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Toronto Land Transfer Tax — What’s New and What’s Coming?

Provincial (Ontario) Land Transfer Tax Changes – 2017

2016 was a big year for changes in the Canadian Real Estate Market. On the heels of the announcement in October regarding changes in the mortgage underwriting rules for first time home buyers (ultimately reducing the buying power of first-time home buyers in Canada, read more here), the province announced changes to provincial land transfer tax which are aimed at helping increase affordability for first time home buyers, effective January 1, 2017.

Here are the changes:

Ultimately these changes are expected to have negative implications on transactions over $2 Million which, in the City of Toronto, represents a large part of the real estate market for centrally-located detached homes.

But Toronto is unique in that, unlike all other municipalities in Ontario, it has a municipal land transfer tax in addition to the provincial land transfer tax.

City of Toronto Municipal Land Transfer Tax – Proposed Changes

The City of Toronto is currently exploring raising the Municipal Land Transfer Tax in order to meet 2017 budget objectives. The effect would be an additional 0.5 per cent of tax on all buyers.

This could mean a seven per cent increase of $750 on top of the $11,000 for an average priced home purchased by a repeat buyer in Toronto.

Tim Hudak, CEO-designate of the Ontario Real Estate Association (OREA) said that if the city increases the municipal land transfer tax, it would effectively be “clawing back” the additional rebate offered by the province. Hudak says, “Unfortunately, Toronto is proposing to swipe up to 25 per cent of the provincial savings out of the pockets of young couples and put it into city coffers instead.”

Toronto Real Estate Board has launched a website to combat the City on the increase of land transfer tax.

Toronto City Council will finalize its budget in February 2017.

Would you like to be kept informed on the latest in Toronto Real Estate? Contact a member of our team to be kept in the loop or sign up for our monthly real estate updates today.

2016 Change to Mortgage Qualifying Rules for First-Time Home Buyers — Explained

You might remember an uproar regarding real estate in October 2016, but what was that all about?

Without notice or preparation, the Canadian government announced on October 3rd, 2016 several major changes to mortgage rules aimed at curbing high demand in two of the country’s fastest growing markets — Toronto and Vancouver.

Bank of Canada implemented what they call a “stress test” for first-time buyers, forcing them to qualify for their mortgages at the Bank of Canada posted rate or 4.64% rather than the actual mortgage rates, reducing buying power for first-time home buyers across the board.

Why?

This was a very clear message from the Bank of Canada that interest rates would soon start rising, and true to form, they’ve already started. Since first-time home buyers often stretch their budgets and take on more than they can afford (and many lenders don’t prevent this from happening) this is the government’s way of protecting our housing market from a potential crash as a result of rising interest rates.

What’s the actual impact? (view the CBC article here)

Although this may temporarily slow the market in some areas, this move is expected to have positive ripple effects on the economy and is a much needed shifting of the winds for Canada.

In 2016, a mere 33 percent of individuals looking to purchase a home were first-time home buyers and in 2017, stats are showing over 50 percent of people with an eye for the home buying market will be first time purchasers. Even more astounding, over 60 percent of those buyers are under the age of 35. 2017 will most likely be the year that the Millennials begin their real estate takeover and the market will never be the same.

Looking for your first home or know someone who is? Contact a member of our team today to learn how we can help you with your real estate transaction and mortgage financing needs.

2017 — Here We Come

As we mark the end of our business year in 2016, we’d like to wish you all the best in 2017 and thank you for your support in 2016 which was a banner year for Distinctive Advisors.

With the continued market changes in 2017, the business couldn’t be entering our Sophomore year at a better time. For some, 2017 will be a trying year filled with changes in the market that will require changes in information given to clients, the listing process as a whole, property marketing and the buying power of our first-time buyer’s segment of the market. But the Distinctive Advisors team has a roster of buyers looking for strong investments in the year ahead, so have no fear.

Our Distinctive Difference is to provide our clients with smart information to make the best decisions for their families and financial futures. Our team is excited to adapt to the expected changes in the market and continue to serve the real estate ownership and investment priorities of our clients in the year ahead.

We’re proud to highlight a selection of our client’s real estate successes from the past year:

44 Beardmore Crescent

44BeardmoreSOLD

86 Atherton Avenue

86AthertonSOLD

18 Yonge — Suite 716

18Yonge-716SOLD

205 Wynford Drive — Suite 2407

205Wynford-2407SOLD

169 Goulding

169GouldingSOLD

2246 Dufferin St

2246DufferinSOLD

18 Humbervale Blvd

18HumbervaleLEASED

12 Sundance

12SundanceSOLD

60 Heintzman — Suite 927

60Heintzman-927LEASED

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Toronto Real Estate Update – April 2016

At the beginning of 2016, The Toronto Real Estate Board (“TREB”) outlook for the year pointed to a strong possibility of a second consecutive record year for home sales. This outlook was based, in part, on upbeat consumer survey results pointing to robust home buying intentions.

With Toronto recently having been named the best city to live in on a worldwide scale, Toronto is attracting many new residents from around the world, further driving real estate sale volumes and pricing.

The positive annual growth in sales was not mirrored on the listings front. The number of new listings entered into TREB’s MLS® System during March and the first quarter were down compared to the same period in 2015.

The supply of listings continues to aggravate many would-be home buyers. Toronto could have experienced even stronger sales growth if it had not been constrained by supply of listings, especially in the low-rise market segments. Jason Mercer, TREB’s Director of Market Analysis reported recently that the resulting strong competition between buyers has underpinned the double-digit rates of price growth experienced so far this year.

What’s going on in the Toronto Condo Market?

With continued price increases in the single-family Toronto real estate housing market, homes are unaffordable for many Toronto families. But many young professionals with smaller families don’t have a surplus of time to commute from the GTA to the downtown employment hub.  This reality is pressuring young families to live and work in downtown Toronto and to consider condo living as a viable option. More condo developers are now creating 2 + Den and 3 bedroom condos as part of their new developments to cater to this market.

What’s going on in the Toronto Housing Market?

With our prevailing and forecasted low Canadian Dollar and mortgage interest rates, coupled with the increased popularity of Toronto on a worldwide scale, the Toronto Housing Market continues to be red hot. Foreign investment is pouring in from Western countries.  As compared to other popular cities around the world, Toronto is still an affordable option for foreign investors and Canada is a safe place for their funds.

What are people looking for?

Location is a big driver for many buyers looking for new property. Homes that are in great, central neighbourhoods with big lots will command top dollar in the coming year, especially ones that have been upgraded to include modern finishes and contain live/work space such as a home office. Homes that have been upgraded well are commanding multiple offers in many areas in central Toronto.

Toronto Housing Market Snapshot

In summary, TREB announced a record-breaking first quarter for home sales in 2016 in the City of Toronto, with home sales up 15.8 per cent from Q1 2015.

In the month of March:

  • Sales were up 16.2 per cent over March 2015
  • Prices were up 12.1 per cent over March 2015
  • Less new listings were available than March 2015

Demand was not an issue, with many eager buyers looking for properties. Even though home sales were strong, they were constricted by limited supply.

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