Sunday, May 10, 2009

Financing your first home

Financing your first home
TD Insurance

Even if you think you couldn’t possibly afford a home, these creative solutions can turn you from a renter into an owner.
Like many would-be homeowners, you may be wondering how you can possibly afford to buy your first home, especially if you live in a hot real estate market. But these savings and financing strategies can take you there sooner than you think.
Coming up with the cashSaving for a down payment can be a financial challenge. Here’s how to do it.• Make saving automatic. Set up an automatic savings plan at your bank to regularly move a specific amount of money directly from your chequing account to a savings account — on payday, for instance. You’ll be surprised at how quickly the “pay yourself first” approach adds up.
• Take a holiday from tax. If you open a new Tax-Free Savings Account (TFSA), you won’t pay any tax on earnings — helping you compound your savings. You can contribute up to $5,000 a year to a TFSA, and save for anything you like, tax-free.
• Borrow from yourself. The federal government’s Home Buyer’s Plan (HBP) lets you borrow from your Registered Retirement Savings Plan (RRSP) to help purchase your first home. You and your partner can each withdraw up to $20,000, provided it’s not locked-in and the money has been in the RRSP for at least 90 days. You have to repay the loan in installments over the next 15 years to avoid a tax hit.
Review your mortgage optionsWith many alternatives to choose from, finding the right mortgage product and terms can make a big difference to your ability to carry the costs of a new home.
• Stretch out your term. You can now choose to pay back your mortgage over 30 or 35 years, instead of the traditional 25-year amortization period. It means you will pay more interest over the long term, but you can reduce monthly payments to get into your starter home. You can always change this later, once your income rises and you can pay your mortgage down faster.
• Look for perks. Find out about mortgage programs that may offer valuable incentives, such as cash back options, points programs or retail discounts. The right program could help you keep cash in your pocket.
Remember, once you’ve bought a home, you can look for ways to pay the mortgage off sooner, which will reduce the long-term interest costs on that home of your own.

Wednesday, March 25, 2009

Why its time to buy a house....

