Using Your RRSPs For A Down Payment On Your New Home

I have come across a lot of people including my clients who are still unclear about the Registered Retirement Savings Plan (RRSP) for the purpose of buying a home. For those of you who are unaware the Revenue Canada calls this program the Home Buyer’s Plan. Not only is this popular with first-time homebuyers, but in my opinion, it is significantly underused.

RRSPs represent one of the only forms of forced savings – so why not use this method to come up with your new home down payment?

What is the First Time Home Buyer’s Plan?
The First-time Home Buyer's Plan (HBP) is a Federal Government initiative providing Canadian citizens the opportunity to withdraw up to $25,000 from personal RRSPs for buying or building a home in Canada. To qualify, applicants must not have directly, or indirectly, owned a residence within the past five years.

Under the HBP, qualifying withdrawals will not be included in annual income, and RRSP issuers will not withhold income tax from these withdrawn amounts. If you are jointly buying or building a home together with your spouse or other qualifying individual, each of you can withdraw up to $25,000. This means that three people buying together can withdraw up to $75,000 (3 X $25,000) collectively.

Are the Withdrawals Taxed?
Withdrawals that meet all of the Revenue Canada HBP conditions are not included in your income and therefore not taxed in the year they are withdrawn. The money that you withdraw has to have been in RRSPs for a minimum of 90 days before it can be withdrawn without tax liability. Through the program, you have the ability to withdraw the amount all at once or through a series of withdrawals not to exceed $25,000.

To withdraw these funds from your RRSPs, you must first have entered into a written agreement to buy or to build. You will also need to confirm that you will occupy the subject property as your personal residence. (Once you take occupancy there is no minimum period of time you are required to live there.)

When do you repay the amount?
Your commitment to the HBP is to repay the amount withdrawn within a 15 year time period. In each year, you will need to make the minimum contributions to your RRSPs equal to 1/15 of the withdrawn funds until the total amount is repaid. You will receive a HBP Statement of Accounts on your annual Notice of Assessment showing you the total HBP withdrawal, the amount you have repaid to date, your HBP balance, and the amount you should repay the following year. Your repayment starts the second year following your withdrawal, and you may repay any amount in excess of the minimum to reduce payments in later years. If you do not repay this amount, then that figure is added to your income for that year. There is no tax liability personally incurred when you make this payment back to your RRSP (at least not from the HBP).

After you move to your new home and start making payments back to your RRSPs, you have to designate the portion that you would like to go towards your HBP payment. Since your earnings will most likely increase as the years go by, it is important to try and pay back the amount you borrowed as quickly as possible. Not only does it give you the potential to get a higher tax deduction for your RRSP contribution but also allows your RRSP dollars to have more years of tax sheltered growth while in your RRSP.

Please keep in mind this is only an overview and do not substitute it for comprehensive tax and financial advice. If you do need further information you could consult a financial professional or I could refer you to one. A more in-depth review of the program can be found on Revenue Canada’s website – www.crc-arc.gc.ca or by calling 1-800-959-2221.

It has been a busy year in the housing market; make sure you make the right decision. Until next time.

Regards,
Zeenia Kola
Sales Representative with Re/Max Realty Specialists Inc., Brokerage
Email: zeenia@zeeniakola.com
Ph: 905-828-3434
Add: 2691 Credit Valley Rd, #101, Mississauga, L5M 7A1
Website: http://www.zeeniakola.com/
Facebook Link

July Sales and Averge Price Up Compared to 2010

The New Market Watch by the Toronto Real Estate Board for the month of July,2011 is out. The good news if you are thinking of selling is that there has been no signs of a slow down this summer, on the contrary, the number of transactions reported by Realtors and average housing prices went up.

Here is the Report for the Month of July:

Toronto, August 4, 2011 — Greater Toronto REALTORS® reported 7,922 transactions through the TorontoMLS® system in July 2011, representing a 23 per cent increase over July 2010. Total sales through the first seven months of this year amounted to 55,863 – down by 1.3 per cent compared to the same period in 2010. After adjusting for seasonal fluctuations, the July figure continued to point to an annual sales result close to 90,000 – in line with results from the previous six months.

"Strong home sales continued in July, with a substantial rebound over last summer’s slow-down brought about by higher mortgage rates, new lending guidelines and misconceptions about the HST. The greatest rebound was seen in the condominium apartment segment in the City of Toronto," said Toronto Real Estate Board President Richard Silver. "If the current pace of sales holds up, we could see the second best year on record under the current TREB market area." The average selling price in July was $459,122 – up by almost ten per cent compared to the July 2010 average of $418,675. “Tight market conditions have boosted the annual rate of price growth this year. However, the listings situation is starting to improve. A better supplied market later this year and into 2012 would lead to a more sustainable rate of price growth,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

If you wish to get a detailed report you could contact me and I would be happy to email it to you.

