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Abbotsford

Meet your area specialist:
Landmark Realty
2790 Allwood St
Abbotsford, BC V2T 3R7


Cost savings programs to save you money


The Vancouver Sun

  1. BC Home Owner Mortgage and Equity (HOME) Partnership Program

For qualifying first-time buyers with a down payment, HOME offers a matching down payment loan of up to five per cent of the purchase price to a maximum of $37,500 on a home priced up to $750,000. The loan is interest-free and payment-free for five years. Then, buyers can repay their loan or make monthly payments at prevailing interest rates. Loans are due after 25 years. Learn more, call: 604-4394727 or 1-844-365-4727.

  1. B.C. Property Transfer Tax (PTT) First-Time Home Buyers’ Program

Qualifying first-time buyers may be exempt from paying the PTT of one per cent on the first $200,000 and two per cent on the remainder of the purchase price of a resale home priced up to $500,000. There’s a proportional exemption for homes priced between $500,000 and $525,000. At $525,000 and above, there is no rebate. Learn more, call: 1-250-387-0604.

  1. Foreign Buyer PTT Exemption

Foreign nationals with work permits coming through the BC Provincial Nominee Program are exempt from the 15-per-cent additional PTT charged to foreign buyers.

  1. B.C. Property Transfer Tax Newly Built Home Exemption

Qualifying buyers of new homes may be exempt from paying the PTT on a newly built home or newly subdivided unit priced up to $750,000. This can save buyers up to $13,000. A partial exemption is available on newly built homes priced between $750,000 and $800,000. Learn more, call: 1-888-3552700.

  1. B.C. home owner grant

The home owner grant reduces property taxes for home owners with an assessed value of up to $1,600,000. It’s reduced $5 for each $1,000 above that value, and eliminated on homes assessed at $1,714,000. This cap is raised to $1,754,000 in northern and rural areas. The basic grant provides up to $570 for property taxes on principal residences in the Capital, Greater Vancouver and Fraser Valley regional districts. The additional grant offers $200 to rural home owners elsewhere in the province. There’s also an additional grant of $275 to seniors, those who are permanently disabled and veterans of certain wars. Learn more by contacting your municipal tax office.

  1. B.C. Property Tax Deferment Program

The B.C. Property Tax Deferment Program allows you to defer tax payments. You may qualify if you’re 55 or older, a surviving spouse of any age or a person with disabilities. There’s also a Families with Children Program that allows you to defer if you’re a parent or grandparent financially supporting a child. Learn more, call: 1-888-3552700.

  1. Home Buyers’ Plan

Qualifying home buyers can withdraw up to $25,000 (couples can withdraw up to $50,000) from their RRSPs for a down payment. Home buyers who have repaid their RRSPs may be eligible to use the program a second time. To participate in the Home Buyers’ Plan, call 1-800-267-6999.

  1. GST/HST New Housing Rebate

New-home buyers can apply for a rebate for the five-percent GST if the purchase price is $350,000 or less. The rebate is equal to 36 per cent of the GST, to a maximum rebate of $6,300. There’s a proportional GST rebate for new homes priced between $350,000 and $450,000. There’s no rebate for homes priced at $450,000 and above. Learn more, call: 1-800959-8287.

  1. First-Time Home Buyers’ Tax Credit (HBTC)

Eligible individuals who bought a qualifying home in 2016 can claim the home buyers’ amount of $5,000 on line 369 of Schedule 1 when filing their 2016 income tax and benefit returns. For 2016, the maximum HBTC is $750, which is calculated by multiplying the home buyers’ amount of $5,000 by the federal non-refundable tax credit rate of 15 per cent (equal to the lowest personal income tax rate for the year). Learn more, call: 1-800959-8281.

  1. Home Adaptations for Independence (HAFI)

HAFI is a program jointly sponsored by the provincial and federal governments to provide up to $20,000 to help eligible low-income seniors and disabled home owners and landlords to make their homes more accessible and safer. Learn more, call: 604-433-2218 or 1-800-257-7756.

