Maria Mak.Burnaby Realtors - right time to reduce the PPT

*Home Sense - right time to reduce the PPT*

Each year, the BC Legislature's Select Standing Committee on Finance and Government Services travels throughout BC seeking input about spending and taxation priorities for the upcoming provincial budget.

The Committee reviews and summarizes this information and reports its findings to the Finance Minister, who uses it as input in budget deliberations.

Representatives of the Real Estate Board of Greater Vancouver had the opportunity to make recommendations.

Here is our written submission. (The printer-friendly copy is the full written version that contains a page of income and housing price data for neighbourhoods in the Real Estate Board area.)

BCis on target to balance the 2014/15 budget with a projected surplus of $266 million. This means the time is right to reduce the Property Transfer Tax (PTT).

Reducing the PTT matters to families and anyone working in real estate-related jobs including architecture, construction, home inspection, leasing, brokerage, mortgage lending and legal services.

Real estate plays a vital role in growth, providing jobs and small business opportunities.

Real estate’s contribution to the economy in Greater Vancouver is enormous. In 2013, 28,524 MLS® home sales in the Real Estate Board’s area generated $1.84 billion in economic  pin-offs and created 13,977 jobs. Real estate is the backbone of our communities. Province-wide, the housing sector (construction and real estate) accounts for 25.6% of total economic activity (GDP).

Government is responsive

In 2013, in response to our message, “Help Reduce the Property Transfer Tax", the government made it possible for first-time buyers to buy a home worth up to $475,000 and not pay the PTT. Previously the threshold was $425,000.

Given the projected 2014/15 budget surplus, the government can afford to make changes to the PTT. Continuing to rely on the PTT for a large share of revenue – estimated to be $854 million in 2014/15 – unfairly increases the cost of homes and reduces access for middle- and lower-income buyers.

Who will benefit?

Our communities, including first-time buyers and anyone working in real estate-related jobs will benefit.

Think about when we were younger, landing a first job, buying a modest first home, starting a family and then trading up to a larger home has been a right of passage for generations.

Today, this is possible for fewer and fewer younger British Columbians. The rate of home ownership for 25-34 year olds in BC is now 48.2%. In Ontario it’s 53.8%, in Alberta it’s 59.3% and Canada-wide it’s 52.4%.2

In our Real Estate Board area, the benchmark price of a detached home is $633,500.3 The PTT adds $10,670 to this price given that this home does not qualify for the first-time buyers’ exemption. It’s difficult for first-time buyers to afford this home given that the annual income required is $100,216.4 The average household total income in the Vancouver CMA is $83,666.5

As a consequence, six in 10 first-time buyers are delaying their home purchase, which in turn, significantly dampens economic activity in our neighbourhoods.6

Making adjustments to the PTT would ensure home ownership is more affordable, which in turn is a strategy for a secure and prosperous future.

Recommendations

The PTT is charged at a rate of 1% on the first $200,000 and 2% on the remainder of the home price. We urge the government to:

1. Increase the 1% threshold to $525,000 from $200,000 to modernize the PTT to better reflect the current price of homes. The 2% rate would be applied to the remainder of the home price.

2. Index the 1% threshold to ensure it more accurately reflects housing market changes over time, using Statistics Canada’s New Housing Price Index or the MLS® Home Price Index, and make annual adjustments.

1 Natural Resources 7.7% is comprised of Agriculture, Forestry, Fishing and Hunting at 1.85% and Mining, Quarrying and Oil and Gas Extraction at 5.81%.

2 Statistics Canada 2011 National Household Survey. Home ownership, by province, as a percentage of all households where the primary maintainer is aged 25 to 34 years old.

3 Real Estate Board of Greater Vancouver composite residential benchmark price, as at September 2014.

4 See Footnote D on reverse.

5 Statistics Canada 2011 National Household Survey. Vancouver Census Metropolitan Area (CMA) Average Household Total Income.

6 BMO Home Buying Report, First-time Buyers’ Budgets Increase to $316,100 (Canada-wide) While Rising Prices Cause Delays, BMO,

March 18, 2014.

 

 

Maria Mak. Burnaby Realtor - what is a contract and when is it legally binding?

  

A contract is a legally binding agreement between two or more parties and describes the rights and obligations of the parties to the contract.

Where a contract has been properly drafted and signed by the parties to the contract, and where the terms are clear and the contract is not for an illegal purpose, then it is likely that a Canadian court would consider the contract valid and enforceable.

Only the parties to a contract can sue or be sued under the terms of that contract.
Before you sign a contract

1. Never sign a contract if you don’t understand it.

2. Before you sign a contract, consult your REALTOR®, your REALTORS®’ managing broker, and/or your lawyer for advice.

As a general rule, Canadian courts expect that if you have signed a contract, you have agreed to it and you will therefore be bound by its terms. You may not be protected if you claim you did not understand what you were signing. Always make sure you understand a contract before you sign it.
Standard form contracts.

The real estate contracts used by REALTORS® are standard form contracts. The wording and terms of these contracts have been prepared by lawyers and have been tested in Canadian courts.

Cancelling a contract.

If you have signed a standard form Multiple Listing Contract, Exclusive Listing Contract or Exclusive Buyer Agency Contract and you wish to cancel the contract early, you can only do so if the other party to the contract (your REALTOR®’s company) agrees. The Real Estate Board cannot require its members to cancel listing or buyer agency contracts early.

If you have signed a contract to buy or sell a property (contract of purchase and sale) and wish to cancel it you should seek legal advice without delay. 

REALTORS® are not parties to these contracts and therefore cannot cancel them unless the contracting parties agree, in writing, to do so.

What happens if a buyer or seller doesn’t fulfil the terms of a contract?

Even though your REALTOR® may have drafted the contract to sell or buy a property for you, s/he is not a party to that contract. A REALTOR® cannot force his/her client to fulfil the terms of a contract with the buyer or seller. If the buyer or seller does not fulfil the commitments they have made in the contract, you may have legal recourse and should seek legal advice.

If you do not have a lawyer, you may wish to contact the Lawyer Referral Service: 604.687.3221. If you have difficulty understanding English then you may wish to contact organizations like S.U.C.C.E.S.S., call 604.684.1628 for assistance.

Here are examples of common issues for which the buyer or seller (not the REALTOR®) is responsible: •  Buyer does not close the sale. •  Buyer does not remove the contract’s subject clauses. •  Seller does not close the sale. •  Seller does not remove the contract’s subject clauses. •  Property is left untidy or dirty by the seller. •  Seller has removed items that were included in the contract. •  Transaction does not close on time. •  Appliances break down or a previously unknown property defect reveals itself after closing.

Your REALTOR® and his/her brokerage may be able to assist you to resolve this type of complaint. Typically your REALTOR® will contact the other party’s REALTOR® or brokerage and let them know about your concerns and ask them for assistance in resolving your concern. As noted, your REALTOR® cannot force the other party to do what they said they would do in the contract. (For this, you need the assistance of a lawyer or the Courts.)

Maria Mak - Burnaby Real Estate Agent - - I am honoured to be a member of Quarter Century Club of the Real Estate Board of Greater Vancouver

Maria Mak - Burnaby Realtor - I am honoured to be a member of Quarter Century Club of the Real Estate Board of Greater Vancouver.

Maria Mak - Burnaby Real Estate Agent - - I am honoured to be a member of Quarter Century Club of the Real Estate Board of Greater Vancoucer

Maria Mak - Burnaby Realtor - I am honoured to be a member of Quarter Century Club of the Real Estate Board of Greater Vancouver.