TRENTON HOME SALES TAX aka HST

As promised in my last posting, I am here to give my "biased" opinion on the upcoming provincial Harmonized Sales Tax. In case you’ve been busy canvassing for your local provincial Liberal candidate and haven't been paying attention to other real-time events, the HST is being touted as a cost-saving initiative for business owners and a “revenue neutral" tax for the benefit of all Ontarians. If you’ve bought into this party line, you may also be interested in a piece of ‘environmentally protected almost waterfront property’ - insert smile here.

Seriously, from where I’m sitting, this tax appears to be similar to the largest tax grab in Canadian history … yes, the GST all over again. In other words, a provincial consumer tax! Hopefully it will be more effective than the eHealth tax. You remember the one … that temporary tax that helped fund huge salaries for officials, some of who were forced to resign for incompetence. This time the Queen’s Park Highwaymen are going to rob you by applying tax on items that were never taxed at the provincial level before. These include home heating fuel, legal services, real estate services, home inspections, well driller reports, amongst many additional services that will affect homeowners and other consumers!

With this in mind, is it any wonder that websites such as http://www.stophst.com/ontario-hst/ have been stood up and organizations, including the Ontario Real Estate Association and the Ontario Home Builders Association, have lobbied for months to have the tax stopped, revised, or delayed? Unfortunately, the estimated $313 million in EXTRA tax dollars lifted from Ontarians through resale home transactions looks like it will come to fruition in July of this year. The timing will undoubtedly coincide with an increase in mortgage financing which will certainly put a damper on the value of your most prized asset … presumably your house.

On the bright side, our ‘tax and spend’ officials have given new home construction a ‘break’. It seems that new homes under $400K will get a rebate on the HST. In other words, pay the tax and then apply for the ‘luxury rebate’. Yet another paper chase that will involve employing more government employees to make it all happen. We have trouble maintaining adequate health care services in this province, but we have no trouble employing more tax collectors and redundant procedures.

Before I end my rant, I have to pay homage to all the 'Timmy Regulars’ whose cry was heard on high. That is, food or beverages below $4.00 will NOT be taxed. Can you imagine the outrage if Dual Tone McGuinty had followed through and added another 8% on our morning fix? Tax on Timmy’s seems unconstitutional at any level of government, but tax on basic shelter seems to be unending and applicable at all levels. Hopefully, I stop seeing red after the 2011 election.

If you would like more information about how the HST will affect you, please drop me a line at david@davidweir.com.

TRENTON REAL ESTATE 2010

The dust has finally settled on the local 2009 Real Estate statistics and what a finish we had to the year! Here are some numbers provided by the Quinte & District Real Estate Board that will make homeowners happy about their largest investment.

In December 2009, the total dollar volume of sales (for all property types) increased by an amazing 98% over December 2008 i.e, $34.8 million vs $17.5 million respectively. This represented 182 sales last month compared to only 106 in December 2008.

Unfortunately, there are other statistics that may turn that homeowner smile upside down. There were 25% more residential listings on the market last month compared to December 2008. In other words, more competition if you are thinking of selling. As well, the average annual residential sale price was down 1% from 2008.

I could talk endlessly about statistics, but we all know that figures lie and liars figure. So what should homeowners do if they are thinking of selling this year? Sadly, Santa didn’t bring me a crystal ball for Christmas so here is my best guess for 2010.

If possible, you might think about listing early to try and be sold before July 2010 when the Harmonized Sales Tax (HST) takes affect and before mortgage interest rates begin to increase.

I’ll discuss the dreaded Horrible Sales Tax and how it impacts Real Estate sales on another occasion but, suffice it to say, this tax will steal hundreds of millions of dollars from the pockets of Ontarians who buy and sell Real Estate beyond 30 June 2010. I concede that the government’s plan to implement this unprecedented tax is not final, but we all know it’s coming despite massive lobbying efforts by groups such as the Ontario Home Builders Association and the Ontario Real Estate Association.

As for mortgage rates, the Bank of Canada has kept their overnight rate at an amazing .25% for a number of months, which, in turn, has allowed Lenders to hold prime at about 2.25%. However, there have been consistent comments from Canadian Banking authorities that suggest our “interest holiday” is going to come to an end mid-2010 or by the third quarter of the year at the latest.

Many Buyers who were keeping abreast of these two significant issues have wisely purchased a home recently or plan to do so before July. If you doubt the numbers provided by our local Real Estate board, just check out the hot markets of Toronto and Ottawa.

In conclusion, it might be that the strong 2009 year-end was a function of Buyers who jumped off the fence early, when they ordinarily would have waited to buy in 2010. Moreover, we might also want to consider that a strong start to the year may be followed by a stagnant second half to 2010, especially in view of the HST and mortgage interest scenarios discussed above.

Are you selling your most valuable asset in 2010? If so, list early and be prepared to move before 1 July 2010. Is your mortgage up for renewal or are you not yet locked into a fixed rate? If so, talk to your Lender about your long-term options. Oh, and by the way, I am looking for a crystal ball – preferably one in HD.

