• I N V E S T   •   D E V E L O P   •   R E T I R E

Monthly Archives :

February 2019

First Time Home Buyers Guide

150 150 Zoie Conforti

Lets talk Mortgage-

These are the questions your should be asking yourself:

How much can you afford based on your income or joint income with your spouse.  What are the steps involved in getting a pre-approval mortgage, and how long is it valid for? What are the different types of mortgages available for first-time buyers? How to shop for the best rates…. When you buy your first home with me I will walk you through step by step in achieving the best mortgage suitable for you.

 

What are the Costs and Benefits:

When buying a home what are the costs involved and what are the tax benefits for 1st time buyers?

 

Finally House Hunting

When is the best time to shop for your first home, what will be the homes suitable in your budget. Here I tend to set realistic goals for my clients so your protected in the long haul. Call me today to get started!

HST Rebate For Investment Properties: How does this work? What is the process involved? Are you qualified?

150 150 Zoie Conforti

Have you ever heard of prices include HST when purchasing a pre-construction condo? Let me shed some light on this topic as it involves two different actions from investors and end users. HST in Ontario is 13% and this is broken down to 2 Sectors, 1- the non-refundable portion ( 5.2%)  and 2- the rebatable (7.8%) this is calculated on the NET purchase price. How is this calculated? Net Purchase Price= PP- Non-rebatable portion of HST. Usually the net purchase price is calculated using a set of formulas from the CRA depending on the range of Purchase Price. If a new house or condo is priced under $350,000, you’re eligible to receive a maximum of $30,000 back (36% rebate on the GST portion and 75% on PST). Between $350,000 and $450,000 a sliding scale applies.  For properties costing more than $450,000, a maximum rebate of $24,000 can be received.

 

Example: Purchase Price $600,000

Net Purchase Price = ($600,000+ $24,000) /1.13 (CRA Formula) = $ 552,212.40

Total HST= Net Purchase Price * 13% = $71,787.61

Non Rebatable Portion of HST= Purchase Price – Net Purchase Price= $47,787.60

Rebatable Portion of HST= Total HST- Non-Rebatable Portion of HST= $24,000

What this essentially means is when we purchase a new Home or Condo of $600,000 from a builder the purchase price already has the HST included, in this case $ 47,787.60 was already included in the price. This is the non rebatable portion.

Are you qualified to claim this rebate?

As an end-user who lives in the condo as a primary residence. The builder will claim the rebatebale portion from the government. Essentially the developer will take care of the HST for you upon closing. You pay the purchase price and the builder will take care of the HST.

Now as an Investor Stand point, who is renting out the unit for a minimum of 1 year– in this scenario the investor would have to pre-pay the rebatable portion of the HST on final closing and then file a HST rebate application to the CRA to claim back. Usually you can expect to get the full amount back, however if the market value of your home or condo is much higher then the price you paid you can expect a few thousand less in rebate. This is a good thing, means your investment has gone up in equity. This can take about 6-8 weeks to receive. There are a few documents you need for this process where I would be more than happy to facilitate.

 

There is time limit to file your HST rebate- 2 years from final closing.

Finally what is the point of this rebate process?- The purpose is to discourage Flippers. I also strongly believe that a wise investment on any pre-construction property should be longer than final closing or during assignment phase.

 

Drop me an email if you have any further questions!