2023 New Canadian real estate LAWS

2023 New Canadian real estate LAWS

New measures include first time savings account, anti-flipping laws, tax incentive for new homebuyers and tax on non-resident property owners

Navtaj Chandhoke | Jan 1st, 2023 | www.Flipping4Profit.ca

Canadian real estate investors must be aware of these new laws and use the professional advice from experts. Canadian federal and provincial governments have introduced new laws to address to boosting the supply of affordable housing. Most of them are focused on flipping houses, unused vacant home taxes, foreign buyers and introducing new program for first time home buyers’ plan.

A First Home Savings Account (FHSA), an increased tax on home-flipping and a tax on unused or underused housing are among the new measures now in effect. You can watch on YouTube.

2023 CANADIAN REAL ESTATE LAWS

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First Home Savings Account (FHSA)

The FHSA allows certain homebuyers to save up to $40,000 toward a home purchase, with a maximum annual contribution of $8,000 over five years. Contributions to the FHSA are tax-deductible and withdrawals to purchase a home are tax-free.

Multigenerational Home Renovation Tax Credit

Another new tax benefit related to housing is the Multigenerational Home Renovation Tax Credit. The refundable tax credit will provide up to $7,500 in support for constructing a secondary suite for a senior or an adult with a disability to live with family members. Eligible families can claim 15% of a maximum $50,000 in home renovation and construction costs to build a secondary housing suite.

New taxes on home-flipping

The government brought in a new rule in Budget 2022 which has effectively increased taxes on home-flipping. The change means the government will assume anyone who sells a home after possessing it for less than 12 months will be considered to be flipping the property. Profits from the sale would be considered business income, not a capital gain.

But the change comes with a number of exceptions, such as selling a home because of a death or divorce and lot more reasons.

Canada’s new anti-flipping rules for residential real estate are scheduled to come into force on Jan. 1, 2023 Please WATCH, SHARE, SUBSCRIBE and add comments. https://youtu.be/zRcc-SkdBJA

Underused Housing Tax (UHT)

The government is also introducing an Underused Housing Tax (UHT). 

The UHT is a national, annual one per cent tax on the value of vacant and underused residential property in Canada owned directly or indirectly by non-resident, non-Canadians. Any non-resident, non-Canadian who owns an underused or vacant residential property in Canada as of December 31, 2022 will have to file a UHT return for the property by April 30, 2023.

Doubling the First-Time Home Buyers’ Tax Credit

Help Canadians save on closing costs by doubling the First-Time Home Buyers’ Tax Credit to provide up to $1,500 in direct support to home buyers, starting in 2022, to offset the increasing closing costs involved in buying a home.

Other changes by the province

British Columbia and Ontario government have also introduced new laws. 2023 New Canadian real estate LAWS are going to effect the Canadian real estate market and may provide affordable housing for Canadians.

Join the annual membership at professional real estate investors group (PREIG) Canada to network every month to learn  how to invest in Canadian real estate successfully.

Hard Money Lenders in Canada

Hard Money Lenders in Canada

Hard Money Lenders in Canada Canadian real estate is one of the most expensive investments one can make. This is why most Canadians borrow money to buy or invest property. There are different financing options that Canadian real estate investors can choose based on their financial status and financing needs. Canadian mortgages and hard money financing are two of the best real estate financing options for real estate investors.Hard Money Lenders in Canada

Mortgages are usually taken on by Canadian homebuyers to pay for a home they want to live in. To qualify for a mortgage, one must have 5%-20% minimum down payment. Canadian banks and financial institutions also check the borrower’s credit history to ensure that they are qualified.

Hard Money Lenders in Canada are Different

These are mortgages taken by Canadian real estate investors to finance fix and flip deals who might have taken coaching and or apprenticeship from Flipping4Profit.ca

Canadian homeowners can also enjoy the benefits that hard money financing offers to fix and flip their own principal residence.

Top TEN benefits of using Canadian Hard Money lenders for real estate FLIPS

Hard Money Lenders in Canada are asset based private lenders

Hard Money Lenders in CanadaHard money financing is asset based refers to a short-term real estate mortgage secured by the value of a property. Canadian hard money lenders don’t care about a Canadian real estate investor’s credit worthiness as long as they have a property whose value exceeds the mortgage amount.

