Shah Ahmed.com, SKagent.ca, Saskatoonagent.ca, therealtyconsultant.net, saskatoonhomes.biz

To claim moving expenses on your taxes, your move has to meet the following conditions:

• You moved to your new home or new apartment to start a job or a business, or to attend full-time post-secondary courses at a university, college or other educational institution
• Your new place of residence is at least 40 km closer to your workplace or school than your previous home.
• You moved from one place in Canada to another place in Canada.

Two groups are eligible to deduct a portion of their moving expenses: students moving away from home to attend school and people moving to a new area for a job or relocation by their employer. There has been a challenge to the rules regarding eligibility for the self-employed as you'll read later in this article.

Students

Students must fulfill two main qualifications: the distance between your home and school must be at least 40 km (by the shortest public route) and you must be a full-time student. A full-time student is defined as someone who regularly attends a college, university, or other educational institution in a program at a post-secondary school level (whether in Canada or not) and is taking at least 60% of the usual course load during each semester.

As a student, you can only deduct eligible moving expenses from award income (scholarships, fellowships, bursaries, prizes, and research grants) that you report on your return. Your moving expenses must be greater than your award in order to deduct any moving expenses. As Revenue Canada's website reads, "If your moving expenses are more than the award income you report for the year, you can deduct the unused portion of those expenses from the award."

Although many students will not earn award income and will therefore not be able to deduct moving expenses, tuition fees themselves are a tax deduction. If a student has a part-time job, tuition can reduce taxes paid on those earnings. Students who meet the qualifications and have received award income can deduct the costs of travel, shipping and transportation of belongings, as well as items listed below under 'Expenses you can deduct'.

Employees

If you are moving for work (e.g. a company relocation or new job), are employed and establish a home at least 40 km closer to a new job than your old home, then you qualify to deduct moving expenses. Similarly, if you are self-employed, and you establish a home at least 40 km closer to your new operational business than your old home, you also qualify to deduct moving expenses.

According to Revenue Canada, you must establish your new home as the place where you and members of your household ordinarily reside. For example, you have established a new home if you have sold or rented (or advertised for sale or rent) your old home.

Employed and Working from Home: an Exception to the Rule

Until recently, employees who work from home and move have faced some restrictions regarding moving expenses. In the court decision Gary Adamson v. the Queen, Mr. Adamson had incurred moving expenses as an employee who was required to provide his own office in his home.

Expenses you can Deduct:

1. transportation and storage costs (such as packing, hauling, in-transit storage, and insurance) for household effects, including items such as boats and trailers;
2. traveling expenses, including vehicle expenses, meals, and accommodation, to move you and members of your household to your new residence (you can choose to claim vehicle and meal expenses using the simplified method);
3. costs for up to 15 days for meals and temporary accommodation near either residence for you and the members of your household (you can choose to claim meal expenses using the simplified method); and
4. the cost of canceling a lease for your old residence, except any rental payment for the period during which you occupied the residence.

When your old residence is sold as a result of your move, eligible moving expenses also include:

• legal or notaries fees for the purchase of the new residence, as well as any taxes paid (other than GST/HST or property taxes) for the transfer or registration of title to the new residence, if you or your spouse or common-law partner sold the old residence, and
• the cost of selling your old residence, including advertising, notarial or legal fees, real estate commission, and mortgage penalty when the mortgage is paid off before maturity.

Expenses that are not Deductible:

• expenses for work done to make your home more saleable;
• any loss from the sale of your home;
• expenses for house-hunting trips before you move;
• the value of items movers refused to take, such as plants, frozen food, ammunition, paint, and cleaning products;
• expenses for job hunting in another city (such as traveling expenses);
• expenses to clean or repair a rented residence to meet the landlord's standards;
• expenses to replace personal-use items such as tool sheds, firewood, drapes, and carpets;
• mail-forwarding costs (such as with Canada Post);
• costs of transformers or adaptors for household appliances; and
• costs incurred in the sale of your old home if you delayed selling for investment purposes or until the real estate market improved.

Remember to keep receipts and documents supporting your claims, you do not have to include these documents in you tax claim but Canada Revenue Agency may want to see them at a later date.

Keep in mind that this article is for information only. The tax laws are frequently modified. We recommend that you visit the Canada Revenue Agency's website for specific details about which moving expenses you can claim or consult a professional accountant to maximize your tax return.

