Category Archives: General Posts

The New Foreign Buyer Tax – Unintended Consequences?

Sep
23
2016

vancouver-false-creek-mountains

 

Controversy continues to surround the August 2 introduction of a tax that increases the cost to foreign nationals buying real estate in the Lower Mainland of BC.

Most recently is the launch of a class-action lawsuit based on numerous grounds including the breach of 32 international treaties. If (as under the North American Free Trade Agreement, or NAFTA) Canada, the United States and Mexico have agreed for the free movement of certain professionals and skilled workers between their respective countries, the question being raised is how legislation can treat these workers differently than citizens of the country in which they are working.

A class action is a long and protracted process but is usually launched after a rigorous legal review as law firms leading a class-action suit usually only make money if the suit is successful. And, being lawyers, they tend to be a bit risk-averse. So although, I am not a litigation lawyer, I suspect there are some compelling arguments as to the legality of the tax.

But aside from this, what are the issues raised by the new tax?

The Big Problem

First and foremost was the failure to grandfather existing contracts. The concept of “grandfathering” means that existing contracts would not have been affected by the tax; only ones entered into after the announcement. The polls clearly indicate that most people support a tax on foreign buyers as there is consensus that foreign buyers represent one of a multitude of factors that impact the cost of real estate.

The problem with polls is they often don’t delve deeply into the issue. The media has provided information on a multitude of circumstances where an individual, couple or family are being significantly impacted. As a result there is a growing recognition that the failure to grandfather is patently unfair and many have commented that it is just not the way Canadians should treat people. The tax does, however, raise a bunch of money quickly to back government announcements about funding affordable housing initiatives.

And who are these “people” who are being impacted? There certainly are foreign buyers who want to just park their money in a safe haven – and, as we all know, many of these are from China and their situation tends to dominate our local media.

The Other Key Flaw

But there is another group affected, and this group raises what I believe is the second major flaw in the legislation. British Columbia reaches out to the world to encourage professional and skilled workers to come to the Lower Mainland. They may come from anywhere in the world, including China. These are cancer researchers, educators, computer programmers, consultants and a myriad of other individuals that we are asking to come here and help build centers of excellence or manage and work on projects where we simply do not have sufficiently trained individuals.

Why would we on the one hand ask them to come here and on the other hand penalize them? If they are paying taxes, engaged in our communities and raising their families surely they should be exempted from the tax. Perhaps the simple solution is to exempt those with work permits for at least two years.

As with all things, this too shall pass. It is just unfortunate that the government failed to empathize with those who had existing contracts. Finding an extra $150,000 where a buyer had already entered into a contract is a challenge. Most buyers usually stretch to the limit of their financial resources. So stay tuned for even more sad stories where buyers are sued for failing to complete their purchases.

Source – http://www.rew.ca

Engel&Völkers, Vancouver

Dec
3
2015

I am very happy to announce that as and from Dec 1st 2015, the Carros Group will be moving affiliations from Sotheby’s to Engel & Völkers. I have decided to stay with the office and location that provides me with the best location, the most energy and momentum. This will help me to continue to establish my brand in order to help my clients, to the best of my ability.

E&V Vancouver

My new Promotional Video

Oct
27
2015

One of the reasons that I became a Realtor is because I love meeting and helping people with what will probably be the biggest transaction of their lives – buying or selling their home. Your listing will leverage my managed social media promotion, where I rank as the #1 Metro Vancouver Realtor for social media interaction and usually within the top 10 for Canada wide Realtors – as well as being accessible and promoted via this website, my brokerage website, MLS public sites and my location specific or building specific websites.

I look forward to sharing a cup of coffee with you, a chat about your property and to working with you soon!

iPhone and Android App’s now available

Mar
14
2015

I have been working on an iPhone and Android app, the first version is now available in the iTunes App Store or Google Play. As this is my first attempt (quite the process, made much easier by Good Barber), I gratefully accept constructive criticism!
itunes

Please let me know if you have trouble downloading, installing and watch out for updates which will be coming soon – added content, maps, mortgage calculators etc.

Please click below to download based on your mobile device:

 

Sold in the Gallery building on Richards

Mar
6
2015

Sold in the GalleryCongratulations to my buyers at the Gallery building – I am sure that your daughter will be very happy! Click here for details

THIS HAS TO BE THE SWEETEST SUITE IN THE DOWNTOWN AREA. PERFECT FOR SINGLE PERSON WORKING IN THE AREA OR A STUDENT. THIS ONE BEDROOM CONSISTS OF BEDROOM, LIVING SPACE, KITCHEN WITH STAINLESS APPLIANCES, GAS RANGE, INSUITE LAUNDRY AND BATHROOM WITH NEW COUNTER AND A LARGE SOAKER TUB. THERE IS ALSO A DEN THAT WOULD WORK AS A STUDY ROOM OR DINING ROOM OR A FABULOUS WALK IN CLOSET! THE OPTIONS ARE ENDLESS. LARGE STORAGE DOWN. GREAT BUILDING WITH PARTY ROOM, CONFERENCE ROOM AND LARGE EXERCISE AREA.

Just Sold at the Grace Residences, Yaletown.

