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A beautiful 1 bed + den, 1 bath condo in the iconic Olympic Village at Wall Centre False Creek.

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Emma Co PREC*
604.618.3888
emmaco.realty@gmail.com
vancouverprivatehomes.com

Big congrats to the new owners and my awesome sellers!
A big thank you to everyone who was interested! 

Want to create your own success story in real estate?
Give me a shout today! 

Emma Co PREC*
604.618.3888
emmaco.realty@gmail.com
vancouverprivatehomes.com

If you sell your home, only the portion you’ve been living in is exempt from significant federal taxation – which could disincentivize rentals.

The federal government of Canada has begun cracking down on capital gains taxes, which home owners are only exempt from on the sale of their principal residence.

Laneway homes and rental suites on a property are not exempt from capital gains tax upon the sale of the home, Western Investor editor Frank O’Brien explained to last week’s Real Estate Therapistshow on Roundhouse Radio 98.3FM.

The federal government has introduced a new rule that for the first time requires home owners to declare the sale of their principal residence in their annual income tax return, as of the 2017 tax year. As has been the case for many years, income from rental units – including laneway homes and suites on the property – must also be declared.

This new combination of information will allow the Canada Revenue Agency to see where home sellers are selling a principal residence that has been operating rental suites, leaving the portion of the home that was rented out liable for capital gains tax.

“People have been playing pretty fast and loose with the principal residence exemption on your home… It’s not just foreign buyers, it’s Canadians themselves who have been doing this for years,” said O’Brien.

“The problem now is that there has been rapid price appreciation in places like Metro Vancouver, and increasingly more homes are being allowed on individual lots [and they are required to be rented out or face Empty Homes taxation.]

“If you have a single-family home with two rental suites in the basement and a laneway house, all rented out. Only a third of the house could be said to be the principal residence and the rest is income-producing property and subject to capital gains tax.

“The bottom line is, say you sell the house and it’s worth $3 million. The government says ‘Aha, but $1 million of that property value is not exempt from capital gains.’ … The tax on $1 million, if you’re in the higher tax bracket – which you probably are in this scenario – is $238,500. If you’ve made a $200,000 capital gain, you pay $47,000.”

He added, “So now you have to start thinking, is it worth doing the rentals, because you may lose at the end, if it’s going to be subject to capital gains tax? It could remove these units from the rental pool.”

When asked if this is at odds with the City of Vancouver’s mandate to increase the numbers of basement suites and laneway homes being added to the rental pool, O’Brien agreed.

He said, “This is an indication of how the different levels of government don’t co-operate together on the housing file, with the federal government doing one thing and the province and municipalities doing something else – and the poor homeowner is just trying to follow the rules. But they’re the ones who get blindsided. It’s a great idea to have low-density rentals to help with the mortgages in the most expensive places in Canada – not so great if the homeowner is going to get nailed with huge capital gains tax. And a lot of these are older homeowners who are going to get nailed.”

Resource: http://www.rew.ca/news/selling-beware-capital-gains-tax-on-rental-suites-laneway-homes-1.21357427 

I came up with this article and just thought to share.. Enjoy!

Decorating Ideas Inspired by 6 of the World’s Most Stylish Countries

We all know that it isnt easy for most millenials to buy a home these days in Metro Vancouver.  But these 4 local homeowners born in the 1980's and 1990's showed that nothing is impossible if one wants to make some signicant sacrifices to their lifestyle to attain their impossible dream.

Tej Kainth expressed her relief that she made the decision to plunge into the market, as an executive of Tourism New Westminster, she had seen the transformation of the Royal City's downtown core in the past few years, so when an opportunity in 2012 for her to buy a 2-bedroom condo unit where completion is not till 2015, she knew she had plenty of time to prepare before she moved in.  She already had a 10-percent down payment; to get to 15-percent, she borrowed from her mom and dad.  Kainth began repaying her parents in regular increments while still lives at their home. Although she made sacrifices to cover strata fees and other expenses for her New West condo by not eating out as much and having close attention to her budget, but that's offset by the joy that comes from hosting her friends at her own home.  She also walk to and from work, she rarely uses her car so it saves her money for gas and parking.

Samson Tam is one of those young Millennials homeowners with easy access to Skytrain.  At 27, he's unto his 2nd home after buying a pre-sale unit on Main Street - Science World Station.  Raised in Coquitlam, Tam moved to Ontario to earn his Engineering degree.  During his coop terms in university, he saved as much as he could with the goal of buying a home in mind.  Soon after we found a job in Toronto, he bought a small place after his parents provided a loan as a downpayment, he recalls "for the first 2 years of mortgage, it was really, really tough.  My chequing account was never over $1000".  After gaining more experience, he was hired as an engineer back here in Vancouver, his parents adviced him to get a small 660 sf unit near Science World.  His adviced to young people without liabilities to save money if they're living rent-free with their parents.  "People are blowing money on expensive dinners, partying, weekend things" Tam said.

