The B.C. government is closing a loophole in an effort to avoid tax evasion in real estate.

It says buyers, including real estate speculators, will have to disclose more complete information when they purchase a property through a corporation or trust.

Starting Sept. 17, the new property transfer tax will require people to report additional information, including their name, citizenship and social insurance number, if they purchase through a corporation or trust.

Finance Minister Carole James says the government wants to prevent people from skirting tax laws and hiding property ownership behind numbered companies and trusts.

The new reporting requirements will apply to all types of property, with exemptions for charitable trusts and certain corporations, such as hospitals and schools.

The changes are part of a series of steps the government is taking to address tax fraud in the real estate market that includes tracking pre-sale condos, sharing homeowner grant information with the federal government and boosting the ability of auditors to act on tax evasion.

“These changes give authorities another tool to make sure people are paying the taxes they owe,” James says in a news release.

Article found here.

Tibor Bogdan & Associates
*Personal Real Estate Corporation
Sutton Showplace Realty
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Canada Mortgage and Housing Corp. is making changes intended to make it easier for the self-employed to qualify for a mortgage.

The national housing agency says it’s giving lenders more guidance and flexibility to help self-employed borrowers.

Self-employed Canadians may have a harder time qualifying for a mortgage as their incomes may vary or be less predictable.

CMHC is providing examples of factors that can be used to support the lender’s decision to lend to borrowers who have been operating their business for less than 24 months, or in the same line of work for less than 24 months.

It is also providing a broader range of documentation options to increase flexibility for satisfying income and employment requirements.

The changes, which apply to both transactional and portfolio insurance, will take effect October 1st.

Tibor Bogdan & Associates
*Personal Real Estate Corporation
Sutton Showplace Realty
cell: 604-855-2521
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As widely expected, the Bank of Canada (BoC) raise its key interest rate on Wednesday. It was the fourth hike for Canada’s central bank since July of last year, a move that brought rates to 1.5 per cent, up from just 0.5 per cent 12 months ago.

Most Canadians probably know the drill by now. As the BoC rate goes up, so does the interest on floating-rate loans, like variable-rate loans and lines of credit. And usually, a couple of days after the BoC’s announcement, the banks announce that they’re raising the interest on new fixed-rate mortgages as well.

It may be time to choose variable again Variable-rate mortgages are once again looking pretty attractive, according to mortgage brokers.

To read the full article click here

Tibor Bogdan & Associates
*Personal Real Estate Corporation
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Vancouver ranks 1st and Abbotsford ranks 4th among cities where home buyers shell out the most in home-purchase tax (land transfer tax on a home purchase – known in B.C. as property transfer tax – in a new ranking by real estate website Zoocasa.)

The website ranked all the major Canadian cities in terms of how much tax both a first-time buyer and a repeat buyer would pay on the average-priced home for that city. During the month of May in Abbotsford, the tax on an averaged priced home costing $538,999 was $8,780, placing it fourth on the list for both the first-time and repeat buyer rankings.

Vancouver was by far the highest on the first-time buyer list, with both first-time and repeat buyers paying $20,076 in tax on the purchase of an average-priced home costing $1,103,803.

The cost of LTT on top of purchasing a home can be onerous, especially for first-time buyers and especially in high-priced markets, as Zoocasa’s managing editor Penelope Graham wrote in the report. “Land transfer tax is a cost that must be paid in cash upon closing and it cannot be mortgaged. This results in requiring buyers in the most expensive and heavily taxed housing markets to save for years longer to have that cash in hand, compared to more affordable markets with a moderate fee structure.”

*Article sourced from: Glacier Media Real Estate

Tibor Bogdan & Associates
*Personal Real Estate Corporation
Sutton Showplace Realty
cell: 604-855-2521
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A Burnaby pensioner is suing a construction company that has put a claim on half of the home she lives in and that represents her lifetime savings.

In October, 80-year-old Tina Gully was upset to learn that Ledcor Construction Ltd. had gotten a “certificate of judgment” in court for the half-interest in her apartment suite she had given to her son, who owed the company $800,000 arising from a business deal.

