The purpose of this post is to give everyone an update of the market statistics from July 2009 along with a look at 2009 overall. On the surface it looks like the economy has changed for the better so I think it’s a good time to look at the numbers. To begin we’re gonna look at the numbers for the entire market and then we will break them down by price range to really get a good idea of what is going on.

The numbers are pretty interesting and even though the underlying feeling lately has been pretty positive the numbers show that the market is down from 2008. One explanation for this could be that the fact that May to August is always the busiest time of the year because most families want to move before School starts. So that means that the outlook was positive because for example when you look at the production in July compared to March, July is higher but that would most likely be the case any other year.

Even though sales are down in London this year we do not have to much too worry about it because here in London home prices are fairly stable. In a good year prices usually go up about 5%, thus in a bad year prices do not go down too much. One of the main reasons as to why prices dropped so much in the U.S. was because places like Florida would have houses raising in value by 30% in one year when nothing really changed in the market. So of course when values are raising at such a high rate for no real reason when the market goes sour they are going to have larger drops in values as well.

These are all general trends but to really get a good idea of what is happening in the market we should look at the activity in each price range. Here is a break down of sales for the July and the year to date in 2009 compared to July and the year to date in 2008.

The numbers here are very interesting overall when we look at the numbers for the year to date; only the lowest price range has had an increase in sales while all the other prices ranges have gone down. It is tough to say for sure why the lowest range has seen an increase in sales as it could be benefitting from government programs geared towards new home buyers. Since prices are down people may see more value then in years past and there may be more power of sales. The sale of each home has so many different factors which determine why, for what price and when a house sells – it isn’t even fair to pin point it to one reason or another.

When we look at July sales broken down by price range again we have some interesting numbers that are not easy to explain. In some of the price ranges (mostly the higher end price) we see an increase compared to last July. Again it is too difficult to assign just one reason for this but one thing we did notice from open houses is that alot of the same people were coming through and waiting for a better deal, which is fine, but if you have decided to move this year, and usually every family with children would like to get into their new home before school starts, how long can you wait? This may have been the month people decided it was time to make a decision. This is just an idea I am positive there are many other reasons why people purchased when they did.

In a couple weeks we will do another update with August Statistics – it will be interesting to see if some of these trends continued. If you have any questions or comments let us know.

Both the federal and provincial governments have come with programs to help ease the financial burden for first time home buyers. Their main reasoning behind these programs is the hope that these programs will entice more young people to purchase their first home improving home sales and in turn improving the economy overall. The purpose of this blog is to look at both options breaking how they work and how they can benefit you.

First-Time Home Buyers’ Tax Credit (HBTC)

This program is the Federal option: It was purposed in the recent federal budget. For 2009 and subsequent years, the budget proposes to introduce a new non-refundable tax credit, based on an amount of $ 5,000, for certain  home buyers that acquire a qualifying home after January 27, 2009.

What Does that Mean for you ?

The key part of that statement is when they say “based on an amount of $ 5,000.” What this means is the credit is not $5,000 but that is the base number they use to calculate the refund. Your next question may be then how do they calculate the rebate? The HBTC is calulated by multiplying the lowest personal income tax rate for the current year. So if we look at this year for example (15% in 2009) by $5,000 equals a rebate of $750.

Who is Eligible for the HBTC?

An individual will qualify for the HBTC if:

• they acquire a qualifying home; and
• neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the year of purchase or any of the four preceding years.

There is an exception to these rules. If you are a person with a disability or are buying a house for a related person with a disability, you do not have to be a first-time home buyer. However, the home must be acquired to enable the person with a disability to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person.

What is a Qualifying Home?

A qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units and apartments in duplexes, triplexes, fourplexes, or apartment buildings, all qualify. A share in a co-operative housing corporation that entitles you to possess and gives you an equity interest in a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.

As well, you or the related person with a disability must intend to occupy the home as a principal place of residence no later than one year after buying it.

If I buy a house, can my spouse or common-law partner claim the HBTC

Either one of you can claim the credit or you can share the credit. However, the total of both your claims cannot exceed $750.

How will I Claim the HBTC?

Beginning with the 2009 personal income tax return, a new line will be incorporated to allow you to claim the credit.

Land Transfer Tax Refund for First-Time Home Buyers

This is the provincial option and this refund is applied to the Land Transfer Tax that everyone is required to pay on all transfers of land in Ontario. Land Tranfer tax is usually about 1.5% of the purchase price of your new home.

How Much is the Refund?

The maximum amount of the refund is $2,000. If the refund is claimed at the time of registration, it may offset the land transfer tax ordinarily payable. If not claimed at registration, the refund may be claimed directly from the Ministry of Revenue. No interest is paid on this refund.

Who Qualifies?

To claim a refund, you:

• must be at least 18 years of age;
• must occupy the home as your principal residence within 9 months of after the date of transfer; and
• cannot have owned a home, or an interest in a home, anywhere in the world.

In addition:

• your spouse can’t have owned a home, or an interest in a home, anywhere in the world while being your spouse; and
• in the case of a newly constructed home, you must be entitled to a Tarion New Home Warranty.

How Do you Apply?

Qualifying taxpayers may claim an immediate refund at the time of registration in one of two ways:

• If registering electronically, by completing the required statements under the explanation tab of the electronic affidavit.
• If registering on paper, by filling an Ontario Land Transfer Tax Refund Affidavit For First-Time Purchasers of Eligible Homes at the Land Registry Office.
• Applications for a refund must be made within 18 months after the date of the transfer.

If you have any other questions about these programs or are ready to make the leap and purchase your first home we are just an email away.