Another Young Homeowner, 31 year old Samantha Stewart, said that she originally wanted to buy a place in downtown Vancouver but after market research, she pulled the trigger on a two bedroom resale in the Fraserhood area for under $400,000.  She noted that the extra room will come in handy if she decides to get married one day and have a child.  Stewart also acknowledged that she cant just fly away for a three-month vacation nowadays.  Like other millennials, she also received help from her family for the downpayment of her unit which has kept her monthly mortgage of $1400 which is slightly higher rate than if she rents a basement suite.

25 year old Commerce Specialist Rita Lee, is moving with her 25-year old boyfriend into their first condo this October, her parents instilled in her the importance of putting her name on the title and own a property.  They bought a small place in Gastown area, "we could have gotten a bigger place in Kingsway area but location is very important to us" says Rita.

The recent mortgage rules have upped the ante for first time home buyers.  This month, the federal government declared that anyone with a downpayment of less than 20 percent of purchase price will only obtain government-backed mortgage insurance under this condition:they must qualify at whichever is higher, their contracted rate or at the Bank of Canada's 5 year fixed rate.  Also, all homebuyers will face a "mortgage stress test" before getting qualify for a mortgage insurance.  More info to come on the New Mortgage Rule.

Last weekend I had a chance to spend some time and have dinner with a school mate visiting for the first time here in Vancouver from the Philippines.  Besides the beautiful city, amazing views, Stanley Park, Granville Island the clean air and water that we are blessed with, she was quite surprised with the number of Filipinos living in our city.  She asked me “Emma, why is it that many of our kababayans that I meet seems so busy. They would have full time job, with a part time job on the side.  It’s actually quite exhausting listening to their daily routine”.   I told her that is the Asian immigrant work ethic.  Parents are willing to make sacrifices for the future of their children, and others being given a chance to earn a good living.  A few years back, I knew of a couple with their boy wanting to rent a whole house.  I initially questioned how they can afford it, and why rent such a big place. Both parents worked a number of jobs, took courses to enhance their.  For additional income hosted several home stay students.  Yet with all their sacrifice, creativity and team work they made it work.   They are now proud homeowners running a franchise business.

I recently found an article from BCBusiness by Felicity Stone:

In the article it explains how an ongoing research by UBC professor Daniel Hiebert based on national household survey data shows, 53 per cent of landed immigrants who arrived between 2006 and 2011 became homeowners in that period. Chinese immigrants at 73 per cent showed the highest rate of home ownership, followed by 52 per cent of South Asians, 51 per cent of South Koreans, and 44 per cent of White and Filipino immigrants.  Hiebert told BCBusiness “Most of the stories that appear in the press on immigrants are about the difficulties they’re having getting economically integrated into Canada, and yet their rapid acquisition of home ownership suggests that there’s a piece of the puzzle we’ve been missing.  Maybe things aren’t quite so easy in the labour market, but at the same time they are managing to buy houses pretty quickly so there are more things going on.”  Though the study did not include the property values, there were about 100,000 homes purchased in Metro Vancouver in his study.  

Is it a case of supply and demand or Foreign Money that are driving unaffordability in real estate Market in Vancouver?

The BC government continue to see that the real estate industry’s rapid home price increases are due to supply and demand while 2 Vancouver-based economists specialize in real estate  say that outside capital flows are the driving forces to unaffordability right now. “These housing prices do not make sense as a live and work proposition.  They make sense as bags of cash hiding out in real estate looking for a safe return”.

The BC Budget for 2016 try to resolve and help the home ownership within reach of more people with the following added: 

-          PTT (Property Transfer Tax) exemption for buyers of new homes that are priced up to $750,000 to $800,000

-          An increase to 3% for properties more than $2M for PTT; and buyers to self-report their nationality when they register their property.

In Budget briefing documents, the province sees that the Lower Mainland has historically had high housing prices and supply constraints demand from population growth are behind the price increases.

One director of a huge Urban Development mentioned that the lack of supply was the only answer to this dizzying levels of home price increases, another UBC professor mentioned that  Vancouver's land constraints and population increases were the main factors behind price increases , another point is the lowering of the Canadian dollar and massive change in the official currency reserves in China where wealthy individuals and companies are trying to get their money out of China in response to their economic slowdown.

There is a group of academics at UBC and Simon Fraser University who developed a proposal to charge higher property tax if property owners don’t live in the property or don’t report income in Canada.  The government seems to be seriously considering the proposal.