the real/estate blog


Pay your taxes

Posted in Real Estate,Tax by Cesia Green on June 14, 2013
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Most people aren’t aware of this, but if you don’t pay your municipal property taxes, the city or town has the right to sell your house out from under you.

Keep in mind that justTaxes because they can, doesn’t mean they necessarily will. First, the municipality cannot start the process until the third year after the taxes are due (the second year in the case of vacant land). Second, after the process is started, you have a full year to repay the taxes owing, after which it is cleared and they cannot sell your home. The municipality can also extend that year, so you can effectively have a grace period before they start enforcement. However, if you don’t pay, they can put your house up in a tax sale, and accept an offer from the highest bidder. And this is final – all you are entitled to is any profit above what is owed on taxes, your mortgage or any other amount owing against the land, and the municipality is not required to accept the highest or best price or inquire into property values.You can check out the Municipal Tax Sales Act here.

HST rebates

Posted in Real Estate,Tax by Cesia Green on April 26, 2013
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Here’s another tax-relNew houseated post for near tax time: HST rebates on a new home. If you are buying a brand-new home, you are entitled to a rebate, but only in specific circumstances:

  1. You must intend to live in it as your primary home. It can’t be a cottage or other seasonal residence.
  2. If you are not going to live there, an immediate family member of yours (or of your spouse’s) must intend to live there. You can rent it to your brother and get the rebate, but you can’t rent it to a friend.

If you meet these requirements, you can save a significant amount in taxes.

Tax tips for executors

Posted in Estate Planning,Tax by Cesia Green on April 16, 2013
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Tax timeIf you are the executor of an estate, you have very clear and strict rules for filing taxes for the deceased.

First, you have to file their final return. This includes all income received up until the date of their death. If the date of death is before October 31, the return is due by April 30 of the next year; after October 31, it is due within six months of the date of death.

Second, you must file a T3 Trust Return. This includes all income earned by the estate from the date of death until the estate is wound up.

Finally, when the Assessment Notice is received for the final tax return filed, a request should be made to Revenue Canada for a Clearance Certificate. The Clearance Certificate will confirm that there are no further taxes owing by the deceased or their estate and any funds remaining in the estate can be given to the beneficiaries.

Estate taxes can be difficult and complex, and you can be liable for misfiling if you are the executor. This is a situation where it may not be appropriate to do it yourself; an accountant can help immeasurably with estate taxes.

Tax time

Posted in Real Estate,Tax by Cesia Green on April 12, 2013
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With tax time coming up shortly here in Canada, I thought I would revisit a topic: when do you have to pay HST on a house?

The short answer: always, unless there is an exemption. One major exemption is for resale homes; as long as it has been used for residential purposes, there is generally no HST. There are also significant rebates on new homes if you or an immediate family member plans to live there. There are also a number of very grey areas: farmland, houses used as part of a business, or houses that have been substantially renovated. If you’re not sure whether HST will apply, ask a specialist.

Getting credit

Posted in Real Estate,Tax by Cesia Green on January 11, 2013

If you are a first-time buyer, you are eligible for tax credits for costs associated with buying your first home. Items like legal fees, land transfer tax, and other costs associated with buying your home are open for a claim on your income taxes the following year. Keep those receipts!

First-timer benefits

Posted in Real Estate,Tax by Cesia Green on December 21, 2012
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The Home Buyers’ Plan is a plan that allows a home buyer to withdraw funds from most registered retirement savings plans (RRSPs) in order to buy or build a qualifying home either for you, or a relative that has a disability. Some RRSPs that do not allow any withdrawals to be made include some locked-in or group RRSPs, but more information about this matter can be obtained from the individual who issues your RRSP.