Regards,
Zeenia Kola
Sales Representative with Re/Max Realty Specialists Inc., Brokerage
Email: zeenia@zeeniakola.com
Ph: 905-828-3434
Add: 2691 Credit Valley Rd, #101, Mississauga, L5M 7A1
Website: http://www.zeeniakola.com/
Facebook Link

TorontoMLS® Sales and Average Price Up in June

Hello All,

Below is the Market Report by the Toronto Real Estate Board for June 2011. The sales of home for the month of June went up by 21% and increase in prices by 9.5% as compared to June 2010.

July 6, 2011 -- Greater Toronto REALTORS® reported 10,230 home sales through the TorontoMLS® system in June 2011 – up 21 per cent compared to June 2010. This number represented the third best June result on record behind 2007 and 2009. The number of transactions during the first six months of 2011 amounted to 48,189 – down by 4.5 per cent compared to the first half of 2010.

"The strong June result capped off an interesting first half of 2011," said Toronto Real Estate Board President Richard Silver. "The pace of sales was a bit sluggish at the beginning of the year, but rebounded in May and June. Because of the positive affordability picture, home buyers remained confident in their ability to purchase and pay for a home over the long term."

The average price for June transactions was $476,371 – a 9.5 per cent increase over June 2010. Through the first six months of the year, the average selling price was $467,169 – almost an eight per cent increase compared to the same period in 2010.

"While sales have been strong, we would be on track for a record number of transactions in 2011 if not for the decline in listings so far this year," said Jason Mercer, the Toronto Real Estate Board's Senior Manager of Market Analysis. "Tight supply meant more competition between home buyers and an accelerating annual rate of price growth in the second quarter."

"Home owners will likely react to the stronger price growth by listing their homes in greater numbers. A better supplied market would result in more moderate price increases," continued Mercer.




Regards,
Zeenia Kola
Sales Representative with Re/Max Realty Specialists Inc., Brokerage
Email: zeenia@zeeniakola.com
Ph: 905-828-3434
Add: 2691 Credit Valley Rd, #101, Mississauga, L5M 7A1
Website: http://www.zeeniakola.com/
Facebook Link

What are you paying for in a Condo Common Element Fees ...

Recently, I sold a Detached Condo Home in Mississauga, and the common question I got was “why am I suppose to pay condo fees”, “what do the common element fees cover,” “where does the money go” “will the fee increase every year” etc. Buyers usually are reluctant to pay the “extra”condo fee. Most of the buyers have misconceptions and misunderstand the concept of paying condo common element fees.

What are Condo Common Element Fees?

Condo fees are each owner’s share of the common expenses of a condominium corporation, it is the costs of maintaining your condominium.

The condominium board prepares a budget for each fiscal year of the corporation. The budget sets out the amount of the estimated common expenses. Each owner’s monthly contribution is determined by multiplying that amount by the owner’s common expense percentage as set out in a schedule to the declaration and dividing by twelve.

Why pay condo common element fees?

The condo common element fees cover a variety of things and without being conclusive, they may include staff (security and concierge), guest suites, recreational facilities such as pools, tennis court, party rooms and saunas, water, hydro, gas, building insurance, snow removal, landscaping,cleaning, maintenance, taxes, property management fees, reserve fund contributions, reserve fund studies, accounting and legal.

Every building is slightly different and the fees will vary depending on age, size and complexity. In order to determine what the fees include the buyer’s agent should the agreement of purchase and sale conditional on status certificate and review the budget and the most recent statements of the condo.

What is Reserve Fund?

A portion of the common element fees you pay is put into a reserve fund for special assessments of the property as is needed, and these monies cover major repairs and upgrades to the building, including items such as roof replacements, re-painting an re-carpeting the hallways, new windows and doors, and re-paving the parking garage. When there is not enough money in the reserve fund to cover these special assessments, the costs are distributed proportionately among the unit owners and are levied for a period of time deemed appropriate by the board or pursuant to a reserve fund study.

As an example, let’s take a $150,000 condo with a $140 monthly condo fee for a first time buyer.

While owning a house you might average a water/sewer bill of $25 per month. With a condo you save $20 per month on homeowners insurance costs compared to a house. That’s $45 saved per month. When you think about the actual costs of maintaining the exterior of a home, landscaping, paving, fertilizer, purchasing a lawnmower, hedge trimmer,etc… Most homeowners would spend more than $95 a month on average. This isn’t even taking into account eventual big ticket items like roof ($5000) and siding($5000) replacement. There is also quite a value to living a low maintenance, care-free lifestyle.

