Five ways to conquer Toronto’s sizzling housing market

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Published on: March 27, 2017

In Toronto’s sizzling housing market, shelling out for a home is one of the scariest life choices people can make. After you’ve saved up enough for a down payment, been pre-approved for a mortgage and endlessly scoured the housing listings in your preferred neighbourhood, you might just get lucky and eek out some feisty couple in a bidding war to score your dream home. Then, of course, you’re saddled with debt, and financially on the hook for everything from a leaky faucet to a faulty furnace.

When every penny matters, it’s important to take full advantage of all possible tax breaks. TurboTax can help you identify savings, whether through a government reduction (like if you’re a first-time buyer) or rental property deduction (landlords can claim a ton of expenses). It even has a totally free service that’s ideal for Torontonians who prefer to do their taxes on their own, but could still use some helpful advice. Here’s a handful of tips on making the most of the biggest purchase of your life.

1. If you’re a first-time buyer, you’re most likely eligible for the First-Time Homebuyer Credit, a non-refundable credit that rewards people for jumping into the market by reducing the overall amount of taxes owed. The total claim amount is up to $750, and is calculated based on a percentage of $5,000. Basically all purchased homes qualify, including any semi-detached house, single-family home, condo, apartment or even mobile home. Even if you buy a property with a few friends, a spouse or family members, you can share the claim with co-owners—but it can’t exceed $5,000.

2. Aside from a few exceptions, new or extensively renovated homes are subject to 13 per cent HST in Toronto. But, thankfully, anyone who buys a new house for under $450,000 (or, more realistically in Toronto, a condo) can claim the HST new housing rebate. The rebate is available if you bought a new home from a builder or did extensive renovations on your primary residence, and is designed to offset any HST you may have to pay (for things like real estate commission or builder fees, for instance). The maximum rebate in Ontario is $24,000, and there are also a few other deductions available for homes built by the owner.

3. Good news for serious retirement savers. To help with the huge financial cost of buying or building your first home, the Home Buyers’ Plan lets you withdraw up to $25,000 from your RRSP. Simply fill out this form to take out the funds.

4. Those who have to make their home safe and comfortable for seniors or disabled people might be eligible for the home-accessibility tax credit that was introduced federally in 2016. This credit is designed to cover renovation expenses for things like wheelchair ramps, handrails and walk-in tubs. If you’re supporting someone who falls into the senior or disabled category (like a grandmother, for instance), you can claim up to $10,000 in expenses.

5. For those who work from home, buying a house can be significantly easier (as if zero commuting time and working in your PJs wasn’t enough of a draw). There are a number of expenses freelancers or contractors can claim, including heating and electricity bills, home insurance and cleaning materials. Similarly, landlords get a ton of tax breaks. Even if you rent out a portion of your house (like a basement unit), you can claim expenses like advertising for a tenant, insurance and interest on money you borrow to improve the property.

Article source: http://torontolife.com/real-estate/toronto-housing-market-tax-breaks/

Condo of the Week: $5 million for a house-like condo in the middle of Yorkville

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Published on: March 24, 2017

Address: 36 Hazelton Avenue, Unit 2A
Neighbourhood: Yorkville
Agent: Alex Brott, Brott Hadden Division, SAGE Real Estate Ltd.
Price: $4,950,000

The place

A luxurious two-bedroom with a wide layout that makes it look and feel like a house, rather than a condo. The entrance is through a private elevator, and the dining room and kitchen are open to the bright and spacious living room one level below.

Here’s the living area:

A closer look at the dining area:

Plenty of space for ping pong in this living room:

The kitchen:

The master bedroom:

YouTube viewers may recognize this closet. It belongs to Kai Bent-Lee, one of Susur Lee’s sons. Kai doesn’t actually own this condo, though. The property is titled in the name of Bruce Bent, whom the National Post once identified as Susur’s wife’s brother.

And here’s the master ensuite:

The den. What, you don’t have a chair for your guitar?

And the second bedroom:

The history

The building was completed in 2015 on the site of a former Catholic school. The Gothic-style facade, from 1928, was dismantled brick by brick and then re-incorporated into a seven-storey glass and zinc structure. The owner listed the property last summer at $5.5 million, but it didn’t sell.

Big selling point

This building is arguably among the most exclusive addresses in Yorkville. Actor Mark Wahlberg, a regular at TIFF, was reportedly among the early buyers, although it’s unclear whether he ever actually closed on a unit or moved in. Either way, the building has rare amenities, like a billiards room and a wine cellar with private lockers.