  1. B.C. Seniors’ Home Renovation Tax Credit

This credit assists eligible seniors with the cost of permanent home renovations to improve accessibility. The maximum refundable credit is $1,000 per tax year and is calculated as 10 per cent of the qualifying renovation expense (maximum $10,000). The forms are available online. Learn more, call: 1-800-9598281.

  1. CMHC Mortgage Loan Insurance Premium Refund

This program for home buyers with Canada Mortgage and Housing Corporation (CMHC) mortgage insurance provides a 10-per-cent premium refund and possible extended amortization without surcharge. To qualify, buyers must purchase an energy-efficient home or make energy-saving renovations. Learn more, call: 604-731-5733.

  1. Energy-saving mortgages

Financial institutions offer special mortgages to home buyers/owners who make their homes energy efficient. For example, home owners who have a home energy audit within 90 days of receiving an RBC Energy Saver™ Mortgage may qualify for a rebate of $300 to their RBC account. Likewise, the BMO Eco Smart Mortgage™ rewards customers for making energyefficient choices.

  1. Low-interest renovation loans

Financial institutions offer “green” loans for home owners making energy-efficient upgrades. For example, the VanCity Home Energy Loan is up to $50,000. RBC’s Energy Saver loan offers one per cent off the interest rate for a fixed-rate instalment loan over $5,000, or a $100 rebate on a home energy audit on a fixed-rate instalment loan over $5,000. For information, visit your financial institution.

15 Energy Conservation and Assistance Program

BC Hydro and FortisBC offer free energy assessments and energy-saving products to income-qualifying households for upgrades ranging from $300 to $5,000. Contact BC Hydro or FortisBC for more details.

16 FortisBC new home energy rebate offer

FortisBC and BC Hydro customers can receive rebates when building ENERGY STAR new homes or installing highefficiency natural gas fireplaces. Contact BC Hydro or FortisBC for more details.

17 Home energy rebate offer

BC Hydro and FortisBC offer home owners rebates for upgrades and improvements. These include insulation, spaceand water-heating systems and ventilation to reduce your energy consumption. There’s a bonus offer for completing three or more upgrades. The total value of the available rebates is $5,300 per household. Learn more, call: 1-877-740-0055.

18 Energy-saving kits

BC Hydro and FortisBC offer income-qualifying customers a free energy-saving kit containing products to help save energy and money. Check their websites for details.

19 ENERGY STAR appliances

BC Hydro Power Smart and various municipalities are offering $100 mail-in rebates to home owners buying ENERGY STAR clothes dryers and refrigerators. Coquitlam, New Westminster, North Vancouver City, North Vancouver District, Richmond, Vancouver and West Vancouver are participating. Learn more by contacting your local municipality.

20 FortisBC rebates for homes

Rebates for home owners include $300 for purchasing an EnerChoice fireplace, up to $1,800 off an ENERGY STAR water heater, or a $1,000 rebate for switching to natural gas (from oil or propane) and installing an ENERGY STAR heating system. Total value of available rebates is $5,300 per household. Learn more, call: 1-800-663-8400.

21 FortisBC rebate for rental apartment buildings

The Rental Apartment Efficiency Program for owners and managers of rental apartment buildings of nine or more units includes a water-efficient shower head, kitchen/bathroom faucet aerator, energy assessment and ongoing professional assistance. Learn more at www. fortisbc.com/rebates.

22 Join the Power Smart team

Become a member of Team Power Smart and start a challenge to reduce your electricity use by 10 per cent over the next year. If you’re successful, you’ll earn a $50 reward. Learn more at www.bchydro.com.

23 Building energy retrofit funds

The City of Vancouver’s $1 million fund includes a $150,000 grant to the Vancouver Heritage Foundation for retrofits to pre1940s homes, a new Home Energy Efficiency Empowerment Program for 675 home owners to evaluate energy efficiency, and $1 million to a Green Landlord Program to help non-market apartment building owners and operators reinvest in buildings and reduce energy costs. Contact the City of Vancouver for more details.

24 Rain barrel subsidy programs

Metro Vancouver municipalities offer rain barrels for sale at a discount for residents. For example, Richmond offers $30, Burnaby offers $70, Coquitlam offers $72 and West Vancouver offers $55. Other municipalities may have similar offers. Contact your municipality for more information.