Why it’s time to buy a house <> Experts say right now may be the best time in years to buy a home Friday, March 6, 2009 Julian Beltrame Canadian Press OTTAWA - Jim Rawson says it's a great time to buy a house.
The regional manager of Invis mortgage brokerage firm in Toronto has been in the business since 1978 and has never seen interest rates, both variable and fixed, so low. Pair that with falling housing prices and it's a no-brainer.
"People have to have somewhere to live and whether you are paying for a mortgage or paying rent, you still have to be paying to live somewhere," Rawson explains.
But something is missing in the equation. As prices for most consumer goods, cars and homes decline - in some cases plunge - and the cost of borrowing falls, Canadians have been hesitant to buy.
The Bank of Canada did its part this week to lure consumers and businesses out of their fox hole, dropping the overnight rate down to an unheard of half per cent - virtually zero.
Canada's chartered banks lowered their prime rate to 2.5 per cent on Tuesday, shortly after the central bank moved, and by the end of the week were lowering other lending rates.
TD Canada Trust, for one, is reducing several of its posted fixed-term mortgage rates on Saturday. TD's biggest decrease was with its two-year mortgage, which falls to 5.0 per cent from 5.75 per cent.
Scotiabank went even further, lopping nearly two full percentage points off the advertised price for its 10-year mortgage, which fell to 5.25 per cent from 7.15 per cent, effective Friday.
By almost every measure, Canadians have slowed down borrowing and spending, most visibly in the auto sector, which saw sales volume crash by 28 per cent in February.
The Canadian housing market, for years a source of boundless growth, has come crashing to earth with sales, prices, and construction of new homes all down, in many cases by double-digits.
Consumers have also stopped discretionary purchases, as the 5.4 per cent contraction in retail sales in December - the largest in 15 years - shows.
"I think they're scared out there," says Bruce Cran of the Consumers' Association of Canada. "Consumers are tapped out and frightened of over-spending. They are going back to being savers."
Bank of Canada deputy governor Pierre Duguay may have a point in saying there is a danger of "irrational fear" taking hold, but there are also very real reasons to be concerned.
Canada lost 129,000 jobs in January, the third straight month of decline, and announcements of future layoffs are being posted almost daily. Everyone is predicting the Canadian economy has much further to fall after contracting 3.4 per cent in December.
There is also fact that the days of easy money are over. Chartered banks are being more choosy who they lend to and interest rates - low as they are - are higher than they might be given the central bank rate and non-existent inflation.
Variable rate mortgages, for example, formerly could be had below the banks' prime rate. The prime rates have fallen, along with the Bank of Canada's moves, but now banks' variable mortgage rates are well above prime.
Individuals have also cut back on borrowing, hence spending. TD Bank chief executive Ed Clark said this week that overall demand for loans is coming down.
Under normal times, economists would say that is a good thing. Rampant buying, particularly in the United States, was a major contributor to the financial sector meltdown that brought the world low.
Americans have now pulled back big time making matters worse, even though the Federal Reserve rate at 0.25 per cent is lower than the Bank of Canada's. The U.S. once lamentable savings rate has shot from just above one per cent to five per cent in a matter of months.
The amount of debt Canadians held as a ratio of their income increased last year to 136 per cent from 130 per cent. What kept them solvent is that low interest rates made the cost of servicing that mounting debt at affordable levels.
That is as long as jobs, incomes and the economy were advancing. In a recent CIBC World Markets report, economist Benjamin Tal showed the squeeze was underway.
Canadians assets fell by $160 billion in the third quarter, he noted, adding that with house and equity values falling, Canadians would likely be another $180 billion poorer in the fourth quarter. Values haven't gotten better since.
As well, debt is rising and consumer bankruptcies are jumping - 13.5 per cent last year with expectations they could hit 30 per cent growth this year. Mortgage arrears are also on an upward path, rising from a record low of 0.24 per cent to the current 0.33 per cent, the highest in six years.
But the big number, says Tal, is the number of Canadians who have lost their job and the much bigger number that are for the first time in many years afraid of losing their job.
"The issue is confidence," he said. "People talk about the unemployment rate going to eight and nine per cent, but the focus should be on the 91 per cent of people who are employed and are concerned about their jobs."
Tal and most economists believe that Canadians will start spending again because they no longer can put off purchases. But he doesn't believe they will spend with the reckless abandon of the recent past.
"After the crisis is over, consumer spending will be stronger but not like it used to be because it was artificially strong before, using borrowed money," Tal said.
Rawson believes that time is coming soon, at least in the housing market.
Applications for mortgages in his Toronto office have doubled since December, Rawson says, with many in the pre-approved market. That usually involves first-time prospective buyers making sure all their ducks are lined up before taking the plunge.
"These are people who haven't bought yet but they will buy in the future," he says.

