Location Location Location, the 3 L’s real estate rule now means Transit friendly. According to REW.ca’s recent survey report - people under age 30 are now only considering purchasing real estate near transit hubs, where it is easier to move from point to point.

This information is very crucial when you are looking to invest in real estate. You need to consider these 3 factors:

• Is the municipality investing in public transit infrastructure?

• How fast can the public transit get you to your destination?

• Is the location within 7 to 10 minutes walk to public transit point?

Remember, transportation is a long term variable for real estate appreciation and making your real estate investment decision around transit hub could increase the resale value.

Property Transfer Tax Overhaul Required.  Stop Taxing the Middle Class!

Real Estate purchase & sale transaction taxation in BC would be more fair if everyone paid their share including the wealthy and big business!

In British Columbia the regular person faces an additional cost of Property Transfer Tax (PTT) on each purchase absurdly calculated at 1% of the first $200,000 and 2% on the balance.  Initially introduced in 1987 by Social Credit's infamous Bill Vander Zalm as a "Luxury Tax", now those who have accumulated wealth or "Luxury" escape paying. How? If you buy property via a shell company you don't pay a dime in PTT!

Yes, There is a first time home buyer exemption if your purchase is $475K or less.  A little difficult in Metro Vancouver.

Example:

$600,000  purchase price  is calculated at $2,000 + 2% * $400,000 = $10,000

That's $10,000 which goes directly to the BC Provincial Government's general account.  Meaning, it's a general taxation amount and not necessarily earmarked for specific uses such as transit or other roads/upgrades.

The average home price in Vancouver (West Side) is over $3M.  Let's calculate how much in tax is not being paid by purchasers using a shell company.

$3M purchase price is calculated at $2,000 + 2% * $2,800,000 = $56,000

What if we ALL PAID our fair share, say 1/2 a percentage on the total purchase price and stop giving the discounts to companies.  Not to mention all the multi-million dollar commercial development properties/projects also escaping this tax!

$600,000 * .5% = $3,000                                         $3,000,000 * .5% = $15,000

Doesn't the provincial government realize that $18,000 is more than $10,000? Fair is Fair.  Collect from EVERYONE.  Stop giving those with LUXURY the luxury of NOT PAYING PTT!

Foreclosures

A foreclosure is a judicial sale process where a lender applies for a judicial or court-ordered sale which will be carried out under the supervision of the court because they have not received mortgage payments due.

The court (or Judge) has a duty to get the highest possible price for the property.  That means highest price - not the amount left owing on the mortgage to satisfy the lender.  The highest price is usually very close to market value.

Bargain hunters beware - Foreclosures most often sell for fair market value. Foreclosures are listed on MLS and given full exposure to the market by a Realtor.   These gems can look enticing due to list price.  The list price is as low as possible to attract the largest number of interested parties.  After all, now that the bank owns the property, they don't want to continue to incur costs such as insurance, strata fees, taxes, etc.  The property can be in a run-down state, with or without appliances and the bank will make no promise to convey the property in the state you viewed it.  It's Buyer Beware.  If you're up for the risk, there might be an upside.  It's important to have a budget that allows for purchasing new appliances (because they might be gone) and some repairs you might not have initially discovered may come to light.

Due to the significant increases to our real estate market in the Greater Vancouver area, there have been very few foreclosures (less than 3% of all listings).  In North America, the average foreclosure market is somewhere between 5% - 7.5% excluding the sub-prime era.  If a homeowner was facing financial hardship, they could  sell their property before the lender received the final order to sell called "Order Absolute".  There was usually enough equity to satisfy the lender.

We haven't seen a significant gain in the market since 2008 in the Metro Vancouver Area.  If an owner purchased at the height of the market (May 2008) with 5% down, their home may actually be worth less than they owe on their mortgage.   

If you'd like to know the steps you need to take to buy a foreclosure property in BC, please email me info@lisagordon.ca

Government reduces tax burden on first-time buyers

First-time home buyers received welcome news in today’s provincial budget. 

The government has announced, effective February 19, 2014, under the Property Transfer Tax (PTT) First-Time Home Buyers’ Exemption program, qualifying first-time buyers can buy a home worth up to $475,000. The previous threshold was $425,000.

The partial exemption continues and will apply to homes valued between $475,000 and $500,000.

With this change, the government estimates 1,700 additional first-time buyers will annually be eligible to save up to $7,500 in PTT when they buy their home.

The government estimates this measure will cost $8 million in lost tax revenue each year.

In 2008, as a result of industry lobbying, the provincial government increased the threshold to $425,000 from $375,000. In 2005, the government increased the threshold to $325,000 from $275,000.

The PTT is calculated at a rate of one per cent on the first $200,000 and two per cent on the remaining value of the purchase price.   For example PTT calculated on $500,000 is $8000 which is not eligible to be rolled into your mortgage, as is the case with CMHC fee (downpayment < 20%).

Woah!  Stop the Cranes! Not In My Back Yard! 

North Vancouver, City District and West Vancouver have seen almost no large scale development and density increase for almost 20 years. That's about to change.  What's caused the recent increase?  What does it mean?  What will be the effects?

The North Shore has had a stable population with almost no increase in number of people for the last 20 years. The 3 main communities of are considered 'bedroom' communities, mostly comprised of single family homes.  Back in the 1970's a family of 5 or 6 people lived in one 2,500 sq. ft. 3 bedroom house.  Now it is not uncommon for 2 people to live in over 4,000 sq. ft.  Children of these homeowners find it near impossible to own a single family home.  So bottom line, less people are living in larger homes.

Problem?  Yes... no new people = no children attending schools.  We've seen 5 school closures in the last few years.  Our infrastructures are beginning to suffer as we have not adequately planned to fund our sewer, transportation systems/roads, parks & recreation. Basically, no new people = no new tax base to fund all municipal costs.

We DO need new development.  Simply to keep our schools, parks & recreation centres and lifestyle we've come to love.  We also need to get out of our cars.  I support our community village density themes where we live closer to amenities and consider Google Walkability Score as a purchasing factor when buying real estate. 

Why now?  Developers have been focused toward the communities such as Surrey, Langley, Port Coquitlam & Maple Ridge where land is comparatively cheaper - but unless you take rapid transit or have a great commuting plan - your life is ruled by our local traffic only radio station!   People have discovered - they want to LIVE, WORK & PLAY in their community. The North Shore is the perfect place to call home with an abundance of natural surroundings and views.

We can learn from other communities.  If we can continue to centralize our village areas, support density that affords community amenities nearby, we will be all be successful in the long term = continued healthy market real estate values.

I support - village settings & amenities, more bare land strata opportunities (assemble 3 lots, build 6-8 residences), high rises near town centres, medium density further away. Laneway housing, secondary suites and less car trips.  Bottom line - intelligent well planned increased development will help us all live healthier lives.