25 Water-saving kits

Most Metro Vancouver municipalities offer watersaving kits to reduce water use including Burnaby, Coquitlam and Delta. Contact your local municipality to see what it offers.

26 Heritage Energy Retrofit Grant

Grants of up to $6,000 per household are available to assist with energy retrofits for Vancouver homes built before 1940 and homes listed on the Vancouver Heritage Register. Qualifying retrofits include insulation, air sealing, window repairs, storm windows and high-efficiency forms of heating and hot water. Learn more at www.vancouverheritagefoundation.org.

27 Local government water meter programs

Municipalities may offer water metering, so you only pay for the water you use. Burnaby, Delta, Richmond and West Vancouver have programs. For more information, visit your municipality’s website and search for “water meter.”

28 Vancouver Thermal Imaging Program

This is a new program to help detached home owners identify heat loss and connect them with energy-saving incentives. Neighbourhoods piloting the program include Strathcona, Hastings Sunrise, Dunbar-Southlands, Riley Park and Victoria Fraserview. Contact chris.higgins@vancouver.ca for more information.

29 Leaders in Energy Management Program

The Leaders in Energy Management Program partners BC Hydro with B.C.’s largest commercial, government and institutional customers. The program is offered to users who spend more than $200,000 a year on energy. Customers gain access to energy-management programs, tools and incentives. Learn more, call: 1-800-4746886.

30 Business energysaving incentives

These financial incentives are offered to organizations that replace inefficient technologies with energy-efficient ones. Learn more, call: 1-800-474-6886.

31 FortisBC rebate program for businesses

FortisBC provides a variety of rebates for commercial buildings. For more information on what programs are available, and to see if your business qualifies, contact FortisBC.

© 2017 Postmedia Network Inc



How to cut through the hype and navigate today?s housing market


G. MARION JOHNSON
The Vancouver Sun

If there’s one subject that dominates local headlines in Metro Vancouver, it’s real estate. With so much happening in the market, it can be hard to make sense of it all.

That’s especially true for home buyers, who may be as overwhelmed as they are excited about making the biggest purchase of their lives.

The long-term effects of last year’s government interventions into the market won’t be fully known for some time. And despite those efforts to temper escalating prices, demand remains consistent with long-term trends while supply is limited.

In fact, February 2017 had the lowest number of homes listed for sale compared to the same month since 2003. New listings for detached, attached and apartment properties in Metro Vancouver totalled 3,666, a decrease of nearly 37 per cent compared to February 2016.

Residential home sales in the region in February 2017, meanwhile, were down by close to 42 per cent from the record-breaking activity one year earlier, but remained in line with the long-term historical average for the month.

To gain a competitive edge when it comes to making a successful offer, you need to be prepared going in and work with your local Realtor.

“You want to have your ducks lined up: be pre-approved for a mortgage so you know what price point you’re looking at and be crystal clear on financing, what’s available to you and what you can afford,” says Dan Morrison, president of the Real Estate Board of Greater Vancouver (REBGV). “The important thing for buyers is to find a Realtor who specializes in your neighbourhood and in the type of product you’re looking for. A Realtor who’s acting for you understands the nuances of your situation and will help you manage expectations and get the home you want at the price you can afford.”

Although finding a house with a white- picket fence within a five- minute commute downtown is simply not a reality for most buyers, it’s important to understand that Metro Vancouver is not the homogenous market it’s often portrayed as being in the media.

“Every neighbourhood is different, every buyer and seller is different, every product is different,” Morrison says. “There are lots of opportunities within Metro Vancouver.”

For example, the price of condominiums today ranges between $375,000 and $650,000 depending on size and location.

Townhomes range between $500,000 and $900,000 in the region.

Detached homes in the City of Vancouver are at the high end of the market. Recent activity has pushed homes on Vancouver’s Westside above $3.4 million.

It’s a different story in neighbouring communities. The benchmark price of a detached home in Maple Ridge is $710,400; in Ladner the benchmark price is $947,900; in Port Coquitlam the benchmark price is $860,000.

