For the 70% of Canadians who own a home, it is a place to live, raise a family, and connects them to their community.

Due to Canada’s tax system’s Principal Residence Exemption, when we sell our homes, any increased value or “capital gains” are not taxed.

 

This tax break matters to Canadian homeowners. Collectively, we have about $3 trillion in home equity and our homes are often our largest financial asset.

However, starting with 2016 income tax returns, there are some changes in how homeowners qualify for the Principal Residence Exemption.

 

Until now, the Canada Revenue Agency has not required Canadians to report on a home sale during a tax season. However, if you sold your home in 2016 or later, you will need to complete a Schedule 3, Capital Gains of the T1 Income Tax and Benefit Return in order to report your sale.

 

The good news is that, in terms of taxes, nothing has changed. The same tax benefit is available to anyone who sells their home, provided the property was the principal residence for every year you owned it – even if you use part of your home for business purposes. There is no “new tax” involved, only a requirement you report the sale details on your tax returns.

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In February 2017, there was a total of 2,425 sales which is a 41.9% decrease from the record 4,172 sales in February 2016 and an 59.2% increase compared to January 2017.

 

The sales in January were 7.7% below the 10-year February sales average for the month.

 

As you can see from the infographic, there is still a relatively strong demand for condos and townhomes. For apartments, there were 2,253 active listings, 1,275 sales, resulting in a sales-to-active listing ratio of 56.6% which is very strong. For townhomes, there were 1,031 active listings, 404 sales, resulting in a sales-to-active listing ratio of 39.2% which indicates a good demand. As for detached homes, there were 4,310 active listings, only 745 sales, resulting in a sales-to-active listing ratio of 17.3%.

 

Though a 17.3% sales-to-active listing ratio is low for the detached market, I still see homes selling quickly with multiple offers if it is priced and marketed well. There is endless supply of overpriced inventory in the detached market with many sellers thinking they can capitalize from the hot market from last year, which is not happening in today’s market.

 

Sales-to-Active Listing Ratio in recent months:
September 24.1%
October 24.4%
November 26.4%
December 27.0%
January 2017 21%
February 2017 39.1%

 

To put it into perspective, a 10-12% or less indicates it is a Buyer's market, 20% or above is a Seller's market, and in between is a balanced market. The highest we have seen was 70% in March 2016.

 

See the detailed report by clicking here 

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The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.