A Canadian real estate investor would approach the lender to finance the purchase and repair of a “fixer-upper” property.

The expectation is that the final sale value or after repair value (ARV) of the property would make enough of a profit to pay off the mortgage.

A Canadian hard money lender would typically ask for the property evaluation in “as, is” condition and after repair value (SRV) in the form of an AACI appraisal. They also loan to value estimates and the Canadian real estate investors plan to renovate or build the property.

Because the loan is secured by the property’s value, lenders don’t place a lot of weight on a borrower’s credit history. They would prefer to lend to someone that has a history of successful property flips or a larger down payment. Successful Canadian real estate investors carry less risk as they know their way around the property market.

Also, if a property deal doesn’t go as planned, the Canadian hard money lender is more likely to recoup their money if the borrower had made a large down payment. The sale of the property would cover the balance of the loan amount. This is why many hard money lenders need a minimum down payment of 5-35% of the property sale price.

Hard Money Lenders in Canada can lend 100% of Purchase price

Hard Money Lenders in CanadaThere are some 100% Canadian hard money financing that can lend you the full purchase value of the property with no down payment requirements. These “no money down” loans take into account the profitability of a real estate project.

Most Canadian hard money finance mortgages have a payment term of between one to six months.

Because of their higher risk and shorter payment period, interest rates are often higher than mortgage interest rates.

Most hard finance loans have an interest rate of 12-18% or higher, depending on your risk profile.

Hard Money Lenders in Canada are for Fix and Flip investors

Canadian Hard money loans also have origination fees called “lenders fees”. This is a set percentage of a mortgage amount that the lenders charge to process, fund and service a hard money loan.

These fees range from between 3-5% of the mortgage amount. So, if you borrow $200,000 on a loan that charges three percent lenders fee you will need to pay an extra $6000 on top of your down payment.

The Corporation of the Town of Deseronto – Ontario tax sale properties

Corporation of Town of Deseronto

municipal act, 2001

sale of land by public tender

ontario regulation 181/03

municipal tax sales rules

Corporation of the Town of DeserontoCorporation of the Town of Deseronto take notice that tenders are invited for the purchase of the land(s) described below and will be received until 3:00 p.m. local time on Wednesday, March 31, 2021, at the Municipal Office, 331 Main Street, P.O. Box 310, Deseronto, ON K0K 1X0.

The tenders will then be opened in public on the same day as soon as possible after 3:00 p.m. at the Municipal Office, 331 Main Street, Deseronto, ON K0K 1X0.

Corporation of the Town of Deseronto Description of Land(s):

ROLL NO. 12 02 010 015 05400 0000, 66 green ST, deseronto, PIN 40588-0136 LT, N1/2 LT 18 BLK M PL 243; deseronto; county of hastings, file NO. HSDO19-005-TT

According to the last returned assessment roll, the assessed value of the land is $ 48,500.

Minimum Tender Amount:$66,110.81

ROLL NO. 12 02 020 025 00600 0000, 313 main ST, deseronto, PIN 40589-0055 LT, LT 7 PL 84; deseronto ; county of hastings, file NO. HSDO19-007-TT

According to the last returned assessment roll, the assessed value of the land is $ 50,000.Corporation of the Town of Deseronto

Minimum Tender Amount:$41,906.84

Tenders must be submitted in the prescribed form and must be accompanied by a deposit of at least 20 per cent of the tender amount, which deposit shall be made by way of a certified cheque/bank draft/money order payable to the municipality (or board).

Except as follows, the municipality makes no representation regarding the title to, existing interests in favour of the Crown, environmental concerns or any other matters relating to the land(s) to be sold. Any existing Federal or Provincial Crown liens or executions will remain on title and may become the responsibility of the potential purchaser. Responsibility for ascertaining these matters rests with the potential purchasers.