Tuesday, March 17, 2009


Credit conditions easing, banks no longer struggling to raise funds to make loans
From Tuesday's Globe and Mail
March 17, 2009 at 2:00 AM EDT
Canadian banks are turning down some of the funding that the government is making available to them, a sign that they are recuperating from the financial crisis.
The banks have stopped selling the government the full amount of mortgages they could under Ottawa's $125-billion mortgage purchase program, the centrepiece of the federal government's plan to help the industry.
“We actually don't need a lot of funding right now,” a senior banker at one of the big five banks said yesterday. “All of the Canadian banks are pretty flush right now with cash.”
That's not to suggest they aren't facing problems, with consumers increasingly losing their jobs and unable to pay off their debts. But the banks are no longer struggling to raise funds to make loans – at least for now.
Credit conditions for Canadian banks have improved since late last year, as Canadians jittery about the stock market have left more of their money in bank accounts, giving them a ready pot of cash to fuel lending. At the same time, global credit markets have eased slightly as central banks have pumped billions of dollars into the financial system.
Federal Finance Minister Jim Flaherty announced the creation of the mortgage purchase program in early October, when it was extremely difficult for banks around the world to fund their lending operations.
He originally said Ottawa would buy up to $25-billion of mortgages from the banks, through Canada Mortgage and Housing Corp., to free up capacity for them to make new loans.
The purchases take place in periodic auctions that actually turn a profit for the government. Ottawa tells the industry how much it is willing to buy – for instance, $5-billion worth of mortgages held by the banks on their balance sheets – and then the banks each say how much they would be willing to pay, in the form of interest, to sell mortgages to the government. CMHC accepts the most profitable bids.
Bankers have been griping that the program, which is projected to earn billions of dollars for Ottawa, is expensive. But until last month, that hadn't stopped them from selling all of the mortgages that they could into it, and pressing Mr. Flaherty to buy even more. Well into the new year, banks continued to have trouble raising medium-term funds.
Ottawa boosted the size of the program twice, most recently announcing in the federal budget that it would buy a total of up to $125-billion worth of mortgages. The program has been successful in leading to a reduction in mortgage rates for Canadians, with banks passing on their lower funding costs.
But in the last couple of auctions, the banks have not sold the full amount of mortgages Ottawa was willing to buy. The most recent one took place on March 11, when CMHC told the banks it would buy up to $4-billion worth. Banks sold it about half that, $2.1-billion.
That followed the Feb. 20 auction, when banks sold CMHC $2.3-billion worth after it said it would buy up to $7-billion from them.
There are a couple of reasons why the banks have lost some of their appetite for the government aid.
More Canadians are pulling their cash out of mutual funds and riskier investments and parking it in deposits, such as chequing accounts and GICs. Deposits are the largest source of funding for the banks. If stock markets recover, and customers shift their money back into mutual funds and equity investments, the banks could find themselves in need of funding help again, notes Toronto-Dominion Bank chief economist Don Drummond.
At the same time, the growth of banks' loan portfolios is slowing. The soft housing market led to very weak mortgage originations in January and February, Mr. Drummond said.
Still, the slackening demand for government help does suggest that credit conditions have eased. The lack of take-up on the mortgage auctions “seems to point to the fact that the Canadian banks are not in a big liquidity crunch themselves,” said Marlene Puffer, a managing director at Twist Financial Corp.
That means the banks' lending operations are not being held back by an inability to raise financing, she added: “Any constraints in terms of the banks lending are coming more from inside the banks than any constraints they're facing in terms of raising capital.”
The Canadian Bankers Association said in an e-mailed statement that the mortgage purchase program is still an effective tool, noting that it's already injected more than $53-billion worth of liquidity into the marketplace so far.
A spokeswoman for CMHC declined to comment yesterday, noting that the details of the auctions are confidential.

Philip Beer
Regional Vice President
Street Capital Financial Corporation
2401-1 Yonge Street
Toronto, Ontario

Thursday, March 12, 2009

Kingston Life Magazine

Kingston Life Magazine is published 6 times a year. On page 16 of the current issue, there is a snippet of statistics on the housing market in Kingston. Please visit the website at for more information about this magazine. Our listing at 128 Earl Street is features in the article! The current price on this home is $835 000.....a beautifully renovated townhouse in the heart of Sydenham Ward.

Green Energy Act, 2009

REALTORS® oppose mandatory home energy audits
On February 23, the Government of Ontario introduced Bill 150 the Green Energy and Green
Economy Act (GEA), 2009. Included in Bill 150 is a provision that will require all home owners to
provide an energy audit report to prospective buyers. Currently, the bill is in the second reading
stage of the legislative process.
To read Bill 150 in full click here.
While OREA supports the principles of energy conservation and environmental stewardship that
are enshrined in the GEA it opposes any policy that imposes unnecessary costs on homeowners and
delays on real estate transactions. Instead, OREA supports the existing government program that
encourages homeowners, through rebates, to assess the energy efficiency of their home voluntarily.
In the week following the introduction of the Bill 150, OREA issued a press release outlining
REALTOR® concerns with respect to mandatory home energy audits, while also conducting a
number of media interviews. In addition, OREA forwarded briefing notes outlining REALTOR®
opposition to mandatory home energy audits to all Ontario MPPs. These briefing notes have
been used during debate in the legislature on the bill. Lastly, OREA met with senior officials in
the Ministry of Energy and Infrastructure to directly communicate REALTOR® opposition to
mandatory home energy audits.
To read the briefing note provided to MPPs on mandatory home energy audits click here.
OREA will continue work on behalf of REALTORS® and homeowners at Queen’s Park, pushing
for amendments to Bill 150 that will mitigate the effects of mandatory home energy audits on the
real estate market.

