this may impact your real estate!

Bess

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Assessment Ontario

September 17, 2008

Market increases in values since 2005 will be phased in over the next four years with new provincial policy as mailing of Property Assessment Notices for Ontario’s nearly 4.7 million properties begins.

Pickering, Ontario, September 17, 2008 – Ontario property taxpayers will see an average assessment increase of five per cent in 2009 with a four-year phase-in introduced by the Provincial Government to add stability and predictability to the assessment process.

“Residential property values have increased by an average of approximately 20 per cent across Ontario since 2005, when the last assessment update was done. Because of the four-year phase-in, property taxpayers will see an average assessment increase of five per cent next year,” Carl Isenburg, President and Chief Administrative Officer of the Municipal Property Assessment Corporation (MPAC), said.

An increase in assessment does not necessarily mean an increase in property taxes. If the assessed value of a home has increased by the same percentage as the average in the municipality, there might be no increase in the property taxes paid by a property taxpayer.

The phase-in program does not apply to decreases in assessed value. The full amount of a decrease will be applied during the 2009 tax year.

“Our values are based on actual sales and trends in real estate markets across the province,” Isenburg said. Municipalities establish tax rates that are applied to assessed values to pay for local services and the Provincial Government sets rates for the education portion of the tax.

Property Assessment Notices will begin arriving in the homes of property taxpayers this week.

“We have made a number of changes to improve customer service and to provide property taxpayers with more information so they can decide if their assessment is accurate,” Isenburg said. The changes include:

1) Redesigning the Property Assessment Notice to make it easier to understand and provide more information, including the assessed value of a property for each of the next four tax years; and
2) Online videos explaining how MPAC assesses property and how to resolve assessment concerns on the MPAC website at http://www.mpac.ca/.

“MPAC’s role is to assess property accurately. If we don’t have the right information about a property or if a property taxpayer feels that his or her property would not have sold for its assessed value as of January 1, 2008, we want them to call us. If a mistake has been made, we’ll fix it,” Isenburg said.

Hours will be extended at each of MPAC’s 33 local offices across the province during the Notice mailing period this fall, as was done in 2005. Property taxpayers can also call MPAC’s Customer Contact Centre, which can be reached toll-free at 1 866 296-MPAC (6722).

“We have almost 500 customer service representatives across the province who will be available to answer questions or deal with concerns,” Isenburg said, adding:

“We strive for accuracy, but when you assess nearly 4.7 million properties, errors can be made. If any property taxpayer has a question or concern, we want them to call us or visit one of our local offices. We are committed to working with property taxpayers to make sure that their assessment is correct.”

For more information, please call:
Michael Jacoby, Director, Communications,
Municipal Property Assessment Corporation,
(905) 837-4209

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THE NEW PROPERTY ASSESSMENT NOTICE BACKGROUND INFORMATION

The Municipal Property Assessment Corporation (MPAC) has improved the 2008 Property Assessment Notice to make it easier to read and understand. This year’s Property Assessment Notice will include:

1) The assessed value of the property for each of the next four tax years;
2) The percentage by which the property has increased or decreased in value since the last assessment update in 2005 and the average percentage by which properties across the municipality have changed in value. If the assessed value of the property has changed by the same or a lower percentage than values in the municipality as a whole, property taxes may not increase;
3) A history of past adjustments, if any, made by MPAC through the Request for Reconsideration process or the Assessment Review Board to the assessed value of the property and whether these are reflected in the current assessment;
4) Details about the property including lot size, square footage, and year of construction used by MPAC to help determine the assessed value of a property;
5) A User ID and Password that can be used to access AboutMyProperty™;
6) The address of the nearest MPAC local office where questions can be answered and concerns addressed in person; and
7) The toll-free phone number for MPAC’s Customer Contact Centre.

Property Assessment Notices will be mailed for Ontario’s nearly 4.7 million properties in 2008.

Mailed with the Property Assessment Notice will be:

1) A brochure explaining how property owners can determine if their assessment is accurate and, if they feel it is not, what options are available to have it corrected; and
2) A brochure describing the new Ontario Senior Homeowners’ Property Tax Grant to help eligible senior homeowners with low and moderate incomes pay their property taxes.

An interactive Property Assessment Notice with details on each section has been posted on the MPAC website at www.mpac.ca

For more information, please call:
Michael Jacoby, Director, Communications,
Municipal Property Assessment Corporation,
(905) 837-4209