According to court documents, in May 2015 she had added her son, Steven Gully, as a joint tenant on the title of the high-rise suite on Kathleen Avenue near Metrotown.

She says that the property transfer was done without her son’s knowledge, agreement or consent and was solely for the purpose of estate planning given her age.

Gully, who earns $20,000 a year after taxes, says she intends to give her estate to her two grandchildren and didn’t add them to the title because they are still very young.

Her son did not know of the transfer until after the certificate of judgment had been registered on the property, she claims.

The grandmother of two says she asked Ledcor to remove the certificate, informing the company that Steven holds the property in a “resulting trust” for her, but that the company has refused to do so.

Initially she named her son as the sole defendant, with the son not responding to the lawsuit, and later added Ledcor in an amended notice of civil claim filed in B.C. Supreme Court seeking to have the certificate removed from the title.

“Since the certificate, it has always been my fear that I will not be able to support myself,” Tina Gully says in an affidavit filed in April. “It has become a daily stress and concern for me. I sometimes cannot sleep at night because of this ordeal.

“I cannot understand why my lifetime saving has been claimed by Ledcor when Ledcor was doing business with Steven, and I had nothing to do with that.”

She says she has health issues and is not sure that if she sells the apartment and Ledcor gets half of the proceeds of sale, she will be able to afford moving into a senior’s care home.

David Chen, a lawyer representing Tina Gully on the Ledcor matter and who was not involved in the estate planning, said that to be fair Ledcor has informed him that they don’t plan to kick Gully out of her home or seek to have the property foreclosed pursuant to the certificate of judgment.

“That said, I think to an extent, they put the judgment on the property and what they would like to do is collect on it eventually,” said Chen.

“And that may be when either Ms. Gully moves out because she’s very senior and she’s already looking at going to a seniors home, or when she passes.”

Steven Gully said he believes his mom got bad legal advice on the estate planning and unfortunately got dragged into his financial dispute with Ledcor.

He said he had “no idea” that his mom had given him half title on the property until the lien was placed on the home.

“As far as from a legal perspective, I’m certainly not going to oppose her motion. The easiest thing is to not respond and hopefully the judgment goes her way.”

In several e-mails, David Hoff, a spokesman for Ledcor, said that the son hired Ledcor to undertake construction for a commercial venture and as part of his assurance of payment, he made his personal assets available to the company as a guarantee.

He said that Steven Gully and his company owe $800,000 for the work, with the work involving Ledcor paying hundreds of thousands of dollars to local sub-contractors and professional trades.

“Despite extensive efforts by Ledcor to work out a mutually acceptable payment plan, Steven and his company reneged on the arrangement,” said Hoff.

The company spokesman said that as a result of the son’s failure to pay his debts, the company secured the 50 per cent equity in the Burnaby home and added that if the debt is paid, Ledcor will remove its interest in the suite.

“Ledcor is not taking any steps to disrupt the use of the premises by the mother. It is only protecting its rights as a judgment creditor.”

The case is expected to be in court Aug. 17.

Article read here. Keith Fraser @ The Province.

Tibor Bogdan & Associates
*Personal Real Estate Corporation
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Home Sales Finally Cooling in the Fraser Valley. But locally softening in market compares to big drops to the West

Article by: Paul Henderson – Black Press

As real estate sales and prices cool in the Lower Mainland’s two largest real estate markets, there has been more of a levelling off in the Chilliwack and District Real Estate Board (CADREB).

While the Fraser Valley Real Estate Board saw a 10 per cent decline in dollar-volume sales in May 2018 compared to May 2017, and the Greater Vancouver Real Estate Board saw a 20 per cent decline, in CADREB – which includes Chilliwack, Agassiz, Hope and all places in between – there was a small two per cent increase.

Unit sales, however, dropped 12.9 per cent in CADREB last month compared to 19.3 per cent in the Fraser Valley and 22.5 per cent in Vancouver.

The discrepancy in those numbers comes from the steady prices year-over-year to the west of Chilliwack, and a 17.7 jump in the average sale price in May locally from $457,956 last year to $538,999 last month.