Saturday, March 7, 2009

RRSP Home Buyers Plan changed

The changes to the RRSP Home Buyers Plan introduced in the new budget are not only good for potential home buyers, they are also seen as a victory for OREA and CREA. “It’s gratifying to see that our lobbying efforts at the national level for enhancements to this program have paid off,” says Weir.
The 2009 budget increases the withdrawal limit for the RRSP Home Buyers Plan to $25,000 from $20,000 providing first-time home buyers with additional access to savings to purchase or build a home.
The eligibility and repayment rules remain pretty much the same. The money withdrawn from the RRSP must be repaid over a period of no more than 15 years to retain its tax deferred status. The repayment period starts the second year following the year the first withdrawals were made. If a participant pays less than the scheduled annual payments, the amount that they don’t repay must be reported as income on their tax return for that year.
For example, in October 2009 a first time buyer withdraws $24,000 from his or her RRSP to finance the purchase of a home. Their first annual repayment of $1,600 ($24,000 divided by 15 years) is due by December 31, 2011.

Thursday, March 5, 2009

Bank of Canada cuts rates

Bank of Canada signals that the rate will remain at this level or lower into 2010 and promises a framework for quantitative easing on April 23rd.

As widely expected, the Bank of Canada delivered a 50 basis point cut, bringing its overnight rate to 0.50%. With the output gap widening, core inflation having tracked below the 2% target, and financial stress persisting, the Bank had every reason to cut. In particular, lending from Canada's core financial institutions perseveres, but wide spreads and tight credit persist on open markets. Recognizing the scarce room for traditional monetary policy to ease, the Bank explicitly cited the possibly of future credit and quantitative easing and promised a framework in its April Monetary Policy Report. Nonetheless, Canada's monetary policy alone cannot cure unresolved systemic risks that continue to plague international financial mar- kets. The Bank's communiqué focused attention to our in- ternational linkages and the external drivers of Canada's recession, noting the particular challenge from "the nature of the U.S. recession, with very weak auto and housing sectors" and the prerequisite of stabilization in global fi- nancial markets before Canada can rebound. The Bank endorsed timely and worldwide resolution of the paralyzing uncertainties around troubled banks' toxic assets as the lynchpin for a return to financial stability. With U.S. consumers dogged by a steep and ongoing contraction, Canada's export sector has drooped behind. The Bank notes the shock to domestic wealth resulting from protracted and deepening financial instability internationally. Going forward, diminished household wealth will weigh down down domestic consumption,further widening the output gap.The Bank believes that "the output gap will not begin to close until early 2010." The Bank's revised outlook for growth will not be clarified until April, and, as of January, the Bank forecast 3.8% growth for 2010. While this will presumably be revised downward, the Bank's 2010 outlook will likely remain optimistic relative to our projected 1.4% rebound (our Quarterly Economic Forecast will be released March 12). The widening output gap will provide an additional downdraft to core inflation, already having tracked below the Bank's 2% target in January. The Bank's announcements have become increasingly transparent, and this communiqué provided a clear statement of its policy stance, relating that "the overnight rate can be expected to remain at this level or lower until there are clear signs that excess capacity is being taken up." Going forward, facing a widening output gap and disinflationary pressures, we see an increasing tilt towards a further 25 basis point cut. This would place the overnight rate's ultimate floor at 0.25%, and we expect not to see the overnight rate raised until the latter half of 2010. Perhaps most important in the communiqué was the statement that quantitative easing is being explicitly examined. Governor Carney has hinted strongly at the Bank's "considerable flexibility" in his recent remarks. The communiqué brought clarity that the Bank was considering such action down the road, but would establish a well considered policy framework before proceeding. Setting an April release date for a framework provides excellent transparency on Bank thinking, but also signals that, if required, less traditional measures will not likely be undertaken until the spring. Grant Bishop,Economist

A photographer to remember

We made the journey to Ottawa to get new pictures taken for our website and our advertising.
What we didnt expect was to find a wonderful man with so much insight into business and someone who could make a photo shoot so much fun! Paul Couvrette is a nationally renowned photographer and was so much fun to work with! He was able to capture the essence of our team....good friends and even better working partners. Please visit his website . You will be amazed! Thanks, Paul

Sunday, March 1, 2009

The Isaac Foundation

Janet and Susan have committed to donate a portion of their commission to the Isaac Foundation, so when you buy or sell a house through them, you too are helping Isaac. This brave little fellow has touched so many lives as he struggles to live with the dehabilitating symptoms of MPS VI. His enthusiasm for life, his easy smile and his zest for living is an inspiration to everyone who is fortunate enough to meet him. Please visit the website for more information aboud Isaac and his family.

