February 28, 2014

Effective May 1st, 2014, CMHC mortgage loan insurance premiums will be increasing. This change will affect:

• Owner-occupied homeowner;
• Self-employed homeowner; and
• 1 to 4 unit rental properties.

How much will this affect you? On average, the increased premiums will equate to an approximate $5 increase in monthly mortgage payments - so not very much at all. The premium increases are also not expected to have any material impact on the Canadian housing market.

If you'd prefer to save the extra $5 per month, get your mortgage application in before May 1st, 2014 with one of my Preferred Mortgage Specialists. Call or email today.

*Special thanks to Randy Chin of RBC for notifying me of this announcment.

*This post made with information referenced from today's CMHC release.

Government reduces tax burden on first-time buyers

First-time home buyers received some welcome news in today’s provincial budget.

The Liberal Government announced, effective February 19th, 2014, qualifying first-time buyers can buy a home worth up to $475,000 under the Property Transfer Tax (PTT) First-Time Home Buyers’ Exemption program. This is a significant increase where the previous threshold was $425,000.

In addition, homes priced $475,000 to $500,000 qualify for the continuiing partial exemption falling more in-line with B.C.'s housing prices, most notably in Metro Vancouver.

With this change, the government estimates 1,700 additional first-time buyers will annually be eligible to save up to $7,500 in PTT when buying their home.

These new exemptions are estimated to cost $8 million in lost tax revenue each year.

Together with BC Real Estate Association, the BC Real Estate Board has actively lobbied to make home ownership more affordable for first-time homebuyers. The increased limits in the threshold indicate these lobbying efforts on behalf of the public have paid off. Note that in 2008, as a result of industry lobbying, the provincial government increased the threshold to $425,000 from $375,000. And, in 2005, the government increased the threshold to $325,000 from $275,000.

The PTT is calculated at a rate of one per cent on the first $200,000 and two per cent on the remaining value of the purchase price.

Find out how the new exemption limits affect you by contacting me today at bob@bobsethi.com. 

For more on the Budget, http://www.bcbudget.gov.bc.ca/2014/default.htm

Based on reporting from the real estate board of greater vancouver.