Toronto Income Property Newsletter: June 2016

For all you soccer fans, this month’s Euro tournament promises to be a fun-filled and action-packed affair. Congrats to the Raptors for their recent playoff success and let’s hope that the Blue Jays continue their winning ways. Also, best of luck to the Plex Rockets – our sponsored little league team.

The Toronto real estate market continues to be a challenge for buyers, despite talk that the market may be slowing up a touch. Some of the pent demand is slowly being sated but there are still a lot of people out there looking to buy. The market typically slows a little going into June, July and August before heating back up after Labour Day. Income properties remain in high demand as always, particularly those in the best neighbourhoods and those with the highest rents. If you ever have any questions about real estate investing in Toronto, or would like general information on the duplex and triplex market, please don't hesitate to get in touch with me.

I’d like to wish all the dads out there a Happy Father’s Day, and hope that all of you are enjoying this almost too warm weather.

 

- P.A.

Toronto for Sale – the follow-up.

Last month I touched upon the foreign ownership craze that has taken our city by storm. No sooner had I finished my piece that I notice that Macleans magazine that week was running a feature story on the exact same story. SOLD – it boasted in Chinese characters on the cover. It examined how Asians were buying a lot of Canadian real estate, particularly in Toronto. The average price for property viewed by Chinese property hunters in Toronto has increased over the past two years as the average price in Vancouver has declined, according to Juwai.com, a Shanghai based real estate Internet portal. The two cities have switched roles, with Toronto now attracting a higher-priced buyer mix than Vancouver. Canada is now the third most popular country for Chinese buyers after the United States and Australia, Juwai.com says. With gaining popularity, Canada has now surpassed Britain, which has slipped to fourth place.

My position is basically that if the federal government or the City of Toronto doesn’t place barriers for foreigners to buy up everything, then we shouldn’t be surprised or upset that this phenomenon is occurring. Foreign buyers do not have a competitive advantage. They either just have more money or a willingness to pay a little more than others in order to not lose in competitive offer situations. Remember that Sellers want their agents to get them as much money as possible, so should we really begrudge it when that happens – no matter who the buyer is?

Can you get a rebate on the Municipal Land Transfer Tax?

There is a rebate available on the municipal land transfer tax if you are a first-time purchaser of a newly constructed or re-sale residential property, it the following criteria is met.

The definition of a first-time purchaser is:

  • The purchaser is at least 18 years of age.
  • The purchaser must occupy the home as his/her principal residence no later than nine months after the date of the conveyance or disposition.
  • The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.
  • The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.
  • If the purchaser has a spouse, the spouse cannot have owned a home, nor had any ownership interest in a home, anywhere in the world while he/she was the purchaser's spouse. If this is not the case, no rebate is available to either spouse.

The rebate for first-time home purchasers is up to a maximum of $3,725.00. If you are eligible for a rebate of all or a portion of the MLTT you owe, your lawyer will be able to claim the rebate electronically through Teraview software when he/she registers your transfer/deed.

Do Income Properties pay more municipal Property taxes?

The property taxes you pay are a percentage of the phased-in assessment from the City. There may also be educational and transit levies assessed as well. Multi-residential properties are taxed higher than single-family residences. Take a look at the table below as provided by the City of Toronto:

Description City Tax
Rate %
Education Tax
Rate %
TransitTax
Rate %
TOTAL Tax
Rate %
Residential 0.5081190% 0.1950000% 0.0024847% 0.7056037%
Multi-Residential 1.5290188% 0.1950000% 0.0025294% 1.7265482%
New Multi-Residential 0.5081190% 0.1950000% 0.0024847% 0.7056037%
Commercial General 1.5361843% 1.2278260% 0.0025294% 2.7665397%
Residual Commercial
- Band 1
1.2811685% 1.2278260% 0.0021095% 2.5111040%
Residual Commercial
- Band 2
1.5361843% 1.2278260% 0.0025294% 2.7665397%
Industrial 1.5301969% 1.2946100% 0.0025294% 2.8273363%

 

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