A good start to 2025!

If you are selling a BC property after January 1, 2025 and have owned the property for less than 2 years (730 days), then you may be required to pay the new BC Home Flipping Tax . Completely separate from the federal property flipping rule , this tax is collected by the BC Provincial Government and applies to all sellers of taxable BC property, no matter where the seller lives. You must file a BC home flipping tax return within 90 days of the sale , if either of the following applies: Sold your property within 90 days of purchasing it and are not eligible for any exemptions  Your exemption applies only after you file a return.

Think your BC Assessment value is out of whack? A few years ago, I did, and here is how I got it reduced... Disclaimer #1: Bringing more scrutiny to your assessed value may INCREASE your value as well. Maybe you don't want them looking that much closer at your property in comparison to your neighbours. In my case, I felt I had enough of a case to make it worthwhile having it reviewed, but you do take on that risk. Disclaimer #2: I am in support of paying our fair share of taxes. I also very much acknowledge it's a luxury to even own a home to pay taxes on, so please don't construe this as whining. Also, these are people doing their jobs, so being cordial and empathetic is always helpful, and is just the right thing to do. Everyone loves being told their house is worth more than they expected, except when it comes to assessment/tax time (or sometimes when dividing assets in a divorce, but that's for another post). When our BC Assessment came out a number of years ago, we were shocked to see a significant increase over the previous year, especially when it was a high value that didn't seem to make sense with comparable sales in our area. I did some digging through their website on what you should do to prepare, and put together a guide to make the process easier: 1) Collect some data to support your perspective - There was a good chance I could be wrong, so I better have facts to support my thought process. This could be: - Intangible information, such as a neighbouring property that was listed but didn't sell, any details about your property that doesn't show up on the current assessment, etc. - Examples of inequity, such as comparable properties or sales that highlight an unusual discrepancy with your own. - Market evidence, such as finding sales that have similar land and building size, and comparing them to your own. Consider using a per square foot comparison for a common benchmark and registering an account with www.BCAssessment.ca to make it easier to compare your assessment to others. 2) Have a conversation with the appraiser - Find out who the appraiser responsible for your area is and speak to them directly. They have the autonomy to make a decision about your situation and could help you out. This eliminates spinning your wheels too much in the month of January and potentially satisfies your situation without having to file a formal complaint. Remember all formal appeals have to be filed by Jan 31st. You can find out your jurisdiction on the Assessments Map 3) Be Compassionate - Nobody likes being complained to, and I'm sure the appraisers at BC Assessment spend their entire January being told by the public that they didn't do their job well. I would hate that. You would hate that. 4) Be Understanding - Try to understand their rationale and their process. It's not an exact science, and much of it is done with a sample of market appraisals, from which larger regional determinations are extrapolated. 5) Provide the facts - Provide all the facts and information you gathered non-confrontationally and as clearly as possible. Here is what I wrote to the BC Assessment Appraiser responsible for my area: "Good morning *****, I wanted to connect with you directly (just left you a quick voicemail), as the assessed value on our home (**** Rd) has jumped this year substantially, and it would be great to review it with you first, prior to getting into any sort of formal appeal (if there is even a case to be made). I'm sure this part of the job isn't the most fun, so I can empathize with the challenge of dealing with complaints about this stuff. January must be busy for you with stuff like this, but if you could please let me know if we could set up a quick phone call just to go over the information I've gathered so far (**comparable sale address**, **comparable sale address** my next door neighbour trying to sell for $*** and not getting it), that would be much appreciated. I look forward to speaking with you, if you want to give me a call at 250-591-9959, that would be lovely." In my situation, the appraiser called me back and we discussed the properties I had identified in the email, and some information regarding my property that wasn't being factored in on the most recent assessment. During our discussion, the appraiser was able to update the information and significantly reduce the increased assessment value initially given. They said if I was comfortable with that result, they could put that in the system and send me an updated assessment in the mail. Or, if I felt there should be a more significant reduction, that I was entitled to file a formal complaint. For me, this result was acceptable and what I hoped for. It brought the assessed value more in line with what I figured the house and property were worth, and so I decided there was no need to pursue anything further. If you found any of this helpful, pass it along to friends or family that would like a glimpse inside the machine! Have you ever had your assessment changed, filed a formal complaint, or gone before the Property Assessment Review Panel (PARP)? Do you have questions or concerns about your BC Assessment? I would love to discuss this topic, so please feel free to call or email us!