Will the Condo fee increase every year?

It’s best to review the status certificate before purchasing the unit. The status certificate will let you know how much is in the reserve fund and give you an idea of whether there is enough money to cover these costs as they arise. The age of the condo may also aid in assessing whether major repairs will be necessary in the future. In addition, this is an opportunity to discover if a “reserve fund study” was , is or shortly will be conducted, and if known, what increases (if any) to be expected.

Common element fees generally increase yearly at the rate of inflation, however, this is not a set amount and fees could increase by more or less than the rate of inflation depending on what the board deems necessary to operate the building. Fees are set to pay for the proper maintenance of the building and to put money into the reserve fund.

In conclusion, condos are for living pleasure and condo fees protect your investment. The common element fees are an integral part of the condo world and in the same way you need to pay to maintain a freehold home, you pay someone else to take care of your condominium home. Remember, every condominium is different and rates may be set to rise so be careful, take your time and investigate so there are no surprises.

I hope most of your doubts are cleared, if you do have any other questions please feel free to contact me at 905-828-3434 and I will be happy to answer. My goal is to help you achieve in buying and selling residential homes and investments and provide you guidance throughout.

Regards,
Zeenia Kola
Sales Representative with Re/Max Realty Specialists Inc., Brokerage
Email: zeenia@zeeniakola.com
Ph: 905-828-3434
Add: 2691 Credit Valley Rd, #101, Mississauga, L5M 7A1
Website: http://www.zeeniakola.com/
Facebook Link

The Station Condos

Well hello everyone, I know this is a bit out of my usual territory but I couldn't help myself. Recently I heard about "The Station Condos," which is an amazing new development by Brandy Lane Homes. It's set to be built next to the Wilson subway station, on Wilson Avenue right by Allen Road. These exciting new luxury condos offer incredible amenities, beautiful night time vistas of the city, luxury shopping and to top it all off easy access to downtown Toronto and the rest of the GTA. It is located steps away from the The Yorkdale Shopping Center and the surrounding area boasts a plethora of restaurants, shopping, clubs and theatres.

Not only is The Station, as I'm going to refer to it from now on, exceptionally located but let's talk about the other important features.

The units themselves are beautifully laid out and finished in a way that will make you believe you're absolutely filthy rich. Granite counter tops, European inspired kitchens, beautiful wood floors, stainless steel appliances and I'll just stop here because the list is exhaustive. I'll say one thing these condo's truly put the luxury into luxury living.

It really starts once you step out of your condo because things get even more glamorous from there. There's the beautiful two storey Art Deco lobby that's finished beautifully in wood and stone, with a
concierge to welcome you and your guests. The outdoor and indoor patio's where you can enjoy a meal, the seven barbeque areas, the gym, the infinity pool , party room and entertainment room. You'll look glamorous, feel glamorous and be able to entertain people with ease, style and impact. See a pattern emerging here, now do you know why I'm excited about The Station.

That's before I found out about the City of Toronto's, "Avenue Initiative." This is the city's plan to broaden and beautify certain streets and make them more beautiful and grand and evoke the spirit of those beautiful and majestic avenues that you would find in Manhattan. Then you have the plan to extend the University line all the way to York University and into Richmond Hill by 2015. Once these two initiatives are complete you'll see the value of your home skyrocket. Which would matter if you ever wanted to sell, but then why would you, once you move to your other home on the French Riviera you can always let your rich jet setting friends crash at your place and truly impress them.

Anyways to give you an idea of what it'll cost to get your foot in your door and a taste of the good life, you'll basically start at a very reasonable $189,000 and then the sky's the limit from there on.

1 bedroom from $189,900
1 bedroom plus den from $234,900
2 bedroom from $309,900
2 bedroom loft and 2 bedroom plus den from $339,900
2 bedroom plus den loft from $379,900
Penthouses from $649,900

Deposit Structure
$2,500 on signing
balance of 5% - 30 days
5% - 120 days

5% - 180 days
5% on occupancy

Maintenance and Taxes
Maintenance is approximately 45¢ per square foot. Hydro is separately metered.
Taxes are estimated at approximately 0.83% of Purchase Price.

If you're really curious to know more and want more information on The Station Condos on Wilson Subway, contact me, Zeenia Kola at 908-828-3434. Floor plans and complete price lists are available. You know you want to talk to someone who is as excited about this place as you are.

Regards,
Zeenia Kola
Sales Representative with Re/Max Realty Specialists Inc., Brokerage
Email: zeenia@zeeniakola.com
Ph: 905-828-3434
Add: 2691 Credit Valley Rd, #101, Mississauga, L5M 7A1
Website: http://www.zeeniakola.com/
Facebook Link

Buying New Home Vs. Buying Resale Home

VS.