This sale is governed by the Municipal Act, 2001 and the Municipal Tax Sales Rules made under that Act. The successful purchaser will be required to pay the amount tendered plus accumulated taxes and any taxes that may be applicable, such as a land transfer tax and HST.

Real Estate InvestorsThe municipality has no obligation to provide vacant possession to the successful purchaser.

For further information regarding this sale and a copy of the prescribed form of tender or if no internet access available, contact:

Mrs. Mora Nicholls, CMO, CMM III,
Deputy Treasurer
The Corporation of the Town of Deseronto
331 Main Street
P.O. Box 310
Deseronto, ON K0K 1X0
613-396-2440 ext. 203
www.deseronto.ca

March 12, 2021 Ontario tax liens sale properties The Corporation of the Township of Stirling-Rawdon

Municipal act, 2001

sale of land by public tender
Ontario tax liens sale properties The Corporation of the Township of Stirling-Rawdon take notice that tenders are invited for the purchase of the land(s) described below and will be received until 3:00 p.m. local time on March 12, 2021 at 2529 Stirling-Marmora Road, P.O. Box 40, Stirling-Rawdon, Ontario K0K 3E0.Ontario tax liens sale properties The Corporation of the Township of Stirling-Rawdon

March 12, 2021 Ontario tax liens sale properties The Corporation of the Township of Stirling-Rawdon

Description of Land(s):

PT LT 13 CON 7 rawdon as in QR163856; stirling-rawdon; county of hastings

PIN 40337-0081 (LT)

Municipally known as Vacant Land – Stirling, ON

Roll #12 20 119 020 07001 0000

Minimum Tender Amount:$5,054.22

PCL 22-1 SEC M39; LT 22 PL M39 rawdon T/W the right to use in common with all other grantees or owners of residential oots in the subdivision the area designated in the said subdivision as block a as private open space, for the purposes as set out in lt1439; stirling-rawdon; county of hastings

PIN 40340-0022 (LT)

Municipally known as

344 Swinburne Lane, Marmora, ON

Roll #12 20 119 035 09931 0000

Minimum Tender Amount:$6,592.63

PT LT 20 CON 14 rawdon PT 3 21R716; stirling-rawdon; county of hastings

PIN 40340-0154 (LT)

Municipally known as Vacant Land – Cosgrove Lane, Marmora, ON

Roll #12 20 119 035 13620 0000

Minimum Tender Amount:
$6,932.59

LT 10 N/S weaver ST PL 39 S/T spousal interest in QR428836; stirling-rawdon; county of hastings

PIN Part of 40333-0130 (LT)

Municipally known as

31 Weaver St., Stirling, ON K0K 3E0

Roll #12 20 218 010 07101 0000

Minimum Tender Amount:$7,677.71

LT 7 N/S weaver ST PL 39 S/T spousal interest in QR428836; stirling-rawdon; county of hastings

PIN Part of 40333-0130 (LT)

Municipally known as

25 Weaver St., Stirling, ON K0K 3E0

Roll #12 20 218 010 07311 0000

Minimum Tender Amount:$7,553.55

LT 8 N/S weaver ST PL 39 S/T spousal interest in QR428836; stirling-rawdon; county of hastingsOntario tax liens sale properties The Corporation of the Township of Stirling-Rawdon

PIN Part of 40333-0130 (LT)

Municipally known as 27 Weaver St., Stirling, ON K0K 3E0

Roll #12 20 218 010 07312 0000

Minimum Tender Amount:$7,553.55

LT 9 N/S weaver ST PL 39 S/T spousal interest in QR428836; stirling-rawdon; county of hastings

PIN Part of 40333-0130 (LT)

Municipally known as

29 Weaver St., Stirling, ON K0K 3E0

Roll #12 20 218 010 07313 0000

Minimum Tender Amount:$7,553.55

Ontario tax liens sale properties Tenders must be submitted in the prescribed form and must be accompanied by a deposit in the form of a money order or of a bank draft or cheque certified by a bank or trust corporation payable to the municipality and representing at least 20 per cent of the tender amount.

Except as follows, the municipality makes no representation regarding the title to or any other matters relating to the land to be sold. Responsibility for ascertaining these matters rests with the potential purchasers.