Province-wide the average sale price of a home in May was down 1.7 per cent from $752,551 to $739,783, pointing to the relative bargain that still exists in the CADREB area.

All of this may continue to cool even further, however, as the numbers point to listings on the rise, up 36 per cent year over year from just 936 last May to 1,277 last month.

And, anecdotally, sellers are finding their homes on the market longer than in recent months and years, and the market is turning away from bidding wars towards price reductions.

All these numbers come from the British Columbia Real Estate Association (BCREA), which reports overall a 28.7 per cent decrease in sales year over year.

“BC home sales continued to slow in May because of more stringent qualifications for conventional borrowers,” said Cameron Muir, BCREA’s chief economist. “The changes in mortgage policy are taking their toll on housing demand, not only in British Columbia, but across the country by reducing household purchasing power and housing affordability.”

Article read here.

Tibor Bogdan & Associates
*Personal Real Estate Corporation
Sutton Showplace Realty
cell: 604-855-2521
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I’d like to share this article I read on “Good Debt vs Bad Debt”.

Our goals are to eventually become debt free, if possible, but the careful use of debt can be a tremendous benefit. You may have heard the term “Good Debt” and wondered what that could mean so allow me to explain:

Good debt is considered to be funds that you borrow to purchase an appreciating asset or to garner a higher return elsewhere. Examples are real estate that rises in value over time, a business or investment venture or even a student loan to provide an education which will result in the borrower earning a higher income. Basically, it is using borrowed funds to invest in your future that will hold a greater return later. This is good debt.

Bad debt would be money you borrow to purchase a depreciating asset. Examples of these include vehicles, luxury items and other consumables that have little or no value over time and/or do not generate any revenue. These debts are almost always at a much higher interest rate than good debt. Make no mistake, this is bad debt!

Another way to look at good debt vs. bad debt is the type of debt, regardless of its purpose. If you were to invest in a business with a credit card debt that has a 23% interest rate then this would be considered bad debt as it is high rate, perhaps higher than your return, and has a very high repayment rate, putting you at risk of not being able to make the monthly payments. Perhaps this is an extreme example, but you get my point.

Let’s have a look at the types of debt individually:

Credit card debt is considered bad debt. Credit cards are not evil if they are used prudently and balances are not carried over but any long-term debt on credit cards is bad debt and your credit score will suffer as well.

Auto loans would be bad debt as vehicles depreciate very quickly. Sometimes the rates are not too bad, but those payments make it much harder to access good debt such as a mortgage.

Mortgages are considered good debt because real estate generally appreciates over time. You are also borrowing at a lower interest rate. Consolidating other bad debts that were perhaps taken during times of emergency (or perhaps bad choices) into this good debt is a prudent move.

Home Equity Lines of Credit, which are another type of mortgage, can be either good debt or bad debt depending upon what they are utilized for. I often see people only paying the interest only portion that is required every month or using these products for daily expenses. This would be a bad way to use a potentially good debt.

Article: http://www.spencerennis.ca

Tibor Bogdan & Associates
*Personal Real Estate Corporation
Sutton Showplace Realty
cell: 604-855-2521
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In the past few days I was reading articles that are attempting to predict Canadian Real Estate for 2014. The truth is that nobody knows the future. However, I couldn’t help myself to create my own list of top 3 Real Estate predictions for 2014.

1. The real estate market won’t crash. Contrary to many opinions from “industry experts,” there will not be a crash in Real Estate in B.C.

2. New mortgage rules. Expect more rule tightening in 2014 designed to reduce mortgage
risk for lenders, and make the home purchase less affordable or:

3. Interest rates will go up or they won’t. Hybrid mortgages will grow more popular. Economists and government officials have been warning us of higher rates for four years. So far they’ve been wrong, and now many consumers aren’t sure what to believe. More Canadians will hedge their rate bets with hybrid mortgages (part fixed and part variable).

I hope you can read between the lines and sense bit of humor in these predictions. My opinion is that 2014 will not be much different then 2013 was. I am anticipating balanced market conditions with slight price fluctuations based on seasonal tendencies.

Happy New Year!

Tibor Bogdan
Landmark Realty
https://www.facebook.com/TiborRealEstate