Dec
3
2014

 

Delighted for my clients, both sellers and buyers!

“We listed our condo in the Grace in Yaletown with Harry Kramm for a number of reasons. Firstly, we wanted a realtor who would represent the value of living in Yaletown & Harry lives in the neighbourhood. Secondly, we were confident Harry would be able to truly present our home utilizing his skills and abilities to create a marketing plan and build a website that was second to none. Thirdly, we wanted our real estate agent to work diligently on our behalf, be available and a good communicator. Harry was successful on all fronts. We are completely satisfied with his ‘work ethic’ on our behalf, and we are pleased to be able to highly recommend Harry.”

Paul & Catherine, Furry Creek, B.C.

Sold
 

 

10-Step Guide to Buying a House

Jul
30
2014

1. Are You Ready to Become a Homeowner?
Whether you’re becoming a homeowner for the first time or you’re a repeat buyer, buying a house is a financial and emotional decision that requires the experience and support of a team of reliable professionals. Read More>

2. Get a REALTOR®
In the maze of forms, financing, inspections, marketing, pricing and negotiating, it makes sense to work with professionals who know the community and much more. Those professionals are the local REALTORS® who serve your area. Read More>

3. Get a Mortgage Pre-approval
Most first-time buyers need to finance their home purchase, and a consultation with a mortgage lender is a crucial step in the process. Find out how much you can afford before you begin your home search. Read More>

4. Look at Homes
A quick search on realtor.com® will bring up thousands of homes for sale. Educating yourself on your local market and working with an experienced REALTOR® can help you narrow your priorities and make an informed decision about which home to choose. Read More>

5. Choose a Home
While no one can know for sure what will happen to housing values, if you choose to buy a home that meets your needs and priorities, you’ll be happy living in it for years to come. Read More>

6. Get Funding
The cost of financing your home purchase is usually greater than the price of the home itself (after interest, closing costs and taxes are added). Get as much information as possible regarding your mortgage options and other costs. Read More>

7. Make an Offer
While much attention is paid to the asking price of a home, a proposal to buy includes both the price and terms. In some cases, terms can represent thousands of dollars in additional value – or additional costs – for buyers. Read More>

8. Get Insurance
No sensible car owner would drive without insurance, so it figures that no homeowner should be without insurance, either. Real estate insurance protects owners in the event of catastrophe. If something goes wrong, insurance can be the bargain of a lifetime. Read More>

9. Closing
The closing process, which in different parts of the country is also known as “settlement” or “escrow”, is increasingly computerized and automated. In practice, closings bring together a variety of parties who are part of the real estate transaction. Read More>

10. What’s Next?
You’ve done it. You’ve looked at properties, made an offer, obtained financing and gone to closing. The home is yours. Is there any more to the home buying process? Whether you’re a first-time buyer or a repeat buyer, you’ll want to take several more steps. Read More>

 

 

 

Whilst the above article is geared primarily for the US market, most of the tips/links would relate to the Canadian market. Source is Realtor.com with the “Read More” links landing at the corresponding Realtor.com webpage.

 

 

 

 

 

 

Ireland Housing “Bubble”?

Jul
7
2014

Being an Irishman, born and raised in Rathfarnham, Dublin and since 2000, living and working in Vancouver Canada, I like to keep up with the markets in Ireland……. The following is an article that was in the Financial Times.

“Ireland house prices raise fears of a new bubble”

No 36 Burford Drive might be any family’s ideal home. With its five bedrooms, three and a half bathrooms, and high-quality kitchen, this terraced house in landscaped grounds on the site of a former golf club in the Dublin suburb of Dun Laoghaire was attracting strong interest from potential buyers one recent Sunday afternoon.

Six months ago, homes in this new development sold for just under €600,000. Now the asking price is 10 per cent higher. Yet potential buyers appear unfazed. “It is cheaper than the house we live in,” says Mark Cheesmore, a 51-year-old telecoms engineer who is viewing the house with his wife Emer and their eight-year-old son Liam.

A few miles away, in the suburb of Rathfarnham, the rise in Dublin house prices in the past few months is even more visible. At Stocking Wood, a development of new houses off the M50 motorway, prices have risen from €429,000 in March to €489,000 for the latest phase to come to the market.

If any country should have a nose for an incipient house price bubble, it is Ireland. Between 2008 and 2010, it experienced one of the world’s most spectacular property price crashes. From the peak in 2007 to the trough in 2011/12, house values collapsed by 60 to 65 per cent.

The turnround is eye-catching. According to the Central Statistics Office, residential house prices in Dublin rose 22 per cent in the year to May. The last time Irish house prices were rising so fast was between 2002 and 2005, the years immediately before the crash. This is sparking talks of a new price bubble – mostly, so far, around the dinner table.

Still, says Mark Fitzgerald, chief executive of Sherry Fitzgerald, an estate agents: “Even if prices are up 20 per cent they are still 40 to 50 per cent below where they were.” As the economist Dan O’Brien observed in a newspaper column recently, the price crash has been so traumatising that “we have gone from being blasé about the risks of property price increases in the pre- 2007 period to being paranoid about them now.”