Proud to Be Canadian!

I usually discuss Real Estate topics in my blog but, in this, my last post of 2009, I would like to mention one of the most exciting things I have ever done. On Tuesday December 15th 2009, I was honoured to have carried the Olympic Torch through part of downtown Trenton.

With 18 other runners, I started at CFB Trenton and ran my 300 metre leg not far from my Royal LePage office. The streets were lined with children chanting "Go Canada Go", as well as other onlookers of all ages who were beaming and wildly waving Canada flags. It was estimated that the crowd totalled 3,000 people; amazing for a town with a population of 16,000.

The size of the crowd, the excitement, and the children who wanted their pictures taken with a 'torch bearer' was truly thrilling and an event I will never forget. Go Canada Go!

Still Riding the Trenton Real Estate Roller Coaster!

The Trenton Real Estate roller coaster ride continues! One minute things are looking up with the announcement of CFB Trenton’s upcoming multi-million dollar infrastructure expenditures and then we learn of yet another series of layoffs at Invar, a manufacturing company just north of Trenton.

In June 2010, 134 Invar employees will lose their jobs. When combined with the job losses at General Mills in 2007 and Pepsico in 2008, a total of 850 positions will have gone by the wayside over the past three years … a considerable number for a town of our size.

While the expansion at the Base is excellent news, we have to keep in mind that it isn’t bringing any permanent jobs to the area right away. However, the influx of 500 – 600 military families in 2011 should provide a greater demand for homes and should help re-energize the local economy!

FREE Saturday Matinee at the Empire

Your Customer Appreciation Day has been announced! Team David Weir is inviting you to join us for a complimentary family movie at the Empire Theatre on Saturday, 23 January 2010. We have purchased tickets for the 2:00 PM showing so be sure to mark your calendars early! The movie, popcorn and a drink are all on David! Stay tuned for the name of our Feature Presentation and for details on how to move to the front of the line for tickets. Until then, don't forget ... we're never too busy to help your friends and family with their real estate needs as well! Visit the 'Giveaway' page at http://www.davidweir.com/ for other 'freebies'. Cheers everyone!

Home Energy Audits

When you mention an 'audit' to Canadian taxpayers, there's a good chance the associated thought will be a negative one. However, the federal and provincial governments are now trying to put a positive spin on another type of audit; that is, a Home Energy Audit.

A Home Energy Audit shows how your home uses energy and where it is being wasted. It identifies improvements you can make to your home’s heating, cooling, and hot water heating systems. It also pinpoints other inefficiencies that COULD result in hundreds of lost dollars each year.

Given that everyone wants to save money and that protection of the planet is at an all-time high, why would you not want to reduce your energy bills and help the environment at the same time?

A typical audit comprises of 3 things: 1. an assessment of your home’s insulation, heating and cooling systems, as well as other energy uses. 2. a depressurization test to identify leaks and drafts in your home. 3. an Energy Efficiency Evaluation Report.

The cost of the audit runs about $300 -500 and Ontarians can get up to $150 of the energy audit cost back from the provincial government. The actual testing of your home takes 2 to 3 hours.

Energy-saving upgrades identified by your Home Energy Audit may qualify you for rebates under the Home Energy Retrofit Program. You could receive up to a maximum of $10,000 from the Governments of Ontario and Canada when you complete improvements identified by your audit. In addition to receiving monies back for energy savings upgrades, some of your improvements may also qualify for additional savings through the Home Renovation Tax Credit.
Is there something wrong with this Home Energy Audit picture? When the Ontario government floated this idea, they wanted to make the audits mandatory through legislation labeled the 'Green Energy Act'. Of course, making it mandatory would require that everyone go through the process at some point … and pay accordingly.

As it stands today, the government has decided the onus will fall on home sellers to initiate a home energy audit when they put their home on the market for sale. In other words, if this legislation is passed and you want to sell your home, you would need to have this audit completed – unless the buyers waive their right to have an audit done. Once again, the government mandates and the taxpayer pays!

You, like I, want to help the environment and, of course, we all want to reduce our energy bills so maybe we are okay with the mandatory energy test. However, I think that during the home sale process this audit, or lack thereof, could be yet another important variable in the marketability of your home, especially in a competitive market. Furthermore, the Home Energy Audit could become a bargaining chip during negotiations, or perhaps even a hindrance if you don’t have the report completed prior to listing.

I will discuss more of these issues in the next installment of my column. In the meantime, feel free to get internet links to the three government websites that outline home energy and renovation tax credits. Go to www.davidweir.com.

Shopping for Insurance?

If you're soon to be in the market for home or auto insurance and want to make sure you're getting the most bang for your buck, check out this option. It allows you to compare different types of insurance with various companies based on your postal code. How efficient is that? No going through a long automated telephone procedure, no long conversations, and all from the comfort of your own home. The company is Kanetix. Let me know what you think once you've given it a try!