Possible deal breaker

The balcony is on the second level and close to a brick wall, so there isn’t much of a view. The plus side of that is privacy. (For example, should Marky Mark drop his pants, the owner is unlikely to see it.)

By the numbers

• $4,950,000
• 2,700 square feet, approximately
• $4,695 in monthly maintenance fees
• 3 bathrooms
• 2 bedrooms
• 2 parking spaces
• 1 balcony
• 1 den
• 1 storage locker
• 1 private elevator
• 1 master walk-in closet

Article source: http://torontolife.com/real-estate/condos/toronto-condo-for-sale-36-hazelton-avenue/

“It should be somewhere else”: Why waterfront residents want to put the kibosh on Charles Khabouth’s liquor license

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Published on: March 24, 2017

Nothing gets waterfront denizens quite as riled up as the threat of noise reverberating across the surface of the lake. A decade ago, residents lobbied successfully to put a damper on the Docks, an outdoor music venue whose booming bass rattled nerves and windowpanes. Now, a business partnership led by nightclub king Charles Khabouth is trying to bring the party back. Khabouth’s company, Powerhouse Corp., has applied for a new liquor license for the former Docks site, now home to the Rebel nightclub and Cabana Pool Bar. The new license would give Khabouth and his group more latitude to host events. They’d be permitted for up to approximately 15,000 partiers—about half of them indoors, half of them outdoors—though Powerhouse’s lawyer has said that his clients have no intention of holding events that large. Powerhouse is also trying to do away with some strict license conditions that limit outdoor concerts and noise levels.

Powerhouse’s liquor license application was up for debate this week at the License Appeal Tribunal, a provincial panel that adjudicates these types of disputes. (The proceedings will continue next week.) Who shows up at 9 a.m. on a weekday to put the screws to a nightclub owner, and why are they so concerned? We found out:

Ulla Colgrass

78, author, waterfront resident

Why are you against the club’s license?
“I’ve followed this site for many years, starting when it was the Docks. It’s very large and very noisy. I just heard someone saying that they heard the Rebel until 9 a.m. from the Islands. Soon there will be thousands of people living and working close to the club. It should be somewhere else.”

Well, where should clubs go, then?
“It could be in Downsview, or in Scarborough. Scarborough always says they don’t have enough entertainment. Move it there.”

Lynn Robinson

“Old enough to have spare time to represent the community,” Retired analyst, 47-year resident of the Toronto Islands

Why are you against the club’s license?
“I think that having a huge nightclub on the edge on the harbour is a bad idea for anyone who lives or visits there. It’s an extremely sensitive soundscape. Anyone who participates in entertainment or is a source of music on the harbour simply has to be a good neighbour, and sound has to be carefully managed and mitigated there, because it can dominate everything that everybody else does. This particular place has great potential to dominate the harbour.”

Well, where should clubs go, then?
“Well, that’s a wonderful question, and I don’t have an answer. If you put 7,500 people outside in Toronto, it’s very hard to figure out how to mitigate that noise so that it doesn’t drive residents crazy. This is a Toronto-wide question and we don’t have an answer yet. But absolutely, for sure, not on the water.”

Cathy Macdonald

75, Federation of North Toronto Residents Associations representative

Why are you against the club’s license?
“We’re objecting to this proposal. Our members are representative of people who come to the harbour area for recreational activities. I’m also a member of the Royal Canadian Yacht Club and have a boat on the waterfront. Many of our residents stay on their boats overnight. We feel that noise levels from this club will seriously interfere with their enjoyment of the activities they come to the waterfront for.”

Well, where should clubs go, then?
“It needs to be accessible by public transit. The SkyDome and the ACC have huge numbers of people going there, but they have excellent public transit and that makes it work.”

Ron Jenkins

58, marketer from Mississauga

Why are you against the club’s license?
“I’m a boater. I sail on boats from clubs here in Toronto. My objection is primarily a noise objection, although as a boater I’ve seen lots of fast powerboats docking along the club’s break wall, and I think there is a concern too about alcohol use on the water.”

Well, where should clubs go, then?
“I think maybe you’d have to divide it into two types of club. An indoor club of that size could be located anywhere with access to transit, but as an outdoor facility on an ongoing basis, I think you’d have to locate it away from other incompatible uses.”

Jane Robinson

65, retired IT professional and representative of the Gooderham and Worts Neighbourhood Association, from the Distillery District

Why are you against the club’s license?
“I’m not happy, not happy at all. It’s too big, it’s going to cause a lot of problems with traffic. We’ve got two new towers in the area, and they’ve had some issues in the past—noise issues with the bass.”