The region appears to be heading into a more typical spring market compared to the past two atypical years, says REBGV President-Elect Jill Oudil. However, it’s still not uncommon for buyers to find themselves up against multiple offers, particularly on condos and townhomes.

Realtors are trained negotiators who can help buyers who may be swayed by the emotional aspect of purchasing a home and the intensity of bidding wars.

“Especially for the first- time buyer, it can be quite stressful,” says Oudil. “A Realtor can guide you through that process. It doesn’t always work out the way the buyer wants it to, but you’ve just got to keep plugging away at it.”

Realtors have exclusive information and resources to help buyers put together a winning offer. While the public has access to www.realtor.ca (formerly mls.ca) to view basic property information for any property listed on the Multiple Listing Service ® ( MLS® ), the most extensive real estate listing website in Canada, only Realtors have access to MLS ® itself and the detailed historical housing information it contains.

Planning ahead helps the process tremendously. If you’re contemplating buying a home next year, now is the time to start looking.

“Start going online and dropping by open houses, so that when you’re ready to begin the process, you’re knowledgeable already,” Morrison says.

Word of mouth remains a reliable way of finding a Realtor to work with. “Talk to your friends, family, neighbours and coworkers and get the names of Realtors they would recommend,” Morrison says. “Interview them; get them to give you a full presentation of how they work with their buyers and make sure they’re available when you’re available. Make sure they understand your situation, your requirements, and be totally honest with them.”

That last point is something Oudil can’t emphasize enough. As she tells her own clients, there’s no such thing as a stupid question.

“I think it’s important to work with someone you’re really comfortable with, who can guide and advise you through the whole process,” Oudil says. “Realtors care about their clients and are in it with you for the long term.”

© 2017 Postmedia Network Inc



Mill District 82 homes in two 6-storey wood frame buildings at 2555 Ware Street Abbotsford by Heinrichs Developments


Heinrichs Developments? Mill District to take its place in Abbotsford

Michael Bernard
The Vancouver Sun

Project: Mill District

Project location:  2555 Ware St., Abbotsford

Project size/scope: A total of 82 homes, 41 units in each of two six-storey-high wood-frame buildings in the city’s Mill Lake neighbourhood. Walking distance to the 100-store Sevenoaks Shopping Centre and other amenities, including pedestrian pathways around Mill Lake

Prices: From the mid-$200,000s 

Developer: Heinrichs Developments 

Architect: David Tyrell Architecture

Interior Designer: i3 Design

Sales centre:  33323 South Fraser Way, Abbotsford

Hours: noon —5 p.m., Sat — Thurs 

Telephone: 604-621-5888

Website: http://www.MillDistrict.ca    

Occupancy: Summer 2018

If sales figures are any indication, Mill District, a multifamily project in the Fraser Valley community of Abbotsford, is tapping into an appetite for something new and somewhat different.

In the first week of sales, condo marketing firm MLA wrote up 20 deals for homes in the 82-unit complex, which is designed with bold green and yellow panels. Many of those deals involved downsizing seniors looking for an alternative to traditionally designed condo complexes, developer Gerald Heinrichs said.

“It’s fairly bold for Abbotsford, which is a traditional market,” he said. “We’ve had so much feedback from our purchasers and people who are attracted to it because it brings some excitement to living there. It’s not your plain vinyl siding and beige-and-white kind of project.”

In addition to the brightly coloured green panels and yellow soffits, the development, split into two six-storey buildings with 41 units each, features vertical corrugated panels and brick work for a decidedly more industrial take.

Heinrichs credits the Mission Group, a Kelowna-based development company in which he remains a partner while building his boutique Abbotsford-based development firm, for the outside-the-box look. Mission Group has attracted much attention over the last few years for its U1 and U2 student housing projects adjacent to the UBC Okanagan campus and its ambitious Central Green development on the old school property of the same name in Kelowna.

“The Mission Group is a forward-thinking company and a lot of that rubbed off on me,” he said.

Mill District was an easy choice for Mike Farina and his wife Beverley, who have lived in homes big and small in Abbotsford for more than 36 years.

“We had our name into every new place that went up over the last two or three years,” said Farina, a steel company sales executive. “Then we saw this and I said, ‘Hey, this looks different.’”

