How Your House Qualifies as Principal Residence to Avoid Capital Gain Tax on Sale (Important question from investment standpoint)?
A property qualifies as your principal residence In Canada for any year if it meets all of the following four (4) conditions:
1. It is a housing unit, a leasehold interest in a housing unit, or a share of the capital stock of a co operative housing corporation you acquire only to get the right to inhabit a housing unit.
2. You own the property alone or jointly with another person.
3. You, your current or former spouse or common-law partner, or any of your children lived in it at some time during the year.
4. You designate the property as your principal residence (Form T2091(IND).
The land on which your home is located can be part of your principal residence. Usually, the amount of land that you can consider as part of your principal residence is limited to 1/2 hectare (5,000 square meters), which converts to about 1.24 acres (53,819 square feet). Since these requirements are based by CRA guidelines. If you have further questions or need clarifications, you should speak directly to Canada Revenue agency or your Accountant.
HOW TO PREPARE YOUR HOME FOR SALE!
However You do not have to pay a professional if you know what you are doing or simply follow these steps!
1) Get rid of Clutter:
The very first thing you want to do when staging your house is to get rid of anything that is not a necessity. This includes toys, decorations and even furniture. The more cluttered and disorganized your home looks, the less likely your potential buyers will find it appealing. They want to walk into a place that looks like a showroom. Buyers want to imagine it with their belongings and their style. This does not work if they are tripping over toys and bumping into excess furniture.
2) Paint the House in Neutral Color:
Buyers also want to picture the house in their own colors. It is almost guaranteed that a buyer will change the paint colors to suit their own decorating needs. This may leave you believing that you can leave up that bright red paint because it will get changed anyway. That is not the case. You want to repaint your home with neutral colors if possible. Bright colors detract from the look of the house to the buyer. It makes it appear difficult to repaint. Neutral colors give the room a warm feeling and allow the buyer to imagine it with any color they choose.
3) Make the House Spotless:
You cannot clean too much before showing your house. Cracks, crevices and even closets need to be cleaned. Your buyers will be looking at every corner of your house. This means that those corners should be spotless. Messiness takes away from the beauty of the house. Instead they will be looking at your mess.
4) Organize the Stuff:
Take some time to enhance the features that come with your home. If you have a spectacular bathroom with a Jacuzzi tub then spend some extra time making that space stand out. If your closets are walk-in and very attractive then organize them so that they are twice as appealing. Place special coverings over large picture windows and paint the mantle over the fireplace. Stain the deck out back and add some extra touches to showcase your beautiful landscaping. All of this will pay off in the end.
5) Add some extra Spice:
Go through your home and add some extra decorative touches. Once you have removed everything that is not needed you can add things that make the room stand out. A nice rug might add that spark that the living area needs. Little touches can go a long way to impressing the right buyer.
6) House Showings:
Once you have the house ready for buyers you want to begin scheduling your showings. Make sure that you arrange them during times when you can have everyone else gone. This gives the realtor and the buyer time to explore the home without pressure from the family that is sitting there watching. It also keeps any potential problems away from the buyer.
Learning how to prepare your houses for sale is not difficult. You just want to place yourself in the position of the buyer. What would Buyer like to see? Simple, Clean and Decorative will usually be the answer.
STOP PAYING RENT
How to become a HomeOwner rather than a Home-Renter!
From basement suite to house and condo, renting is a huge business in Mississauga as in other areas of GTA. If you currently rent, you know that paying out those hundreds of dollars every month to line the pockets of your landlord is not a pleasant task. However, like most renters you probably feel stuck in a home that isn't even yours simply because you can't save up that down payment for your own home.
This guide contains details on how you can stop paying rent and start contributing to your own financial future, rather than that of your landlord. By knowing some valuable information about the real estate industry, as well as some tips and tricks about property ownership, you should be able to start on the road from renting to owning. This blog will tell you how you can:
-Save for a down payment for your property
-Make best use of your financial institution, and other loan sources
-Consider reversing the rental roles
7 Little-known Facts That Can Help You Purchase Your First Home
Purchasing your first home can be challenging. Your monthly cash flow may easily cover the proposed mortgage costs, but perhaps accumulating the down payment is what you find difficult. Or maybe you have financial reserves, but cash flow is what's holding you back. Whatever the reasons, purchasing a new property can still be accomplished, regardless of your financial standing. Consider the following facts:
The down payment on your property doesn't have to be as large as you think:
Several programs exist to help first-time buyers enter the property market. These programs require that you have never purchased a home before, and that you meet basic qualification standards. It is important that you consult a professional real estate agent like me who is familiar with these programs, so that you may make best use of them.
In some areas it is also possible to assume a mortgage. If this is an option in your area, your real estate agent will be able to perform search on listings requiring small to no down payments.
Your lender may help you with your down payment and closing costs:
Depending on your financial standing, you may have assets worth equal to or more than your needed down payment. If this is the case, your financial institution may be willing to lend you the extra cash needed for your down payment, while securing it against your assets.
The seller may assist you in purchasing your home:
Some sellers may be willing to lend you money to purchase the home. This is known as a ‘seller take-back' and is essentially a loan from the seller to the buyer. Instead of your monthly mortgage payments going to a financial institution, they would go directly to the seller. This loan works in exactly the same way as any other, and is subject to the rules and regulations outlined upon instantiation.
You may be able to borrow without going into debt:
Options exist for you to borrow for certain investments to a specified level, and using those investments to leverage a significant tax return. This process can be further coupled with a first-time homebuyer's plan, and turned into significant equity.
You can also borrow against savings in an RRSP, and if repaid in a certain time period, avoid any interest payments.
While purchasing, consider becoming a landlord yourself:
If you're interested in subsidizing your mortgage payments with some supplemental income, why not consider becoming a landlord yourself? Houses and condos with extra bedrooms and living facilities are often not much more expensive than those without. If you have been pre-approved for a mortgage that allows you to purchase a larger property, why not consider renting out the extra space and having a tenant pay your mortgage?
You may be able to secure a loan even with a lower credit rating:
Oftentimes it is possible to secure a loan, even with a poor credit rating. If you have enough equity to borrow against, your financial institution may consider lending you money to purchase a home.
It is also possible to use a ‘seller take-back' loan for the purchase, using the seller as the lender.
Secure a mortgage before you begin your searching:
Before you begin looking for a property, you should get pre-approved for a mortgage. It is important to make sure that you know your budget, as well as your monthly payments to make sure that they are within your means. Enlisting the help of a professional mortgage specialist is a good idea when it comes to locating a loan that meets your needs. Oftentimes a professional will be able to locate more competitive mortgage rates than those offered by a single financial institution. There is usually no obligation, and the benefits of knowing your buying power while shopping for your home reduce stress and wasted time.
Where to go from here?
This writting illustrate that you have options other than paying large monthly payments to your landlord. It is clear that with a little creativity and help from my Real Estate experties, you can make the break from renting to owning.
Make sure to consider your options – If you're interested in more information, please contact me at 647-261-9000 or email at IdreesRealty@gmail.com.