Finance Minister Jim Flaherty recently unveiled new mortgage rules aimed at stopping housing speculators and ensuring homebuyers can adequately handle their debts when interest rates inevitably rise. Mr. Flaherty stressed that Canada's real estate market is healthy, and that the new rules, which take effect April 19th, would stop “negative trends” from development.

"There's no clear evidence of a housing bubble, but we're taking proactive, prudent and cautious steps today to help prevent one. Our government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it," commented Minister Flaherty.

"The underlying message is that Canadians should be prudent in the obligations they take on because we can all expect that mortgage interest rates will rise over time," Flaherty added.

Here is a quick look at the changes which apply to government-backed insured mortgages:

1. Borrowers must now qualify based on a five-year fixed rate even if they choose a mortgage with a lower interest rate and shorter term. The government’s rationale for this change is that it will help borrowers prepare for higher rates, although it may squeeze the purchasing power of home buyers. It remains unclear whether borrowers must qualify at the five-year posted rate or the five-year discounted rate.

2. The maximum amount Canadians can withdraw in refinancing their mortgages will be reduced to 90% of the value of their homes, instead of 95%. This change will help ensure home ownership is a more effective way to save. The impact of this change is expected to be minimal as relatively few homeowners withdraw equity from their homes to this extent.

3. A minimum down payment of 20% will be needed for government-backed mortgage insurance on non-owner-occupied properties “purchased for speculation,” which realistically means rental properties. While this measure is intended to hamper the speculative buying of properties by reducing the leverage of buyers, it will also impact those buying real estate for general investment purposes.

How will these changes affect the Canadian real estate market?

For most consumers, the changes are unlikely to make it harder to get a mortgage but it could reduce the size of the mortgage an individual consumer can negotiate with a lender. And they might have to look at buying slightly less expensive properties.

People buying real estate for investment purposes including those looking for rental properties may find it harder to get into the market as they have to shell out more money form their own savings.

Undoubtedly there will be a rush of mortgage applications to beat the April 19th deadline. However it is expected some lenders will start to implement these guidelines before April 19th.

Some volatility is expected in the housing market in the short term as home buyers rush to beat the April 19th date. After that, the activity will likely fade because so many buyers moved up their purchases. This could end up softening the sharp year-over-year price increases that have been characteristic in many cities recently.

The economic implications of this rule change are unlikely to be severe, and we expect the housing market to slow its ascent without crashing down.

The Canadian housing market continues its healthy upward trend across the country, with significant increase in both number of sales and sale value. This trend is expected to continue through to early Spring as we approach the  upcoming changes to mortgage qualification rules.

Buyers in Ontario and British Columbia  are aware of two key changes that could impact their purchasing ability. The new mortgage rules coming in April, plus the Harmonized Sales Tax in July.

“The upcoming changes to mortgage qualification rules and impending mortgage rate increases may prompt some buyers to enter the market earlier and cause some additional slowdown in the third quarter,” said Larry Westergard, president of the REALTORS® Association of Edmonton.

Below is a brief summary of sales activities in some areas across the country:

Ontario - A Great Start to 2010 for Ontario Housing Market

Toronto, March 3, 2010 -  Greater Toronto REALTORS® reported 7,291 sales through the Multiple Listing Service® (MLS®) in February, representing a 77% increase over February 2009. The average price for these transactions was up 19% year-over-year to $431,509. Sales and average price increases represent both increased demand for ownership housing and the base year effect, which involves a comparison of economic recovery this year to a period of economic decline last year.

“Increases in existing home sales and average price were noted across the Greater Toronto Area (GTA) in low-rise and high-rise home types. Similar rates of growth were experienced in the City of Toronto and surrounding 905 regions,” said Toronto Real Estate Board (TREB) President Tom Lebour. “This suggests that first time, move-up and down sizing buyers are all active in the existing home marketplace.”

New listings also increased in February, climbing 24% compared to the same month last year.

“Annual growth in new listings is expected to continue. New listings growth will start to outstrip sales growth as we move through 2010,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “As the market becomes better supplied, we will see more sustainable single-digit rates of price growth.”

Ottawa, March 5, 2010 - Members of the Ottawa Real Estate Board sold 1,118 residential properties in February through the Board’s Multiple Listing Service® system compared with 787 in February 2009, an increase of 42.1%.

Of those sales, 323 were in the condominium property class, while 795 were in the residential property class.