Economic Forecast

Historically low interest rates, stable local economies and increasing affordability should support Canada’s residential real estate market during transitioning period
TORONTO, January 6, 2009 – After experiencing a significant reset in 2008 – a reaction to continuous dire news surrounding the health of the global economy combined with a cooling from the previous years’ fervid activity levels – Canada’s resale real estate market should see only modest price and unit sales corrections take place across the country during 2009. Both national average house prices and the number of homes sold is expected to decline this year, according to the Royal LePage 2009 Market Survey Forecast released today.
Nationally, average house prices are forecast to dip by 3.0 per cent from last year to $295,000, while transactions are projected to fall to 416,000 (–3.5 %) unit sales in 2009. In spite of this cooling trend on a national level, price and activity gains are anticipated in some provinces.
Emotional reaction to recent economic and political instability did much to dampen consumer confidence during the latter part of 2008, causing a marked slowdown in house sales activity. However, as a more rational understanding of the issues gains ground, together with a wide range of announced corrective measures, consumer confidence is anticipated to recover, prompting real estate activity to pick up once again in the latter half of 2009. Further, Canada in 2009 enjoys a stronger economic foundation than most countries and that should temper the housing market correction. The combination of low inflation, reasonable employment levels and improving housing affordability, driven in part by low mortgage rates, are anticipated to stimulate demand in the coming months.
"While Canada's housing market is anticipated to continue to move through a period of adjustment over the next six months, we should expect modestly lower home prices, not a U.S.-style collapse, which was brought on by a structural failure of the entire American credit system," said Phil Soper, president and chief executive of Royal LePage Real Estate Services. "Most consumers are not aware that nationally, Canadian housing market activity peaked in 2007 and has been adjusting lower since. We are well into this inevitable cyclical correction.”
Added Soper: "While a grey cloud hangs over some markets, the sky is not falling. In recent years, Canada has been a difficult place to be a purchaser of real estate, particularly for first-time buyers. When real estate markets correct, inventory levels rise, providing buyers choices instead of frustrating bidding wars. In 2009, appropriately-priced homes will still sell for fair value."
The housing market is expected to perform quite differently from region to region across the country. In many mid-sized cities where home prices remain below the national average, such as Regina and Winnipeg, prices are expected to increase moderately through 2009, as home ownership remains particularly affordable. The most significant price decreases are forecast for Canada’s most expensive city, Vancouver, which has experienced above average price increases for most of the decade. The correction is a natural cyclical reaction to an extended period of high price appreciation. Vancouver’s fundamentals, including growing population figures and the positive economic spinoffs expected from the 2010 Olympics, remain very positive.
Observed Soper: “For several years, Vancouver experienced aggressive price run-ups in response to overwhelming levels of demand – conditions, which eventually reached a tipping point. While buyers will be acquiring properties for less in 2009, it is important to note that prices are coming down from all-time record levels.”
Secondary Ontario markets heavily populated by people working in the manufacturing sectors are also anticipated to experience greater than average declines in house prices and activity levels in 2009. In contrast, real estate in Montreal and Ottawa is poised to remain stable, with average house prices relatively flat through 2009.
After moving through a period of correction that started in 2007, well before other regions in the country, both Calgary and Edmonton’s housing markets are anticipated to return to a growth state later in 2009, characterized by stable average house prices and increased unit sales. Despite slowdowns and delay with some major energy projects, Alberta’s economy remains one of the strongest in Canada.
Looking east, Halifax’s real estate market is expected to experience very modest price appreciation through 2009. After experiencing strong price increases over the last year and a half, the market has hit its capacity for absorbing rising prices and activity levels. The city’s diversified array of industries is expected to bolster the economy and continue to create solid employment opportunities, stabilizing home values.
Canadians have been confused and justifiably skeptical of the efforts of the worlds’ central banks and governments to combat the global economic crisis. There is broad belief, however, that Canada’s financial house is in better shape than many peer countries, particularly the U.S. While the federal and most provincial governments have been slow to implement economic stimulus packages, they enjoy broad public support in principle. Together with the actions taken by the Bank of Canada, the positive impact on consumer confidence stemming from infrastructure spending announcements and other stimulus programs is expected to be significant.
Concluded Soper: “We believe that the Canadian economy will struggle early in 2009, but that conditions will progress continually throughout the year. Improving credit markets, the stimulative impact from a weaker Canadian dollar, together with the implementation of large fiscal stimulus initiatives, set the stage for a return to growth in the second half of 2009.”
Economic Factors Impacting 2009 Forecast
Global Economic WoesNo country is impervious to the current economic woes being felt around the world. The poor performance of the equity markets and the constant stream of pessimistic economic news had a very negative impact on housing activity in Canada in 2008. Consumer confidence is expected to slowly recover during 2009 as the impact of the many corrective actions introduced and announced takes root.
Tempered, but continued growth in emerging economies, particularly China, India and Brazil, should mitigate the downside risk to Canadian commodity exporters.
Foreclosure Figures in CanadaForeclosure rates in Canada are expected to increase, but remain very limited, especially when compared to the U.S. experience, where a broad structural failure of the credit system occurred. Canada’s relatively insignificant subprime market, and in turn, the low number of Canadians contractually committed to very risky mortgages, should result in a foreclosure rate of insufficient volume to impact house prices or transaction activity.
Employment RatesAcross the country, employment rates are expected to erode somewhat in 2009, but remain at long-term healthy levels. Some areas in Ontario, and to a lesser extent Quebec, that have high levels of manufacturing jobs, may experience greater than national average unemployment. Areas in Alberta tied to the energy sector may see short-term employment declines, but the province’s tight overall labour market is expected to mitigate the downside.
Interest RatesThe Bank of Canada’s overnight target-lending rate, already at very low levels, is expected to be reduced again early in 2009. This should bode well for home buyers in 2009 as loosening credit spreads allow banks to offer more aggressively priced mortgages