“I like the more modern type look to it, compared to a lot of buildings that look like they were built 20 years ago. It’s nice and fresh. Once we saw the show suite, my wife said: “’You know I could do this.’”

This past winter, when they were glad their adult son was around to shovel the significant snowfalls, they were persuaded that it was time to downsize from their 2,700-square-foot home on nearby Eagle Mountain. They purchased an 1,100-square-foot two-bedroom unit at Mill District.

Heinrichs said Mill District fills an unmet housing need in Abbotsford: townhouses and condos of a larger scale sought by downsizers and retirees selling their homes in Vancouver, Burnaby and Surrey and moving east. 

“You can sell your single-family home in Vancouver and probably buy an entire floor in this building,” he said. “I think you are going to see people pushing out of the west and moving to the east to retire and for affordability.”

Heinrichs says his architect and long-time friend David Tyrell is responsible for the building’s striking design, and that Abbotsford city council featured the building in one of its brochures.

 Tyrell, who also designs for Mission Group, said he favours a design with “structural and functional honesty”, one that is simple and minimalist, rather than decorative.

“The challenge of the site was one of proportion,” he said. “It is relatively narrow and deep and that caused us difficulty in how to create a project that would be neighbourly in one sense and was something that would be enjoyable to live in from the point of view of the residents.

“The original concept was a long narrow building that was centred on the site. But that resulted in a long double-loaded corridor that was anonymous and unfriendly with 12 to 14 doors on each side.

“So what we decided to do — and it’s a credit to the developer and the city planning department — is to break it into two more square buildings with a large gap in between. That afforded us the opportunity to create a ‘cluster’ feeling in which you were more likely to get to know your neighbours. The new design also reduced the shadow cast on adjacent buildings and protected some of their view corridors.’

Inside the homes, expansive windows and nine-foot ceilings create a sense of openness and allow in plenty of light while liberally sized covered balconies with gas barbecue fittings provide views of Mill Lake and the mountains beyond.

Main living areas feature wood-grain laminate flooring or an optional upgrade to brushed oak wide-plank engineered hardwood. Bedrooms are plush nylon carpeting.

Depending on the layout, suites come with a side-by-side Whirlpool front-loading washer and dryer.

Kitchens have premium KitchenAid stainless steel appliances with 30-inch full-depth refrigerators, 30-inch gas ranges, dishwashers with top controls and microwaves with hood fan. An upgrade to a Fisher and Paykel stainless steel package is also available.

Cabinetry is shaker style with soft-close doors and drawers and contemporary brushed nickel hardware. Countertops are made of polished quartz, complemented by an intricate hexagon-detailed matte tile backsplash. An island provides room for food prep and guest seating.

Bathroom floors are done in large-format 12-by-24 inch matte porcelain tile and countertops are durable laminate. Undermount sinks are available as an upgrade. Deep soaker bathtubs and frameless glass showers complete the offerings.

All homes come with air conditioning, while the secured underground parking area has spacious storage lockers.

Heinrichs Developments provides buyers with after-sales customer service and a one-year comprehensive warranty, while all homes are covered by a Travelers Insurance 2-5-10 warranty including two years for materials, five years for the building envelope and 10 years for structural elements.

© 2017 Postmedia Network Inc.



B.C. Supreme Court decision could shake up real estate market


Landmark B.C. court ruling will shake real-estate industry

Douglas Todd
The Vancouver Sun

 

A B.C. Supreme Court ruling will send shock waves through the arm of the Canadian real-estate market that is powered by foreign capital, say immigration lawyers.

The ruling targets a weakness in Canadian laws that often leads foreign owners of real estate in cites such as Metro Vancouver and Toronto to claim they are “residents of Canada for tax purposes” when they are not.

The landmark B.C. decision requires notary public Tony Liu to pay his client more than $600,000 because Liu failed to adequately determine whether the Vancouver house his client was buying for $5.5 million had been owned by a tax resident of Canada.

As a result, the Canada Revenue Agency did not get paid, at the time of the sale, the 25 per cent capital gains tax it charges non-resident sellers of Canadian property on any profit they make on the sale.