“Last month’s sales were near the top of the usual range for this time of year, as opposed to February of 2009, which was the end of the brief slowdown we saw in Ottawa’s resale housing market due to global economic conditions,” said Ottawa Real Estate Board (OREB) President Pierre de Varennes. “So far in 2010, OREB Members have sold 1,838 properties, putting us well ahead of the 1,316 properties sold in the first two months of 2009. Inventory remains low and the homes that are listed are selling quickly, keeping Ottawa in a seller’s market for the moment,” he added.

The average sale price of residential properties, including condominiums, sold in February in the Ottawa area was $317,030, an increase of 15.8% over February 2009. The average sale price for a condominium-class property was $265,938, an increase of 30.3% over February 2009. The average sale price of a residential-class property was $337,788, an increase of 15.6% over February 2009.

British Columbia – Stronger than expected Fraser Valley home sales during Olympics 

Surrey, March 2, 2010 – Not even the most engaging Olympics in Canadian history could completely slow the appetite for house hunting, according to the most recent statistics from the Fraser Valley Real Estate Board.

The Board’s Multiple Listing Service® (MLS®) recorded 1,204 sales in February, an increase of 23% over January’s sales and an increase of 77% over the 682 sales during February of last year.

Deanna Horn, president of the Board explains, “Although the phones were quieter and we did experience less traffic at open houses, we were surprisingly busy given how much everyone, including REALTORS® were enjoying the Games.”

“Buyers are aware of two key changes that could impact their purchasing ability. The new mortgage rules coming in April, plus the Harmonized Sales Tax in July, so the ‘Olympic effect’ we were expecting wasn’t as deep.”

The Board’s MLS® received 2,879 new listings in February, an average of 144 per business day, providing buyers with 14% more selection than they had the previous month. The number of active listings in February was 8,485, 12% fewer than were available during February last year.

Horn adds that the combined strength of listings and sales currently is stabilizing Fraser Valley home prices. “Overall, we’ve seen modest price gains for the last three months. The benchmark price for all residential types combined increased less than 1% from January to February.

“When you have a healthy level of inventory, it puts less upward pressure on prices and creates a stable, balanced market.”

In February, the benchmark price for Fraser Valley detached homes was $508,136, an increase of 11.3% from the February 2009 price of $456,683.

The benchmark price of Fraser Valley townhouses in February was $324,708, a 9.8% increase compared to $295,731 in February 2009. The benchmark price of apartments increased by 7.8% year-over-year going from $228,091 in February 2009 to $245,879 in February 2010.

Alberta - Stability in Edmonton Housing Market continues through February

Edmonton, March 2, 2010 -  Prices for residential property sold through the Edmonton Multiple Listing Service® changed marginally through February. Sales activity, however, was up dramatically when compared to last month or the same month last year.
 
The average single family dwelling price was $369,573 for February up just 1.4% from January; 5.6% from a year ago. Condominium prices dipped 3.8% in the month from $240,686 to $231,530. Duplex and rowhouse prices were up 3.3% to $315,390.

“While prices remained stable through February the increase in sales activity indicates that there is a demand for housing in the Edmonton area,” said Larry Westergard, president of the REALTORS® Association of Edmonton. “Listings also increased in February leading to a bigger month end inventory of homes and relaxing concerns that inventory may be too low to handle the spring buying season.”

In February, housing sales were up 33.9% compared to January with 1,184 residential sales. Total residential sales were also up 7.6% from last February. There were 2,505 residential listings added during the month resulting in a 47% sales-to-listing ratio and a month-end inventory of 5,449 homes. The average days-on-market was down 10 to just 47 days.

Total sales through the Edmonton MLS® System (including residential, commercial and rural properties) in February were valued at $416 million (up 10.5% from last year).

.....................................
Information in this report is collected from the Real Estate Boards operating in each area. The average price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average price is calculated based on the total dollar volume of all properties sold. 

The Condominium Act requires condo developments to be constructed to a substantial level prior to registration of the condominium plan. Title to a unit cannot be transferred until the condominium is registered.

Thus, with newly built condominium apartments, there are two “closings”. The “interim closing”, occurs at the time of occupancy and the “final closing”, occurs at the time of final registration.

The process works something like this; the developer undertakes to build a condo development by submitting a site plan with the Municipality. When the Municipality registers this site plan it becomes a “Registered Site Plan”, setting out exactly what the developer is promising to deliver.

The developer then sells the suites as “pre-construction”; based on floor plans, brochures etc. Once the developer sells enough units, say 60% or more, they start the construction while continuing to sell the units.

When construction is completed, the municipality verifies the building to be in accordance with the registered site plan and issues the “Occupancy Certificate”. The developer start to contact all the buyers notifying them of their occupancy date, at this stage your unit is ready and liveable; you take possession of it, but not ownership. This is the first or “Interim Closing”.