Well, where should clubs go, then?
“My only thought is Downsview. I’m not sure. I heard someone else say Scarborough, but Scarborough doesn’t have the transit, so I think that since Downsview has the access, it would be more appropriate.”

Mary Hellen Spence

Retired executive and representative of the Toronto Noise Coalition, from midtown

Why are you against the club’s license?
“The application is for a venue for 15,000 people. The city of Toronto is attempting to bring residents to live downtown and enjoy the waterfront, so I think this one-purpose use is going to come into conflict with that goal. It’s just too big for where it’s located.”

Well, where should clubs go, then?
“I think that’s a planning issue. The city is developing a secondary plan for downtown. This is the kind of issue they should be dealing with.”

Cristina Panneton

57, retired finance worker from Hoggs Hollow

Why are you against the club’s license?
“When I saw this nightclub proposal, initially I thought, ‘Why would I care? I live in Hoggs Hollow.’ Well, if you look at the pattern of these places, similar to condo towers, they’ve been migrating north, and the logistics tell me that whole patterns of social behaviour will start to migrate north. We’re worried that we’re going to start getting these nightclubs in our area. I think these people need to be watched. I think there’s an underbelly of crime and a lot of other things going on.”

Well, where should clubs go, then?
“Well, I think we have places like Ontario Place that are already established.”

Kate Shepherd

61, event coordinator from the Toronto Islands

Why are you against the club’s license?
“I was part of the first big hearing about the Docks nightclub, more than ten years ago. It had a huge impact on my family life and my actual house. I’m strongly convinced it’s not the owner; it’s the location. This is all about noise and water.”

Well, where should clubs go, then?
“I have three kids, all under 25. They like music. I love music, but I don’t believe in huge things. I think small venues work. I don’t think it’s necessary to have a huge venue. I think crime rates go up, drug abuse goes up. I think it’s taxing on the city and services like police and fire.”

Article source: http://torontolife.com/real-estate/somewhere-else-waterfront-residents-want-put-kibosh-charles-khabouths-liquor-license/

Q&A: Josh Gordon, the researcher who blames buyers for rising home prices in Toronto

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Published on: March 24, 2017

Josh Gordon

Josh Gordon, an assistant professor at Simon Fraser University’s School of Public Policy, spends much of his time researching the Canadian housing market. He doesn’t like what he sees. In a recent policy paper, he argues that Toronto’s rapidly increasing housing prices are being driven not by a lack of available housing, but rather by overwhelming, scorching-hot demand, as buyers race to acquire property before it’s no longer affordable. If he’s right, that means Toronto’s real estate market is being held aloft by buyer optimism, rather than genuine scarcity, leaving it vulnerable to a sudden downturn. We spoke with Gordon about the dangers of investing in Toronto housing, and what politicians can do in order to bring prices back to earth.

For those of us who never took Econ 101, can you just briefly explain what we mean when we talk about supply and demand in the housing market?
There are a couple ways of thinking about that. The most typical is this idea of, “Are we building enough?” But the other big concept is what’s known as “supply elasticity,” which is essentially a measure of how easy it is to build new units of housing. When it’s expensive to build homes—either because of geographic constraints like water and mountains, or zoning restrictions, or regulations of one sort or another—we say that a housing market is inelastically supplied. The literature is quite clear that elasticity has some impact on prices, but it’s not nearly sufficient to get to the kinds of prices that we see in Toronto.

What does the media get wrong about the housing markets in Toronto and Vancouver?
Most reporters speak to people from the real estate industry—who, in most cases, have a vested interest in presenting a certain view of the market. This is a big problem, because real estate agents claim that Toronto has a housing supply problem as a way of making price increases seem inevitable, when in fact it’s a demand problem. It’s like people disagreeing about the shape of the earth.

So you’re comparing realtors who argue that Toronto has a housing shortage to flat-earthers? Is the evidence really that compelling?
Yes, yes, yes. Let’s put it this way. The banks are aware of this issue, and they’re concerned. They have a fair bit of money on the line when it comes to getting the diagnosis right. And they are very clearly saying that this is about extremely strong demand. They have slightly varying takes on what’s driving it—whether it’s speculation, whether it’s foreign money, whether it’s interest rates or whatever—but very few of them are suggesting that it’s largely about supply.

Realtors are always complaining that there aren’t enough listings to go around. Isn’t that hard evidence of a lack of supply?
Only in a very narrow, misleading sense. For a long period of time, new listings in Toronto were fairly steady. What has been drawing down active listings is that in the past three years or so there has been a huge spike in sales. Last year was a record year in terms of sales. That spike has taken a bunch of the inventory off the market, which tends to push up prices. Once prices start to rise, people think, “Wait a second. Maybe prices are going to continue to go up.” As a result, a lot of people are now holding off listing their properties, because they think that prices are going to continue to escalate. And so you have this self-reinforcing dynamic. It’s demand-induced scarcity, and it’s extremely powerful.