So the CRA later demanded the buyer pay the $600,000 in tax. The buyer, in turn, sued Liu, arguing Liu failed to discover the seller was not a tax resident of Canada.

The CRA considers people who don’t live in the country at least six months a year and don’t pay income taxes here to be foreign property investors and speculators and thus subject to capital gains taxes.

Three Canadian immigration lawyers said the CRA tax-residency rule is often not enforced, even in over-heated housing markets in Vancouver and Toronto that are in part fuelled by offshore money.

The ruling published this month by B.C. Supreme Court Justice Kenneth Affleck strikes to the heart of a gaping hole in Canadian tax, immigration and property-transfer law, say the immigration lawyers.

The B.C. decision is a stark warning to real estate agents, notaries and lawyers who fail to ensure that sellers of properties are truly tax residents of Canada, said David Lesperance, a tax and immigration lawyer based in Toronto.

“This truly is a game changer,” said Vancouver immigration lawyer Richard Kurland.

“It’s a precedent. Real estate agents can now get a knock on the door from the taxman, asking for the (capital gains) taxes that should have been collected by Ottawa, because the agent failed to make adequate inquiries.”

Sam Hyman, a Vancouver immigration lawyer, said the judge’s decision alerts purchasers to “the dire consequences” of making offers on properties sold by people who may be trying to avoid capital gains tax by falsely declaring they are tax residents of Canada.

Many buyers and their agents, Hyman said, are not being diligent in making sure the seller is a physical or tax resident of Canada, while others are being “cavalier” or “engaging in wilful blindness” about it.

The immigration lawyers urged the B.C. government to end the “honour system” that leaves it largely up to sellers to state on real-estate-industry forms whether or not they are residents of Canada for tax purposes.  

They said the honour-system loophole could be fixed through Ottawa and Victoria agreeing to the sharing of information among the CRA, the federal Immigration Department and the arm of the B.C. government responsible for property sales.

The B.C. Liberals, Kurland said, have stubbornly refused to solve the costly problem by reforming the government’s property-transfer forms to require sellers to answer whether they are “a tax resident of Canada.”

The B.C. government, which last summer brought in a 15 per cent tax on foreign buyers to cool Metro Vancouver’s globalized real estate market, recently began to ask property sellers and buyers to answer, “What is your citizenship?”

But citizenship is irrelevant, Kurland said.

The issue that really matters to most Canadians and the CRA, he said, is tax residency, whether a home buyer or seller pays their fair share of taxes in this country.

All three lawyers say Canada is forgoing hundreds of millions of dollars in tax revenue by not enforcing the country’s tax-residency rules, which are designed in theory to give long-term residents an advantage over foreign nationals.

The lawyers said they hope the federal government – which this week pledged to “target high-risk international tax and abusive tax-avoidance cases” – will make it a priority for CRA to audit mansion owners who pay little or no income taxes.

It would be relatively easy for the CRA, Lesperance said, to conduct “lifestyle audits” on wealthy trans-national “astronauts,” also known as “ghosts,” who pay little or no income tax in Canada while financing family members to spend lavishly on expensive homes and cars in the country.

In some cases, Kurland said, dubious immigration professionals are advising clients they can “eat their cake and have it too.”

Some property owners, for instance, are claiming to real estate officials that they are Canadian residents, so they can avoid capital gains taxes while selling houses and qualify for permanent resident status.

But some of the same people, at the same time, are claiming to the CRA that they are not residents under our tax law, so they don’t have to declare their global income and property holdings, and pay income taxes on them in Canada.

© 2017 Postmedia Network Inc.



B.C. Supreme Court decision could shake up real estate market


Landmark B.C. court ruling will shake real-estate industry

Douglas Todd
The Vancouver Sun

 

A B.C. Supreme Court ruling will send shock waves through the arm of the Canadian real-estate market that is powered by foreign capital, say immigration lawyers.

The ruling targets a weakness in Canadian laws that often leads foreign owners of real estate in cites such as Metro Vancouver and Toronto to claim they are “residents of Canada for tax purposes” when they are not.