Since the buyer’s down payment is deposited into the lawyer’s trust account, the developer does NOT receive any money until the building registers (final closing), a process that normally takes 4-6 months.

Until such time you must pay the developer “occupancy fees” for the right to live in the unit. The amount of the occupancy fees is roughly equivalent to the interest on the amount outstanding on the purchase price. For example, a $300,000 condo with 25% down means you must pay monthly occupancy fees roughly equal to interest payments on $225,000.

When the municipality completes its process and registers the building, the second or “final closing” take place. This is where the purchasers receive title to their property and their mortgage payments starts, and this is when the developer gets his money.

During the occupancy period the buyers undertake a portion of the developer’s mortgage, also called “Phantom Mortgage”, which is equal to their proportionate share of the overall condo.

The occupancy period is normally 4-6 months, but the higher up you are in the building, the shorter the occupancy period will be. So if you buy a unit on the ground floor, you can expect a long occupancy period. If you buy the penthouse, you will likely have a very short occupancy period.

There is no way to say absolutely how long the occupancy period will be. In most cases the length of the occupancy period depends on the experience level of the developer. Experienced developers who are familiar with process and have diligent lawyers working behind the scenes for them know how to build and how to register a building as quickly as possible.

It is in the developer’s best interest to register the building as quickly as possible and to have the occupancy period as short as possible. This is because they don’t get their money from the banks until the building is registered and all the unit owners have their mortgages commence.

The “Occupancy Fee” is made up of three components and is roughly equivalent to the:

1. interest calculated on a monthly basis on the unpaid balance of the purchase price 
2. the monthly maintenance fee contributed for the unit; and
3. a factor for property tax

In total it will be about the same amount as if you took a mortgage. But you cannot get a mortgage because there is no “Title” to the property, thus banks cannot issue a mortgage.

Occupancy fees will be paid to the developer when you purchase a new condo, it does not apply for re-sale condos.

The purchaser can avoid paying the interest portion of the occupancy fee should he/she elect to pay the full balance of the purchase price owing on the date of occupancy. However, in order to do this, the purchaser or his lawyer must request this during the 10-days rescission (or cooling off) period.

In all the cases it is left to the developer to include or exclude any of the above components in the occupancy fee, as long as this is made clear in writing and disclosed in the developer’s disclosure documents.

Figures released by real estate boards around the country are showing a positive upward trend in sales driven by improved affordability and less uncertainty about the future.

"Home sales have bounced back from the extraordinarily low levels recorded during the winter months," said Cameron Muir, BCREA Chief Economist. "Improved affordability and less uncertainty about the future are the main factors driving home sales higher."

“This was the best May on record for residential resale home sales in Ottawa,” said Board President Rick Snell. “Homes in every price range are selling well, from starter homes to luxury properties. Homebuyers and sellers are showing a lot of confidence in the Ottawa real estate market,” he added.

“We're now seeing greater balance in the housing market than what we have over the last while," says Linda Smardon, President of the Nova Scotia Association of REALTORS®.  “The bridge between buyer demand and housing supply is continuing to narrow, which helps maintain stability in housing prices," she adds.

Below is a brief summary of sales activities in some areas across the country:

Alberta - Housing sales continue to trend upward

Calgary, June 1, 2009 – According to figures released by the Calgary Real Estate Board, 1,584 homes was sold in the Calgary metro area in May. This is a 23% increase on sales in April.

“The spring market has received an added boost from a growing number of first-time buyers entering the market,” says Bonnie Wegerich, President of the Calgary Real Estate Board.

In the month of May, homes in Calgary metro priced at $400,000 or less accounted for nearly 70% of all home re-sales. “We are seeing the first year-over-year gain in single family home sales since last September,” says Wegerich. “A pent up demand has been building—with many first-time home buyers now taking advantage of affordable prices, record low interest rates and federal government housing incentives,” added Wegerich.

The average price of a single family Calgary metro home in May 2009 was $436,427, showing an increase of 2% from April 2009, when the average price was $426,311, and showing a decrease of 9% from May 2008, when the average price was $479,564. The average price of a Calgary metro condominium was $275,212, showing a 1% decrease from April 2009, when the average price was $277,953, and a decrease of 12% over last year, when the average price was $311,816.