How exactly does demand for housing get so out of control?
I believe that public authorities have underestimated the role of foreign capital. The key thing is that it’s not all about the citizenship of the buyer. It’s about where the money was accumulated. There is a ton of money that is flowing into the Toronto market from overseas, both through foreign buyers, and through people who are now permanent residents or citizens, who have access to capital from overseas. The market surged in 2015 and 2016 because you had people moving money out of China. That spurred a spike in purchasing from overseas, which drove sales up. As soon as prices start to increase, you get the local buyers jumping on the bandwagon, because they’re fearful that prices are always going to go up. That creates these scorching demand conditions.

TREB has released data suggesting that the number of foreign buyers is very low. Why believe you instead of them?
Realtors have resisted efforts to get the government to collect data about this. In Vancouver, realtors said foreign buyers were five per cent of the market. When the government went out and collected the data, it was closer to 13 per cent of buyers. So we have seen that realtors are not exactly being open and candid when it comes to their estimates of foreign buyers.

What do you think would happen to the Toronto market if we had accurate data about foreign buyers?
People would not ignore it. I think that’s another one of the lessons from Vancouver. In the five-week period when the BC government was collecting foreign buyer data, over a billion dollars was spent on Vancouver real estate by foreign citizens. The pressure mounted pretty quickly on the government to address that, especially in the context of a housing crisis. People don’t ignore it. That, in my view, is part of the reason the Ontario government has delayed collecting data for so long. If this was a government that was serious about tackling this problem, they would have been gathering data a long, long time ago.

In your paper, you talk about a couple possible policy solutions, but it seems like the one you like the best is the idea of a property surtax. Can you explain what that is?
The basic idea is to have an annual property surtax that applies on properties over a certain threshold in value—something like $800,000, or $500,000, or $1 million, depending on what policymakers choose. And the surtax would only apply to value above that threshold.

The main thing is that you can refund the amount of surtax that is owed based upon income taxes that have been paid. And so that means people who are working locally and paying Canadian income taxes on a consistent basis are going to be exempt from the tax, while those who own property on the basis of foreign income or wealth will be hit by it. That reconnects the housing market to the local labour market. And that would be extremely powerful. The surtax acts as a filter. It doesn’t affect the kind of money that you would want invested in the real estate market, and it discourages the kind of money that you wouldn’t want. It also would tend to discourage speculation.

So it’s a less blunt instrument than a blanket tax on foreign investment. You’re not catching foreigners who are actually working here and paying taxes.
Yes. It’s also more comprehensive. A large issue is not citizenship but participation in the local economy, and where the money for purchases is coming from. This would deal with that problem.

Right. Because the surtax would theoretically even hit a Canadian living overseas—somebody who happened to be living in the Cayman Islands or something, who wasn’t paying Canadian income taxes.
Yes, although you would exempt seniors in various ways—especially seniors who had paid into the CPP a certain amount. If you’d paid a certain threshold of income tax, you would then be exempt from the tax moving forward, which would cover somebody who had made a lot of money 10 years ago and paid a bunch of income tax on that, then bought a house on that basis.

This all makes sense. Even so, I can’t imagine a world where first-time buyers are less frenzied than they are. You write about this “fear of missing out” that drives the lower end of the market. Is there any policy measure that can control or lessen that, or will it always be with us?
No, I don’t think it will always be with us. It’s very much a product of the kinds of housing markets that have gotten out of hand in Vancouver and Toronto. You don’t see this “fear of missing out” craziness in other Canadian cities. Once you create expectations that prices are likely to come down—and certainly the surtax idea would do that—then you change the mindset of young buyers and you have a very different market.

Can I ask how old you are?
Sure. I’m 34.

And you live in Vancouver. Do you own property there?
I do not. But my parents do, and I’m an only child.

Intellectually you know that the market is not a reasonable market right now, but have you ever been tempted to get in anyway? How close have you come to actually putting a down payment on a place?
Ah, not close. But I do have moments of self-doubt about the market. And if I’m doubting myself when I have all this data in front of me, that just shows how easy it is for people to get caught up in this. That’s what’s so dangerous and upsetting to me: that there are a lot of people who will get caught up in this, and our governments are standing by and allowing it to happen.

Article source: http://torontolife.com/real-estate/qa-joshua-gordon-researcher-blames-buyers-rising-home-prices-toronto/

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