Happy New Year. It's been a chilly start to 2024. The good news is days are getting longer and March 10 (daylight savings) is weeks away. Lots to cover this month. Enjoy the content and feel free to reach out if you have any questions.
Stay warm.
Vacant Home Tax
If you own a property in the city of Toronto, do not forget to file your property declaration by Feb 29, 2004. The city of Toronto has increased the vacant home tax from 1% of assessed value to 3%. For a property assessed at a million dollars, that's $30,000 above and beyond your property tax.
The property is deemed vacant if no one occupies it for over 6 months. This applies to your primary residence, investment property, condo, etc....There are exceptions such as a property undergoing major renovations, death of owner, court order....
To file your declaration, go to: Toronto Vacant Home Declaration
Property Tax
I am sure by now you are aware the city of Toronto is planning to increase property taxes by 10.5% and possibly 16.5% if the Federal Government doesn't cut a cheque for $250 million dollars.
As a Toronto homeowner, there is nothing you can do about the increase. However, if you own an investment property, since the increase is more than 50% of the allowable guideline, you are allowed to file for above the allowable guideline rent increase to the Landlord Tenant Board.
Landlord Tenant Board Above Guideline Rent Increase
City of Toronto Land Transfer Tax
As of Jan 1, 2024 the city of Toronto has modified its portion of land transfer tax (no change to Provincial land transfer tax) for properties of $3 million and above. Previously, 2.5% was the tax for all properties from $2 million and above. Now, it is a sliding tax based on purchase price per the chart below impacting properties $3 million+
Interest Rate Cuts
Inflation for Dec 2023 came in at 3.4% up from November's 3.1%. The trend is in the wrong direction. There has been lots of talk in the media about rate cuts and when that will happen. Until inflation is well within the 2-3% for a few months, I doubt the Bank of Canada will start cutting its benchmark rate. The US inflation came in higher as well for December which is a key indicator as the spread between the US Federal Reserve and Bank of Canada's benchmark rate can't diverge too greatly as it impacts the exchange rate.
So for now.........hold on longer.
Record Year
2023 for the win. Home sales came in at 65,982. The last time we had sales this low was 2001 at 67,612. What goes down, must come up. Look out for the real estate market to pick up activitiy as soon there are hints of interest rate cut by the Bank of Canada.
Next Bank of Canada announcement dates:
January 24
March 6
April 10
June 5
July 24
Sept 4
Oct 23
Dec 11
When? What? How?
It's been a long two years of high interest rates and there is lots of pent up demand on the sidelines. Do you make a move now or wait? Do you buy first or sell first? Short term or long term mortgage? Do you stage or not stage?
Lots to contemplate on how to best navigate this marketplace. Feel free to reach and I am happy to discuss with you different scenarios.