In any single calendar year up to a maximum of $25,000 can be withdrawn from the RRSP. You have the option to withdraw a single lump sum or you can make a series of smaller withdrawals throughout the year, as long as the total amount of withdrawals does not exceed the maximum amount of $25.000. It is important to note that before any amount is withdrawn from your RRSP, the RRSP contributions must be in the RRSP for at least 90 days, or else they may not be deductible. Any withdrawals that are made have to be repaid within a period of 15 years, and each year you will have to make a payment until the HBP balance is completely paid off. If you fail to repay an amount in a certain year then the amount will be included in your income for the year in which the withdrawal was made. You should consult with your financial advisor before withdrawing any funds for this purpose.

Property assessments

Posted in Real Estate,Tax by Cesia Green on October 12, 2012
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Last week, I received my 2012 property assessment notice from MPAC. The Municipal Property Assessment Corporation assesses property values every four years for the purpose of determining municipal taxes. They do this through an analysis of sales, and focus on five major factors: location, lot dimensions, living area, age of the structure(s) (adjusted for renovations or additions) and quality of construction. Items like garages, fireplaces, boathouses and the number of bathrooms can affect value, as can features such as proximity to a golf course or green space.

MPAC has a feature called AboutMyProperty where you can get more detailed information about your house when the assessment is released. If you are unsatisfied with the assessed value, you can also appeal it to the Assessment Review Board.

An update on taxes for Americans outside of America

Posted in Tax by Cesia Green on July 10, 2012
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I’ve written several posts before on tax planning for Americans in Canada (you can see them here, here and here). The Globe and Mail published this article a couple of weeks ago on what the IRS is now doing to assist Americans living outside of the U.S. who have not been filing their taxes.

As I have mentioned before, the U.S. is one of the few countries in the world that taxes based on citizenship rather than residency. If I moved to Miami, I would stop filing taxes in Canada as I would no longer be a Canadian resident, but if my cousin Jennifer in Miami moved to Barrie, she would still have to file her U.S. taxes unless she renounced her citizenship.

The problem for many Americans is that they have not been filing because they were not told they needed to. For the most part, they are unlikely to owe any taxes to the U.S.; tax treaties between our countries essentially net everything out for most people. However, there are penalties to not filing taxes, and that is the bigger issue for many Americans resident in Canada.

With these new rules, qualified individuals must  submit three years of back taxes, six years of bank reporting forms and a signed letter explaining why they haven’t filed. To qualify, they must have “simple” returns (as defined by the IRS) and owe less than $1,500 a year in taxes, based on the past three tax years.

If you have American citizenship and have not been filing your taxes, you should see an accountant to determine whether you can access this amnesty program.

Advice for advisors

Posted in Charitable giving,Estate Planning,Tax by Cesia Green on June 12, 2012
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I missed blogging last week for what I think was a very good reason: I am on the planing committee for a golf tournament for the Barrie Women and Children’s Shelter. This was the third annual tournament, but we still needed to be planning since September of last year, with a lot of last-minute items to go through last week. It was somewhat consuming in the days before the tournament, which is why I had nothing on my mind but golf all of last week. The tournament was last Friday, and was a resounding success, raising almost $12,000.00 for the shelter.

With charitable events still on my mind, I wanted to talk today about a website I just learned of called CharitablePlanning.com. This is a website designed to help professionals – lawyers, acc0untants, financial planners, etc. – help their clients through research, practice tips, commentary and other tools. There are various products, all with a fee attached, that are available to help us help our clients with what can be very complex decisions about both current charitable giving and also about bequest planning.

This is certainly an interesting option for estates, tax and finance professionals and could be an extremely useful tool in assisting clients with making charitable donations.

Tax breaks for space burials

Posted in Funeral planning,Just for fun,Tax by Cesia Green on January 24, 2012
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Here’s a new one: the state of Virginia is considering offering a tax break for anyone who agrees to have their cremated remains sent into space.

The state is looking to increase revenues for the Mid-Atlantic Regional Spaceport, and is considering tax breaks as a means to encourage people to use it as a burial method. Joining the ranks of Timothy Leary and James Doohan could end up saving you money.

You can read the LA Times article about it here.

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