“The gap between supply and demand at the end of last year was pushing prices down,” says Wegerich. “But since December we have seen five consecutive months of increases in home sales, while inventory continues to trend lower. The gap has narrowed and prices are stabilizing.” Single family Calgary metro new listings added for the month of May totalled 2,235, up 11% from the 2,010 new listings added in April 2009, and showing a decrease of 35% from May 2008, when 3,432 new listings came to the market.

British Columbia - Home sales continue to climb

Vancouver, June 11, 2009 – The British Columbia Real Estate Association (BCREA) reported that Multiple Listing Service (MLS®) residential sales in the province rose 3% to 8,270 units in May 2009 compared to the same month last year. It was the first year-over-year increase since December 2007. The month of May also posted the highest number of residential sales since April 2008, on a seasonally adjusted basis, and was the fourth consecutive month of rising home sales.

"Home sales have bounced back from the extraordinarily low levels recorded during the winter months," said Cameron Muir, BCREA Chief Economist. "Improved affordability and less uncertainty about the future are the main factors driving home sales higher."

"The combination of stronger consumer demand and fewer homes for sale is stabilizing home prices in many BC markets," added Muir.

Year-to-date, MLS® residential sales dollar volume was down 31% to $11.7 billion over the same period last year. A total of 26,359 units were sold in the first five months of 2009, down 26% from 2008, while the average MLS® price declined 7% to $443,252.
 
Nova Scotia - Average price of homes rises to new record in April

Nova Scotia, May 22, 2009 – The average price of residential  properties in Nova Scotia climbed to its highest level on record in April 2009. According to statistics provided by the Nova Scotia Association of REALTORS®, the average price for residential properties sold through the MLS® system in Nova Scotia was $206,668, a 5.4% increase over April of 2008.

The national average price was down 3.2% year-over-year. The average price in Halifax-Dartmouth, where homes are more expensive than in other markets in the province, rose by 6%. The increase in average price was greatest in the Annapolis Valley region at 15%, followed by the South Shore at 11%.

“The pricing trends indicate that consumers still have confidence in our housing market,” says Linda Smardon, President of the Nova Scotia Association of REALTORS®.

The number and value of sales were down in April 2009 when compared to April 2008. A total of 857 houses traded hands via the MLS® system in Nova Scotia, a 27% decline in sales activity. The value of all MLS® residential property sales in Nova Scotia decreased by 23%.

New listings posted their fourth consecutive year-over-year decline in April 2009, down 7% from year-ago levels.

“We're now seeing greater balance in the housing market than what we have over the last while," says Smardon. “The bridge between buyer demand and housing supply is continuing to narrow, which helps maintain stability in housing prices," she adds.

Active listings continue to rise in Nova Scotia, but year-over-year gains are slowing as new listings trend lower. The number of active residential listings increased by 9% which is the smallest year-over-year increase in 11 months.

Ontario - Record-breaking number of resale homes sold in May

Toronto, June 2, 2009 – Greater Toronto REALTORS® reported 9,589 sales in May which is almost 2% up from May 2008—the first annual increase since December 2007.

“The resale housing market in the GTA has remained resilient in the face of challenging times globally,” according to TREB President Maureen O’Neill. “Many home buyers have taken advantage of extremely low mortgage rates.”

The average price for May transactions was $395,609—down less than 1% compared to the same month last year.

“The average resale home price has moved in line with last year’s level because of tighter market conditions experienced this Spring,” stated Jason Mercer, TREB’s Senior Manager of Market Analysis. “Home sales have increased strongly relative to new listings, bolstering home prices.”

Ottawa, June 3, 2009 – Members of the Ottawa Real Estate Board sold 1,969 residential properties in May through the Board’s Multiple Listing Service® system compared with 1,896 in May 2008, an increase of 3.9%. That number also represents a 19% increase over the 1,594 sales recorded in April 2009.

Of those sales, 348 were in the condominium property class, while 1,621 were in the residential property class. The condominium property class includes any property, regardless of style (i.e., detached, semi-detached, apartment, etc.) which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

“This was the best May on record for residential resale home sales in Ottawa,” said Board President Rick Snell. “Homes in every price range are selling well, from starter homes to luxury properties. Homebuyers and sellers are showing a lot of confidence in the Ottawa real estate market,” he added.
The average sale price of residential properties, including condominiums, sold in May in the Ottawa area was $312,045, an increase of 5.3% over May 2008. The average sale price for a condominium-class property was $231,351, an increase of 4.6% over May 2008.

The average sale price of a residential-class property was $329,368, an increase of 4.7% over May 2008. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.