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Budget recognizes economic importance of housing to stimulate the economy

UPDATE ON THE MARKETS: Budget recognizes economic importance of housing to stimulate the economy - (from Realtor Edge, March 2009)

The Federal Budget 2009 introduced several incentives to get Canadians spending by buying a first time home, or renovating the one they are already in. But do the government measures go far enough and will they help to spur the real estate market?


“At first blush, the incentives related to housing seem very positive,” says 2008 OREA President, Gerry Weir. “However, we shouldn’t expect to see these programs stimulate the economy immediately like people hope they will. We are probably looking at two to three years before we see the benefits.”


As for the 2009 budget in general, Weir says the billions of dollars the government plans to spend on municipal infrastructure will likely do volumes to create jobs and boost the economy. “We are grateful that the government recognizes that the housing industry moves the economy, but we must have consumer confidence. Job creation and low interest rates will help people – especially first time buyers – feel secure about buying a home,” says Weir. “Then we will also see people spending more on renovations.”


RRSP Home Buyers Plan changed
The changes to the RRSP Home Buyers Plan introduced in the new budget are not only good for potential home buyers, they are also seen as a victory for OREA and CREA. “It’s gratifying to see that our lobbying efforts at the national level for enhancements to this program have paid off,” says Weir.


The 2009 budget increases the withdrawal limit for the RRSP Home Buyers Plan to$25,000 from $20,000 providing first-time home buyers with additional access to savings to purchase or build ahome.


The eligibility and repayment rules remain pretty much the same. The money withdrawn from the RRSP must be repaid over a period of no more than 15 years to retain its tax deferred status. The repayment period starts the second year following the year the first withdrawals were made. If a participant pays less than the scheduled annual payments, the amount that they don’t repay must be reported as income on their tax return for that year.


For example, in October 2009 a first time buyer withdraws $24,000 from his or her RRSP to finance the purchase of a home. Their first annual repayment of $1,600 ($24,000 divided by 15 years) is due by December 31, 2011.


Buyers get a tax credit
For 2009 and subsequent years, the budget also introduced a new non-refundable tax credit to helpfirst-time home buyers with some of their closing costs. This Home Buyer Tax Credit (HBTC) will provide up to $750 in tax relief on the purchase of a first home. The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009, the credit will be $750.


To qualify for the HBTC, an individual must purchase a qualifying home and neither the homebuyer or the homebuyer’s spouse or common-law partner can have owned and lived in another home in the year of purchase or any of the four preceding years.


A qualifying home is a housing unit located in Canada including 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 the individual to possess and gives an equity interest in a housing unit also qualifies. However, a share that only provides a right to tenancy in the housing unit does not qualify.


Grants for eco-friendly upgrades
The eco-ENERGY Retrofit program provides home and property owners with grants of up to $5,000 to offset the costs of making energy-efficiency improvements. Grants apply to a variety of measures that reduce energy consumption – anything from increasing insulation to upgrading a furnace. Building on the success of the existing program, Budget 2009 provides an additional $300 million over two years to the ecoENERGY Retrofit program to support an estimated 200,000 additional home retrofits.


Home Renovation Tax Credit
The proposed Home Renovation Tax Credit (HRTC) will provide a temporary 15 per cent income tax credit on eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010. The credit may be claimed for the 2009 taxation year on the portion of eligible expenditures exceeding $1,000, but not more than $10,000, and will provide up to $1,350 in tax relief.


For more information on all of the home ownership and housing related stimulus in Budget 2009, go to or to the Canada Revenue Agency Web site at and search for “Home Buyers Plan.”


What’s eligible and what’s not for the Home Renovation Tax Credit?
The federal government hopes the Home Renovation Tax Credit (HRTC) will get Canadians spending now to help create jobs in industries typically hurt by an economic downturn. Now through January 31, 2010, homeowners can claim a tax credit for 15 per cent of renovation expenses between $1,000 and $10,000. Here’s a sample of what qualifies under the program and what does not.



•· renovating a kitchen, bathroom or basement

•· new carpet or hardwood floors

•· building an addition, deck, fence or retaining wall

•· a new furnace or water heater

•· painting the interior or exterior of a house

•· resurfacing a driveway

•· laying new sod



•· purchase of furniture and appliances (e.g. refrigerator, stove, and couch)

•· purchase of tools

•· carpet cleaning

•· maintenance contracts (e.g. furnace cleaning, snow removal, lawn care, and pool cleaning)


(C). The Next Hot Hoods - (Article by Bert Archer in March2009 Toronto Life Magazine) - Agents and analysts agree: these three enclaves show early signs of gentrification, promise big returns and are simply great places to live


Danforth Village


Just east of Greektown, this neighbourhood of semis and solid 50s bungalows has remained dirt cheap largely due to its mixed reputation. But the crack houses have been cleared out, and listings on some streets are selling lightning fastbetween 10 and 16 days. The reasons? For one, properties are priced right (in the low $400,000s, and theyre going for between 97 and 99 per cent of asking). A bigger factor is the multicultural mix (Greek, Chinese and Middle Eastern), which ensures this is a welcoming destination for recent immigrants. What in other parts of town is called the synagogue effect is already taking hold here: the Madina mosque at Danforth and Donlandsa magnet for Indians, Pakistanis and Somalisis undergoing a $4million expansion into a 25,000-square-foot edifice with an 86-foot minaret. Ultimately, the neighbourhoods rise is guaranteed as the forces of gentrification close in from the west and south.



Butting up against the Mississauga sign in the far west of the city is this swath of pretty houses; the area was 19th-century Toronto’s cottage country. Upwardly mobile young couples are discovering that the house prices are not only low, but stable. At the end of 2008, the median house price in this area was $355,000, compared to $362,000 for the same period in 2007, and the average time it’s been taking a house to sell is 37 days (lower than the Toronto average of 41). Even sales of the multi­million-dollar houses along Lake Promenade are a good bet to stay strong—a case of high demand. The Lake Shore Boulevard strip looks suspiciously like the Junction end of Dundas West did about five years ago, before the organic groceries and fair-trade cafés moved in. The anchors of the neighbourhood are Mike Malik’s menu-less Al Lago Ristorante (he’ll cook whatever you like, as long as he has the ingredients) and the Polish deli Karpaty Markets. In addition to the 24-hour streetcar line, there’s also a GO station here, so Long Branchers are conveniently linked to both downtown and the 905. The best part: you’re never more than a 10-minute walk from the lake.




The leafy expanse at the eastern reaches of Scarborough is known to downtownersif they know it at allas the first Via stop on the way to Ottawa or Montreal. Just like Long Branch, Guildwood was spared the bidding war insanity of the boom, which means that its also not experiencing the price-drop aftermath. Statistically, Guildwood looks like it declined; TREB data indicates values are down 13 per cent. But the figure is skewed by the sale of a single $2-million house in the last quarter of 2007. Factor that palace out, and Guildwood values remain consistent from 2007 to 2008 (with an increase from 2006 of 15 per cent). Young couples who despaired of ever being able to own anything within the city limits are moving in and lending this collection of modestly elegant 1950s and 60s side- and backsplits a quiet cachet. Theres a lot to brag about: the Guild and its architectural sculpture park; the Bluffs; and GO at its doorstep. Though theres no cheese boutique on the horizon, nor even a commercial strip to house one, John and Kay Parks Cornerstone Bakery Café, at the Guildwood Village Shopping Centre, serves as the neighbourhoods lively hub.

Posted on Wednesday, March 18, 2009 at 02:30PM by Registered CommenterElaine in , | CommentsPost a Comment

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