Friday, February 27, 2009

How will the new Green Energy Act affect you?

Ontario Home sellers face $300 'green' audit
Ontario residents won't be able to sell their houses or condos without first getting a home energy audit which now costs about $300 under the proposed new Green Energy Act. That's one of several measures in the legislation unveiled by Energy Minister George Smitherman to boost incentives for electricity conservation and encourage renewable sources of energy.The legislation was applauded by environmentalists as ambitious, although the David Suzuki Foundation says its green intent is undermined by government plans to build a new nuclear power plant at Darlington.But critics fear the energy audits and Smitherman's estimated 1 per cent rise in household electricity bills as a result of the law will pinch pocketbooks as the recession deepens."It'll be used to beat down the seller of a home," Progressive Conservative MPP and energy critic John Yakabuski warned of the audit, which would put detailed information on a home's energy efficiency into the hands of buyers.Toronto homeowners are already concerned about the impact the city's new land transfer tax in addition to the provincial one is having on sales and prices. Both taxes add up to thousands of dollars even on cheaper houses.As for higher electricity prices, Smitherman promised measures to help low-income families but said anyone thinking prices will fall is mistaken as governments around the world try to curb greenhouse gases that cause global warming."Most people expect that electricity prices will be going up," he told a news conference, adding that there are incentives and government aid under the act to help homeowners improve their energy conservation efforts.While homeowners will have to get a private contractor to do an energy audit before selling, there will be no requirement to take any action the measure is simply intended to inform potential buyers what state of energy efficiency a property is in so they can take action if desired. But New Democrat MPP and energy critic Peter Tabuns (Toronto-Danforth) said the act which will also update the provincial building code to require new buildings to be more efficient and require higher efficiency standards for appliances just doesn't go far enough. What we've seen today is still too timid compared to what we need in Ontario," Tabuns said, citing as an example that Portugal now requires solar systems in new houses. The higher cost on electricity bills and many of the 50,000 jobs that the government claims the act will create over three years will stem initially from a $5 billion investment to improve the electricity transmission and distribution grid. Smitherman's plan is to modernize it so homeowners, for example, can put solar panels on their rooftops and sell any excess power they don't need back into the system at a price yet to be determined, making the grid a "two-way street." Utilities such as Toronto Hydro will undertake that work under ministerial directives to be issued soon, Smitherman said. Government programs, still in the developmental stages, would provide low-interest or no-interest loans to help homeowners pay for the solar, thermal, ground source heat pumps and micro-wind energy systems that will be promoted under the act, which still requires a vote of the Legislature this spring. February 24, 2009-Toronto Star