PreviewSnap003Ireland’s property bubble in the 2000s was caused by a mix of speculative building, cheap development and mortgage finance, competitive lending by banks, and perverse incentives to keep the property market buoyant because tax revenues depended on it. None of these factors is present today.

The latest round of property price inflation is being driven, experts say, by the legacy that the unwinding of the bubble has bequeathed. The most obvious toxic legacy is a shortage of supply. Hubert Fitzpatrick, director of housing at the Construction Industry Federation, says only about 1,800 new residential units will be brought to the market in Dublin this year, compared with “sustainable demand” for 8,000.

PreviewSnap002The main reason for this, he says, is lack of access to development finance. In the boom years, Irish banks fell over themselves to lend 100 per cent of a project’s cost to property developers. Seared by the collapse, they now grudgingly hand over 60 per cent, at most. Developers must put up the other 40 per cent themselves – and it is not easy to find. The result is an imbalance between supply and demand the likes of which Dublin may not have witnessed before. Says Ken MacDonald, managing director of Hooke & MacDonald, an estate agency: “I’ve been through a lot of cycles since 1965, and I have never seen such a disparity. I don’t see it getting into any kind of balance for another three or four years.”

The risk for Ireland is that this will give plenty of time for the current price inflation to become bubblier. The government says it is determined not to allow this to happen again. And yet its critics charge that it may be no more immune to perverse property market incentives than its predecessors, given the economic, social and political significance of home ownership in the Irish psyche.

PreviewSnap001In May, ministers outlined a strategy for the recovery of the Irish construction sector. Not only would there be more homes built; they would be better than the dross the speculative bubble often delivered. That initiative, however, contained a mini version of the UK’s controversial Help to Buy scheme, offering mortgage insurance guarantees to first-time buyers.

The scheme is arguably too modest to inflate prices much. As Ronan Lyons, an economist and housing market expert at Trinity College Dublin, says: “Bubbles don’t happen overnight.” Nevertheless, he cautions, rising prices contain their own logic. “Prices are rising as a result of supply shortages. The longer that remains the case, the higher prices will go.”

Source – http://www.ft.com/intl/cms/s/0/96d5b868-fc81-11e3-98b8-00144feab7de.html#axzz36p0LwwB6

An Overview of Buying Costs

Jun
19
2014

 

 

 

 

 

 

 

 

 

Mortgage application
Lenders may charge a mortgage application fee, which will vary depending on the lending institution.

Mortgage insurance
The federal government requires high-ratio mortgages (with less than 20% down payment) to be insured against default. The cost ranges between 1.25 to 3.75 per cent of the mortgage amount which is added to the mortgage principal.

Appraisal fees
Before your lender approves your mortgage, you may be required to have an appraisal done. Sometimes your lender will cover this cost, if not, you are responsible. The fee ranges and is typically as much as $300.

Land survey fees
Lenders may require a survey of the property. Survey costs vary.

Home inspection fees
A home inspection is a report on the condition of the home that can alert you to any potential issues such as structural and moisture problems, as well as electrical, plumbing, roofing and insulation. Fees can range from $500 – $700 depending on the size of the home and the complexity of the inspection. Some inspectors have surcharges for a secondary suite, a crawlspace, over even an older home.

Goods and Services Tax (GST)
A GST rebate equivalent to 36% of the GST paid is available for new homes priced up to $350,000 and a partial rebate on new homes priced up to $450,000.

Buyers will also pay the GST if payable on services such as appraisals and home inspections and survey fees.

Provincial Sales Tax
The PST is generally not payable on services except for legal and notary fees. Both the GST and PST are paid on legal and notary fees.

2% BC Transition Tax
This is a new tax coming into effect on April 1, 2013. It applies to the sale of new residential homes that are 10% or more complete on April 1, 2013, with ownership or possession occurring on or after April 1, 2013 and before April 1, 2015.

Property Transfer Tax
Payable at the time the property is registered at the Land Titles office. The rate is 1% per cent on the first $200,000 and 2% on the remainder. There is a rebate for qualifying first-time buyers of homes priced up to $425,000 and a proportional rebate for homes priced up to $450,000. The PTT on a $500,000 home is $8,000.

Property taxes
Some lenders require property buyers to add property tax installments to monthly mortgage payments.

Pre-paid property taxes or utility bills
A buyer typically is required to reimburse the seller for any prepayments.

Mortgage life insurance
If the owner dies, this type of insurance will pay off the balance owing on their mortgage.

Fire and liability insurance
Most lenders require property buyers to carry fire and extended coverage insurance and liability insurance.

Home insurance
Buyers will a mortgage will be required to buy home insurance. To be safe, make the insurance effective on the earlier of either the completion date or the date that you pay the balance of the funds in trust.

Most lenders also require property buyers to carry fire and extended coverage insurance and liability insurance.

Legal or Notary Public fees
Legal or notary public fees and expenses will likely apply to assist with drafting documents and ensuring the title of the home is transferred properly and without incident.

Moving fees
Moving fees vary depending on the distance moved and whether professional movers do all of the packing. Rates vary.

 

 

Source – http://www.rebgv.org/buying-costs