Holiday miracle, policy rate reduced again

Throughout this past year, we saw a number of new changes announced in the mortgage industry and housing. Here are a few highlights: April 1st: Changes to Property Transfer Tax Exemptions The Province of BC announced increased sliding scales for the property transfer tax exemptions, both for First Time Home Buyers and for new construction. Read more about this on our website HERE and from the province HERE . April 16th: Increased RRSP Withdrawal Limit under the Home Buyers’ Plan Previously $35,000, for those eligible, the withdrawal limit under the Home Buyers’ Plan was increased to $60,000. Read more about this announcement HERE and the Home Buyers’ Plan HERE . August 1st: 30 year Amortization for First Time Home Buyers Purchasing New Construction In June 2024, the federal government announced that First Time Home Buyers’ purchasing a newly constructed home would have access to a 30 year amortization with less than 20% down payment. Read more about this announcement HERE . Availability of a 30 year amortization with less than 20% down payment has been since further expanded (see below). November 21st: No Stress Test for Uninsured Mortgage Transfers Following the February 2024 announcement with regards to no stress test/mortgage qualifying rate (MQR) requirement for insured mortgage transfers, the opportunity has now been applied to uninsured mortgages. This allows for an uninsured mortgage to be transferred to a new lender without having to qualify at the stress test (rate +2%). The criteria for any mortgage transfer is: mortgage amount increase is limited to $3,000, the original registered amortization minus elapsed time applies, only for standalone mortgages, not eligible for stand alone HELOCs. December 15th: Insured Mortgage Cap Increased to $1.5M In a surprising move, the federal government announced the insured mortgage cap would be increasing for the first time since 2012 to $1.5M. This means, any home buyer (not just a first time home buyer) can purchase a home for $1.5M with as little as $125,000 for down payment. Previously, a purchase price of $1.5M would have required a down payment of at least $300,000. The goal of this change is to get more Canadians into homes in their local communities without having to continue to save for much larger down payments or relocate to lower priced markets. Read more on this HERE . December 15th: 30 Year Amortization for all FTHBs AND all buyers of New Construction In the same press release, the federal government announced the eligibility for 30 year amortization would be extended to both first time home buyers AND all buyers of new construction. While 30 year amortizations do increase the overall interest cost during the lifetime of a loan, it does help bring down monthly payments to help with day to day cashflow and qualification. Read more on this HERE .

Bank of Canada continues rate reduction after inflation target reached

To address the housing demand and increase housing affordability, the federal government announced on October 8th, 2024 new initiatives to utilize the many vacant and underused properties in Canada, including federal government owned land. This is another step (outlined in the 2024 Budget ) towards their goal of building 4 million homes by 2031. MORTGAGE REFINANCING FOR SECONDARY SUITES - Effective January 15, 2025 Ability to refinance an insured mortgage for the purpose of secondary suites (up to 3 additional units on a primary residence or second home) Access to financing of up to 90% of the home value (inclusive of secondary suite value) Ability to refinance with a 30 year amortization Insured home price cap of $2 million Constructed suites must be legal, see Nanaimo guidelines (many municipalities have similar guidelines) See more parameters HERE *Many details and logistics need to be sorted and we will continue to update as our lenders, insurers and governing bodies disclose more information CONSULTATION ON VACANT LAND TAX The federal government is seeking input from stakeholders and provincial / territorial / municipal governing bodies on taxing vacant land. A vacant land tax is to encourage landowners to develop housing or list the property. View more information or submit feedback HERE UNLOCKING FEDERAL PROPERTIES FOR HOUSING 14 additional federal properties have been added to the Canada Public Land Bank for a total of 70 federal properties available to developers. The government aims to convert unused or underused federal properties into 250,000 new homes. FULL PRESS RELEASE HERE OAC, E&O

October 10, 2024 Update: Expansion of the insured mortgage threshold for FTHBs and qualification for a 30 year amortization have been dominating the headlines (at least in our world) over the last few weeks. There have been some recent updates that have come out with regards to these policy changes that we would like to clarify. Remember, these new rules take effect December 15th, 2024 . The new insured mortgage price cap ($1.5 million) applies to two situations: 1. FIRST TIME HOME BUYER A first time home buyer can be defined as: The borrower has never purchased a home before; In the last 4 years, the borrower has not occupied a home as a principal place of residence that either they themselves or their current spouse or common-law partner owned; or, The borrower recently experienced the breakdown of a marriage or common-law partnership. (the regulations will follow the approach that the Canada Revenue Agency has taken with respect to the Home Buyers’ Plan) 2. NON FIRST TIME HOME BUYER PURCHASING NEW CONSTRUCTION To be considered a new construction home: The new home must not have been previously occupied for residential purposes. (this requirement is not intended to exclude newly constructed condominiums where there has been an interim occupancy period) INSURED MORTGAGE MINIMUM DOWN PAYMENT CALCULATION The minimum down payment required for a purchase below $1,500,000 is as follows: 5% on the first $500k 10% on the balance remaining Calculation Example: A client wants to purchase a $1,200,000 house. The minimum down payment would be calculated as: $500,000 x 5% = $25,000 (5% on the first $500k) $1,200,000 - $500,000 = $700,000 (remaining balance) $700,000 x 10% = $70,000 (10% on the balance remaining) $95,000 = Minimum down payment for a purchase price of $1,200,000 Let's assume the client has a minimum down payment of $95,000 for a purchase of $1,200,000. $1,200,000 Purchase Price - $95,000 Minimum Down Payment + $44,200 CMHC Insurance $1,149,200 Total Mortgage Amount At current 5yr fixed insured rates of 4.39%, amortized over 30 years, this would mean monthly payments of $5,721.11/m. Not inclusive of property taxes, hydro, insurance, or utilities. For more context, in order to qualify for a mortgage of $1,149,200, assuming minimal debts, clients would need to have a household income of approximately $253,000. Run your own scenarios with our Purchase Calculator ! It will even calculate your CMHC insurance automatically. Make sure you tick the box that says “Enable December 15th Rules” for accurate results. ____________________________________________________________________________________________________________________________

Bank of Canada reduces policy rate, again