Real Estate Questions and Answers 2012

[bambamvan]

The sale will trigger the reclaiming of CCA; i.e., the CCA you deducted will be added back to income. So if you have a $100,000 home and claimed max CCA (4%) for 1 year and then sold for $120,000 you'd have $4,000 income added to your income tax to reflect the reclaimed CCA, and you'd have $10,000 ($20,000 x 50%) in capital gains added to your income tax.

Claim CCA over many years and the reclaimed CCA on sale can push you to the highest marginal tax rate making it a money losing option if you aren't already in the highest tax rate.

Bottom line: Only the amount above your purchase price is treated as capital gain.

Just to be clear...if I don't claim CCA I add $4000 rental income to my income this year, and am taxed on it. If I claim CCA, I add a $4000 capital gain to my income when I sell the property, so I am only taxed on 50% or $2000? Isn't this a no brainer way to write off the $2000? I also have some old capital losses that I can put against a capital gain, which I couldn't do if it I didn't claim CCA and it was just income.

[Gingercookie]

Just to be clear...if I don't claim CCA I add $4000 rental income to my income this year, and am taxed on it. If I claim CCA, I add a $4000 capital gain to my income when I sell the property, so I am only taxed on 50% or $2000? Isn't this a no brainer way to write off the $2000? I also have some old capital losses that I can put against a capital gain, which I couldn't do if it I didn't claim CCA and it was just income.

Like I said in your other thread, all the CCA that you deducted comes back to you as recapture in the year of sale and taxed as income, not capital gain. Only the portion of proceeds that exceed your original cost is taxed as capital gain. Claiming CCA lowers only the UCC, not the original cost.

[Jungle]

Do you think a realtor's compensation has out pased normal wage increases only because the housing market has balloned?
Is 0.5% compensation fair to sell a Toronto Home valued at $300k?

[nepean19]

No. The costs to do our jobs is not cheap. I do agree that charging 5% when homes sell in 7 days is to much though. I charge 4.25% or 4% if the seller uses me to purchase another home. I also discount to 3-3.5% if I bring my own buyer in.

[Jungle]

WHy does it cost so much to sell a home? What does the broker take?

[sirex]

Forgot to mention that with a triplex you are dealing with more tenants and more leases. Renting is a tricky game the way the landlord- tenant act is set up. As a landlord you don't have much control over your tenants and if you sign a bad tenant you could lose plenty of money if they stop paying and refuse to move out.

For example. Let's say you rent a home out for $2200 a month and you need $1900 to cover your expenses. What will you do if they stop paying rent. It could take you months to get them out. The bank does not care, they want their money. It's a predicament that you should consider because it happens more often than most people believe.

ya, just change the locks on them and shut off their water. see what happens then.

[riz1]

WHy does it cost so much to sell a home? What does the broker take?

brokers typically take between 15% to 30% of the sale price the lower the cut the higher the monthly fees i think remax charges about $475 per month then a portion of the commission thnaks

[polk]

I started looking for homes in the Markham area back in late 2010. A detached 4 bedroom was going for 450-475, I thought it was expensive and figured i should wait. In May, the same homes were going for 510-ish.. end of 2011/now, same homes are going for close to 550 (all in the N11, area). I don't understand how prices go up so high so fast, especially in Markham. I think the appreciation in Markham has been much higher than the other communities.

What is your outlook for property prices in 2012?

A famous magazine (Canadian Business), in their first issue for 2012 predicted a housing market crash. I find that the # of articles on Globe and Mail regarding a bubble has increased over the last few months. 3 CEOs of the large banks indicate the housing prices are too high.

I suppose only god knows what will happen!

Sometimes i Kill myself for not pulling the trigger back in Fall 2010. On the other hand when I read the news regarding a bubble I feel I should just sit on the fence for a while and see what happens =/

[confused]

I started looking for homes in the Markham area back in late 2010. A detached 4 bedroom was going for 450-475, I thought it was expensive and figured i should wait. In May, the same homes were going for 510-ish.. end of 2011/now, same homes are going for close to 550 (all in the N11, area). I don't understand how prices go up so high so fast, especially in Markham. I think the appreciation in Markham has been much higher than the other communities.

What is your outlook for property prices in 2012?

A famous magazine (Canadian Business), in their first issue for 2012 predicted a housing market crash. I find that the # of articles on Globe and Mail regarding a bubble has increased over the last few months. 3 CEOs of the large banks indicate the housing prices are too high.

I suppose only god knows what will happen!

Sometimes i Kill myself for not pulling the trigger back in Fall 2010. On the other hand when I read the news regarding a bubble I feel I should just sit on the fence for a while and see what happens =/

buy in an areas where there is a large population of Chinese and Jewish folks, and your home is almost certainly going to rise faster than the market average

[licenced]

Polk, as you probably know, at present your price range mostly applies to links, semis and townhouses now, but occassionally a 4 bedroom detached will come up in that range even in Markham Village. It depends though what age and upgrades you're looking for.

Here is some statistical information on Markham that's worthwhile keeping on top of for anyone planning on buying or selling. They are examples of a basket of information which my clients find very helpful in determining if and when they should act. These are sourced from TREB's MLS System and while I cannot guarantee their accuracy any variance in numbers should be mininmal.

----------Sales-----------------Active-----------Withdrawn
Jan ’12 155 ...................... 244 ................... 113
Jan ’11 147 ....................... 234 ..................... 74

Feb ’11 212 ...................... 321 ..................... 77
Curr Feb 43 ...................... 266 ..................... 25
Curr Scs 20


Days on market till sold
Jan ’11 68 were over 15 days; 57 over 20; 32 over 30
Jan ‘12 73 were over 15 days; 64 over 20; 51 over 20
Feb ’11 60 were over 15 days; 45 over 20; 29 over 30
Feb TD 23 were over 15 days; 15 over 20; 11 over 30 (includes conditional sales)

What is your outlook for property prices in 2012?

Sometimes i Kill myself for not pulling the trigger back in Fall 2010. On the other hand when I read the news regarding a bubble I feel I should just sit on the fence for a while and see what happens =/

[nepean19]

"WHy does it cost so much to sell a home? What does the broker take?"

I work with a team so right off the bat I give up 50% of my commission. That is if I am given the lead. If it is my own lead it is 70-30 or 80-20. I also pay remax appx $700 month as we are on a 95-5 split.

On top of that you have alot of expenses and dues. Not complaining though I do pretty well.

[nepean19]

"What is your outlook for property prices in 2012? "

I deal mainly with Markham and I expect it to continue to rise in 2012. There are so many articles that I have read from Macleans, The Star etc that have predicted market doom for the past few years and what happens, prices increase.

Until rates increase or something terrible happens that affects buyer confidence we move along strong. You can get a 5 year fixed for 2.99, seems crazy that my parents use to pay 18-21%.

I understand the frustration of buyers, especially 1 st time buyers looking to get into the market. Saving really hard for a year can backfire as home prices may increase 30-40k when you worked hard to save 20k.

At some point you just have to jump in, beats paying rent to a landlord.

[nepean19]

If anyone is looking for sold listings in your area please let me know. I have had a couple of RFD's ask me. Just post and I will send.

Cheers!

[ultra]

If anyone is looking for sold listings in your area please let me know. I have had a couple of RFD's ask me. Just post and I will send.

Cheers!

Hi Nepean, can you post the N5 (richmond hill) list?

[nepean19]

I can only pm to you. I do need info to do this such as style of homes(semi or town or detached) number of bedrooms(3 or 4) and price range(between 400-500 or 500-600 etc)

Otherwise I will have too many results and will be not much use to you.