Last weekend I had a lovely couple walk into an Open House that I was holding. After showing them around we got to talking and one of the questions that came up was whether they should buy a new home from a builder or a resale home. I explained to them there are advantages and disadvantages to whichever path they decide to go down. At the end of the day they had to decide what kind of a home they wanted and what was important to them.

Advantages of a New Construction Home:
•Personalized choices. One of the main advantages of a brand new home is that you can decorate it the way you want. You can pick your own paint, flooring (hardwood, carpet or laminate)and type of appliances.
• Up-to-date with the latest codes/standards. Your new home will be built to the latest building codes, electrical and energy-efficiency standards which is worth the peace of mind in the long run .
•Maintenance costs. Maintenance costs are much lower for the first few years because everything is new and many items are covered by the builder's warranty.



Disadvantages of a New Construction Home:
• Ongoing Construction. One of the downsides of moving into a new development is that they're usually still under construction after you've moved in and the continued construction can still be a bit of a headache for new homeowners.
•Extra Costs. You may have to pay extra for lawn care, fencing, pave your driveway once you have moved in. You may also have to spend additional money for appliances, curtains, drapes, central vacuum, humidifiers, decks, electric garage door openers, finishing the basement, walkways, outdoor lighting, indoor light fixtures, trees, shrubs, gardens and landscaping, children's play sets, swimming pool, air conditioning, etc. You want to make sure what is included in the purchase price.
•Taxes. with the purchase of new homes the buyer has to pay HST, and additional costs such as the New Home Warranty Program, tree planting costs, utility connection fees and paving of the driveway.
•Blueprint. Many builders do not have all the model homes, hence the purchaser does not get to see the exact layout of the home and even then the final layout of your new house may not be the way they same as the one promised by the blueprint.

Advantages of a Resale Home:
•Established Neighbourhood. There is no ongoing construction in the neighbourhood and the area is well established with schools, malls, grocery stores. The lawn is green, shrubs are growing, driveway is paved and trees planted. Often, most extras are already present, such as appliances, curtains, drapes, central vacuum, humidifiers, decks, fencing, electric garage door openers, finishing the basement, walkways, outdoor lighting, indoor light fixtures, trees, shrubs, gardens and landscaping, children's play sets, swimming pool, air conditioning, etc. You also get to know who your neighbour is in a resale home which you can’t in a new home.
•Taxes. HST is already included in the purchase price, hence there is no extra tax during the purchase of the home.
•Size. A resale home will often offer significantly larger lots.
•Negotiability. There is room for price negotiating with the seller as compared to the builder’s almost firm price list.


Disadvantages of a Resale Home:
•Possible redecorating and renovations. Some homes need attention and need to be redecorated, renovated and require major repairs such as replacing the roof, windows, doors, air conditioning, furnace, fireplace, appliances etc.


As you can see there are many advantages and disadvantages for both new homes and resale homes. Whether you choose to buy a new or a resale home, take your time and consider all the facts. And remember - any home you purchase will be new to you.

If you have any questions or concerns please feel free to contact me.

Regards,
Zeenia Kola
Sales Representative with Re/Max Realty Specialists Inc., Brokerage
Email: zeenia@zeeniakola.com
Ph: 905-828-3434
Add: 2691 Credit Valley Rd, #101, Mississauga, L5M 7A1
Website: http://www.zeeniakola.com/
Facebook Link

1206 Knight Trail, Milton, Ontario

Open House Sunday -12th June, 2011 from 2:00p.m. to 4:00 p.m.

1206 KNIGHT TRAIL, MILTON,ONTARIO

Gorgeous Dream Home In Most Desirable Main St. Village.Open Concept,Clean & Bright Home On A Child Safe,Premium Lot With Undisturbed Views Of Knight Trail Park. It Boasts Custom Concrete Curbs,Porch Leading Into A Spacious Foyer.Beautiful Hardwood Floors,Chef's Eat-In Kit With Walk Out To Deck. Second Level Family Room With Soaring 18Ft Ceilings, Walk Out To Balcony With Good View Of Park.Plenty Of Bright Windows In All Rooms.Professionally Finished Basement With Plenty Of Storage Space.

Walking Distance To Schools. Located Close To Hwy 401, Go Station, Splash Pad, New Art Centre & Shopping.

Too Many Upgrades To List!!

For more information give me a call.

Regards,
Zeenia Kola
Sales Representative with Re/Max Realty Specialists Inc., Brokerage
Email: zeenia@zeeniakola.com
Ph: 905-828-3434
Add: 2691 Credit Valley Rd, #101, Mississauga, L5M 7A1
Website: http://www.zeeniakola.com/
Facebook Link