Wednesday, February 25, 2009

Home renovations....the Government gives back

Home renovations are smart investments in
the long term value of a home and also create
economic activity by increasing the demand for
labour, building materials and other goods. Renovations
can also reduce energy consumption and the long-term
cost of owning a home.
To provide some $3 billion of much-needed fiscal stimulus
and encourage investments in Canada’s housing stock,
Budget 2009 proposes to implement a temporary
Home Renovation Tax Credit (HRTC).
Temporary, Timely and
Targeted Stimulus
The HRTC will apply to eligible home renovation
expenditures for work performed, or goods acquired,
after January 27, 2009 and before February 1, 2010,
pursuant to agreements entered into after January 27, 2009.
The temporary nature of the credit will provide an immediate
incentive for Canadians to undertake new renovations
or accelerate planned projects.
The HRTC can be claimed for renovations and enduring
alterations to a dwelling, or the land on which it sits.
How the HRTC Will Work
The 15-per-cent credit may be claimed on the portion
of eligible expenditures exceeding $1,000, but not more
than $10,000, meaning that the maximum tax credit that
can be received is $1,350.
The Home Renovation
Tax Credit
The credit can be claimed on eligible expenditures incurred
on one or more of an individual’s eligible dwellings.
Properties eligible for the HRTC include houses, cottages
and condominium units that are owned for personal use.
Renovation costs for projects such as finishing a basement
or re-modelling a kitchen will be eligible for the credit,
along with associated expenses such as building permits,
professional services, equipment rentals and
incidental expenses.
Routine repairs and maintenance will not qualify for the
credit. Nor will the cost of purchasing furniture, appliances,
audio-visual electronics or construction equipment.
Who Can Claim the HRTC?
About 4.6 million families in Canada are expected to benefit
from the credit.
Taxpayers can claim the HRTC when filing their
2009 tax return.
Eligibility for the HRTC will be family-based. For the purpose
of the credit, a family is generally considered to consist of
an individual, and where applicable, the individual’s spouse
or common-law partner.
Family members will be able to share the credit.
JANUARY 27, 2009
Examples of the Benefits of the
Home Renovation Tax Credit
The following examples illustrate how
homeowners can benefit from the HRTC
• Sally and Ed are a couple who have recently purchased
a house. In response to the temporary HRTC, they
decide to replace their old windows and improve
the insulation in their home in 2009, instead of
waiting, incurring $10,000 in expenditures. After
taking into account the $1,000 minimum threshold,
a 15-per-cent credit will be available on $9,000 in
eligible expenditures, providing tax relief of $1,350.
•William and Marie are a couple who are planning
to purchase a more energy-efficient furnace for their
home, and build a deck at their cottage sometime
later. To take full advantage of the temporary HRTC,
they decide to do both projects in 2009 rather than
waiting. They pay $5,000 for the furnace and
$3,500 for the deck. They also decide to have the area
around the deck landscaped for $2,500, bringing their
total costs to $11,000 ($5,000 + $3,500 + $2,500).
Marie claims a credit of $1,350 on the maximum
allowable amount of $9,000.
• Karen and Heather are sisters who share ownership
of a condominium unit. They each incur $7,500
in expenditures renovating the kitchen in the condo.
Karen and Heather each claim a $975 credit on
eligible expenditures of $6,500 ($7,500 - $1,000).
How Can I Get More Information?
Additional information on the Home Renovation Tax Credit
will soon be available on Canada Revenue Agency’s website
at (
Information is also available at
Copies of this brochure are available from
the Department of Finance or Service Canada:
Department of Finance Canada
Distribution Centre
Room P-135, West Tower
300 Laurier Avenue West
Ottawa, Ontario K1A 0G5
Phone: 613-995-2855
Fax: 613-996-0518
Service Canada
1-800 O-Canada (1-800-622-6232)
1-800-926-9105 (TTY)
Ce document est également offert en français.
Examples of HRTC Eligible
and Ineligible Expenditures
• Renovating a kitchen, bathroom, or basement
• New carpet or hardwood floors
• Building an addition, deck, fence or retaining wall
• A new furnace or water heater
• Painting the interior or exterior of a house
• Resurfacing a driveway
• Laying new sod
• Furniture and appliances (refrigerator, stove, couch)
• Purchase of tools
• Carpet cleaning
• Maintenance contracts (furnace cleaning, snow
removal, lawn care, pool cleaning, etc.)

Tuesday, February 24, 2009

RetroFoam Insulation - Health Canada Advisory

In the past 18 months, approximately 700 homes in Ontario have been insulated by RetroFoam Canada with a banned formaldehyde-based product. Health Canada's advisory on RetroFoam Insulation provides information for homeowners including a number to call to arrange for Government support to have their air quality tested.