The landmark B.C. decision requires notary public Tony Liu to pay his client more than $600,000 because Liu failed to adequately determine whether the Vancouver house his client was buying for $5.5 million had been owned by a tax resident of Canada.

As a result, the Canada Revenue Agency did not get paid, at the time of the sale, the 25 per cent capital gains tax it charges non-resident sellers of Canadian property on any profit they make on the sale.

So the CRA later demanded the buyer pay the $600,000 in tax. The buyer, in turn, sued Liu, arguing Liu failed to discover the seller was not a tax resident of Canada.

The CRA considers people who don’t live in the country at least six months a year and don’t pay income taxes here to be foreign property investors and speculators and thus subject to capital gains taxes.

Three Canadian immigration lawyers said the CRA tax-residency rule is often not enforced, even in over-heated housing markets in Vancouver and Toronto that are in part fuelled by offshore money.

The ruling published this month by B.C. Supreme Court Justice Kenneth Affleck strikes to the heart of a gaping hole in Canadian tax, immigration and property-transfer law, say the immigration lawyers.

The B.C. decision is a stark warning to real estate agents, notaries and lawyers who fail to ensure that sellers of properties are truly tax residents of Canada, said David Lesperance, a tax and immigration lawyer based in Toronto.

“This truly is a game changer,” said Vancouver immigration lawyer Richard Kurland.

“It’s a precedent. Real estate agents can now get a knock on the door from the taxman, asking for the (capital gains) taxes that should have been collected by Ottawa, because the agent failed to make adequate inquiries.”

Sam Hyman, a Vancouver immigration lawyer, said the judge’s decision alerts purchasers to “the dire consequences” of making offers on properties sold by people who may be trying to avoid capital gains tax by falsely declaring they are tax residents of Canada.

Many buyers and their agents, Hyman said, are not being diligent in making sure the seller is a physical or tax resident of Canada, while others are being “cavalier” or “engaging in wilful blindness” about it.

The immigration lawyers urged the B.C. government to end the “honour system” that leaves it largely up to sellers to state on real-estate-industry forms whether or not they are residents of Canada for tax purposes.  

They said the honour-system loophole could be fixed through Ottawa and Victoria agreeing to the sharing of information among the CRA, the federal Immigration Department and the arm of the B.C. government responsible for property sales.

The B.C. Liberals, Kurland said, have stubbornly refused to solve the costly problem by reforming the government’s property-transfer forms to require sellers to answer whether they are “a tax resident of Canada.”

The B.C. government, which last summer brought in a 15 per cent tax on foreign buyers to cool Metro Vancouver’s globalized real estate market, recently began to ask property sellers and buyers to answer, “What is your citizenship?”

But citizenship is irrelevant, Kurland said.

The issue that really matters to most Canadians and the CRA, he said, is tax residency, whether a home buyer or seller pays their fair share of taxes in this country.

All three lawyers say Canada is forgoing hundreds of millions of dollars in tax revenue by not enforcing the country’s tax-residency rules, which are designed in theory to give long-term residents an advantage over foreign nationals.

The lawyers said they hope the federal government – which this week pledged to “target high-risk international tax and abusive tax-avoidance cases” – will make it a priority for CRA to audit mansion owners who pay little or no income taxes.

It would be relatively easy for the CRA, Lesperance said, to conduct “lifestyle audits” on wealthy trans-national “astronauts,” also known as “ghosts,” who pay little or no income tax in Canada while financing family members to spend lavishly on expensive homes and cars in the country.

In some cases, Kurland said, dubious immigration professionals are advising clients they can “eat their cake and have it too.”

Some property owners, for instance, are claiming to real estate officials that they are Canadian residents, so they can avoid capital gains taxes while selling houses and qualify for permanent resident status.

But some of the same people, at the same time, are claiming to the CRA that they are not residents under our tax law, so they don’t have to declare their global income and property holdings, and pay income taxes on them in Canada.

© 2017 Postmedia Network Inc.



B.C. Supreme Court decision could shake up real estate market


Landmark B.C. court ruling will shake real-estate industry

Douglas Todd
The Vancouver Sun

 

A B.C. Supreme Court ruling will send shock waves through the arm of the Canadian real-estate market that is powered by foreign capital, say immigration lawyers.