This sale is governed by the Municipal Act, 2001 and the Municipal Tax Sales Rules made under that Act. The successful purchaser will be required to pay the amount tendered plus accumulated taxes and the relevant land transfer tax. And H.S.T., if applicable.

Real Estate InvestorsThe municipality has no obligation to provide vacant possession to the successful purchaser.

For further information regarding this sale and a copy of the prescribed form of tender contact:

Ms. Roxanne Hearns,
CAO-Treasurer
The Corporation of the
Township of Stirling-Rawdon,
2529 Stirling-Marmora Road,
P.O. Box 40
Stirling-Rawdon, ON K0K 3E0

Force Majeure?

Force Majeure

Force Majeure

A “force majeure” clause (French for “superior force”) is a contract provision that relieves the parties from performing their contractual obligations when certain circumstances beyond their control arise, making performance inadvisable, commercially impracticable, illegal, or impossible.

Home buyers, sellers and Canadian real estate investors wondered whether a pandemic is considered force majeure (unforeseeable circumstances or “acts of God”), which could free them of their obligations in case housing prices were to plummet in the next few weeks. Others may be facing other liquidity issues.

A force majeure clause typically operates to absolve the non-performing party of liability for its failure to meet contractual obligations as a result of the extenuating circumstance, but its precise effect will depend on the language of the provision.

Quebec usually have this clause in their contracts.
Historically, force majeure events were recognized as forces of nature or acts of God events. However, the clause can and has been expanded to include events which are industry or transaction specific. Certain events created by extraneous human intervention can also fall under the category of force majeure events.

Example: fire, flood, earthquake, storm, hurricane, other nature disasters, war, invasion, act of foreign enemies, hostilities, civil war, rebellion, revolution, insurrection, military or usurped power or confiscation, terrorist activities, nationalization, government sanction, blockage, embargo, labor dispute, strike, lockout or interruption or failure of electricity or telephone service.

Data from the Canadian Real Estate Association (CREA) indicates that 65,494 homes were sold across Canada in the first two months of 2020, meaning that as many as 130,000 families may be in limbo, waiting for their transactions to close.
In the province of Ontario, Canada buyers, sellers and Canadian real estate investors are bound by their obligations under the Ontario Real Estate Association’s (OREA) Agreement of Purchase and Sale.

The only way a deal cannot close is if the government registration system closes down or lenders cannot fund loans, which is not the case right now.

Real estate businesses have been deemed an essential service in Ontario. Thus, real estate brokerages and law firms are allowed to function but with new guidelines to observe social distancing. At the same time, financial institutions are working and extending mortgage credit.

While buyers’ remorse is real, it is no ground to back out of the deal. During and after the Great Recession in 2008-09 and when the foreign home buyers’ tax was imposed first in British Columbia in 2016 and later in Ontario in 2017, many buyers tried to avoid closings after housing prices declined.

Courts, though, have found in favor of sellers in cases where buyers reneged on a signed deal.

An Ontario couple who reneged on a firm offer to buy was ordered by the court to pay $470,000 to make up for the difference in the price they agreed to pay and the subsequent sale price paid by a different buyer.

force majeure is not covered in OREA’s Agreement of Purchase and Sale, parties can include additional clauses in Schedule A of the Agreement. However, such terms must be entered at the execution of the agreement and not after the fact.

In some circumstances, parties may invoke frustration of contract when unforeseen circumstances make it impossible to perform their obligations under a contract. However, the bar to prove the frustration of contract is very high.

If a deal hits a snag, the best way forward is to work it out collegially. Instead of trying to nullify a contract, the parties could agree to a postponement until such time that the transaction can be completed. It is up to the parties to demonstrate that they have made reasonable, good faith efforts to fulfill their obligations.

Given the current pandemic and recent uptick in flooding and severe weather, which can cause severe damage to homes, it might be time to review standard buyer and seller agreements, which are province-specific.

Much can transpire during a sale and its closing. Introducing new standard clauses to protect both sides while providing opportunities for insurers to price risk will offer greater stability in uncertain times.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.