The ruling targets a weakness in Canadian laws that often leads foreign owners of real estate in cites such as Metro Vancouver and Toronto to claim they are “residents of Canada for tax purposes” when they are not.

The landmark B.C. decision requires notary public Tony Liu to pay his client more than $600,000 because Liu failed to adequately determine whether the Vancouver house his client was buying for $5.5 million had been owned by a tax resident of Canada.

As a result, the Canada Revenue Agency did not get paid, at the time of the sale, the 25 per cent capital gains tax it charges non-resident sellers of Canadian property on any profit they make on the sale.

So the CRA later demanded the buyer pay the $600,000 in tax. The buyer, in turn, sued Liu, arguing Liu failed to discover the seller was not a tax resident of Canada.

The CRA considers people who don’t live in the country at least six months a year and don’t pay income taxes here to be foreign property investors and speculators and thus subject to capital gains taxes.

Three Canadian immigration lawyers said the CRA tax-residency rule is often not enforced, even in over-heated housing markets in Vancouver and Toronto that are in part fuelled by offshore money.

The ruling published this month by B.C. Supreme Court Justice Kenneth Affleck strikes to the heart of a gaping hole in Canadian tax, immigration and property-transfer law, say the immigration lawyers.

The B.C. decision is a stark warning to real estate agents, notaries and lawyers who fail to ensure that sellers of properties are truly tax residents of Canada, said David Lesperance, a tax and immigration lawyer based in Toronto.

“This truly is a game changer,” said Vancouver immigration lawyer Richard Kurland.

“It’s a precedent. Real estate agents can now get a knock on the door from the taxman, asking for the (capital gains) taxes that should have been collected by Ottawa, because the agent failed to make adequate inquiries.”

Sam Hyman, a Vancouver immigration lawyer, said the judge’s decision alerts purchasers to “the dire consequences” of making offers on properties sold by people who may be trying to avoid capital gains tax by falsely declaring they are tax residents of Canada.

Many buyers and their agents, Hyman said, are not being diligent in making sure the seller is a physical or tax resident of Canada, while others are being “cavalier” or “engaging in wilful blindness” about it.

The immigration lawyers urged the B.C. government to end the “honour system” that leaves it largely up to sellers to state on real-estate-industry forms whether or not they are residents of Canada for tax purposes.  

They said the honour-system loophole could be fixed through Ottawa and Victoria agreeing to the sharing of information among the CRA, the federal Immigration Department and the arm of the B.C. government responsible for property sales.

The B.C. Liberals, Kurland said, have stubbornly refused to solve the costly problem by reforming the government’s property-transfer forms to require sellers to answer whether they are “a tax resident of Canada.”

The B.C. government, which last summer brought in a 15 per cent tax on foreign buyers to cool Metro Vancouver’s globalized real estate market, recently began to ask property sellers and buyers to answer, “What is your citizenship?”

But citizenship is irrelevant, Kurland said.

The issue that really matters to most Canadians and the CRA, he said, is tax residency, whether a home buyer or seller pays their fair share of taxes in this country.

All three lawyers say Canada is forgoing hundreds of millions of dollars in tax revenue by not enforcing the country’s tax-residency rules, which are designed in theory to give long-term residents an advantage over foreign nationals.

The lawyers said they hope the federal government – which this week pledged to “target high-risk international tax and abusive tax-avoidance cases” – will make it a priority for CRA to audit mansion owners who pay little or no income taxes.

It would be relatively easy for the CRA, Lesperance said, to conduct “lifestyle audits” on wealthy trans-national “astronauts,” also known as “ghosts,” who pay little or no income tax in Canada while financing family members to spend lavishly on expensive homes and cars in the country.

In some cases, Kurland said, dubious immigration professionals are advising clients they can “eat their cake and have it too.”

Some property owners, for instance, are claiming to real estate officials that they are Canadian residents, so they can avoid capital gains taxes while selling houses and qualify for permanent resident status.

But some of the same people, at the same time, are claiming to the CRA that they are not residents under our tax law, so they don’t have to declare their global income and property holdings, and pay income taxes on them in Canada.

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