Open Letter to Mayor Of Toronto form Toronto Real Estate Board

Open Letter to Mayor David Miller, City of Toronto >> March 21, 2007 His Worship Mayor David Miller City of Toronto Toronto City Hall 100 Queen Street West Toronto, Ontario M5H 2N2 Open letter regarding potential new home buying tax Dear Mayor Miller, The Toronto Real Estate Board’s (TREB) 25,000 REALTOR(R) members are concerned about possible new municipal taxes that homeowners could face in the City of Toronto. Specifically, a potential Toronto land transfer tax, levied on top of the existing provincial land transfer tax, could have serious consequences. Double Whammy It is important to point out that a Toronto land transfer tax would be levied on top of the existing provincial land transfer tax. Put another way, this would be like telling a consumer that they have to pay the GST twice every time they go to the cash register. As the City’s discussion paper notes, there is limited experience with other municipalities that charge a land transfer tax. However, the City’s discussion paper fails to point out that in some of these municipalities there is no provincial/state land transfer tax, meaning that the homebuyer is not faced with a double whammy of land transfer taxes, as is being considered in Toronto. Significant Cost The existing provincial land transfer tax is already a heavy burden for homebuyers and a Toronto land transfer tax would exacerbate this. For example, the average homebuyer in Toronto already has to pay a provincial land transfer tax of approximately $4,200 (on the averaged priced Toronto home in 2006 based on TREB MLS(R) statistics), in full at the time of closing. This means that a Toronto land transfer tax of 0.5%, as noted in the City’s discussion paper, would mean close to an additional $1900 in land transfer taxes for an average Toronto homebuyer, which represents an additional 45% of land transfer taxes. Even a Toronto land transfer tax of 0.1% would represent close to an additional $400 (a 10% increase) for the average Toronto homebuyer – a significant amount of money at a time when most people can least afford it because of the numerous other expenses (appliances, furniture, renovations) that come with home ownership. Land Transfer Tax = Home Buying Tax Make no mistake, a second land transfer tax is nothing short of a home buying tax. Land transfer taxes are payable, in full, by a homebuyer at the closing of a property transaction and can represent one of the biggest closing costs that homebuyers must deal with. Generally, closing costs equal approximately 1.5% of the purchase price of a property. If the City implements a second land transfer tax of 0.5%, as considered by the City’s discussion paper, this represents a 33% increase in closing costs for Toronto homebuyers. Even a 0.1% Toronto land transfer tax would represent almost a 10% increase in land transfer taxes on the average home. At a time when the City’s population growth is being vastly outpaced by surrounding areas, what kind of message does this type of home buying tax send? Benefit for Cost? Taxpayers have the right to know what benefits they receive from taxes. What added services, from the City, can homebuyers expect for paying a second land transfer tax? If this tax is intended simply to generate general revenue, then the City is discriminating against homebuyers and asking them to fund services that existing residents will benefit from. Property taxes, paid by all, are intended to pay for services that everyone benefits from. “What’s in a name?” However, it is no secret that property taxes are overburdened. This is part of the City’s rationale for considering new taxes. Unfortunately, there is little difference between a property tax and a land transfer tax. Both are taxes on home ownership; both are calculated based on a property’s value; and both impact affordability. We support the City in trying to avoid property tax increases, but isn’t a second land transfer tax just another way to raise taxes on property? Don’t Put the Cart Before the Horse TREB has been a vocal supporter of efforts to convince the provincial and federal governments to provide municipalities with adequate, predictable, and sustainable funding from existing tax sources. Furthermore, TREB has joined municipalities in calling for the uploading of social costs, such as disability and drug benefits, that should not be funded by property taxes. We will continue to support these efforts and we strongly believe that these critical issues must be resolved before Toronto taxpayers are expected to pay any new taxes, let alone a duplicate of one that they are already paying at the provincial level. Contradicts Other City Objectives and Goals The City’s Discussion Paper indicates that requiring homebuyers in Toronto to pay a second land transfer tax would have a “neutral policy impact”. Unfortunately, we believe that there is a distinct possibility for substantial impacts on various City policies, objectives, and goals. Environmental Impact: More Traffic, More Smog Under the new City of Toronto Act and the new Municipal Act, Toronto is the only Ontario municipality with the authority to levy a local land transfer tax on top of the existing provincial land transfer tax. This means that, if Toronto levies a second land transfer tax, the City would be creating a financial incentive for homebuyers to choose to buy a property outside of Toronto’s borders. Recent census data already demonstrates that Toronto is growing at a much slower rate than surrounding municipalities; adding additional costs in Toronto will only exacerbate this trend, meaning more urban sprawl, which means more commuting, more traffic and more smog. Affordability and Intensification The average price of a re-sale home in Toronto in 2006 was approximately $378,000. This makes Toronto one of the most expensive cities in the country to live in. As noted above, a second land transfer tax could add considerable costs for homebuyers. Any increase will reduce Toronto’s affordability, making it more difficult to attract new residents and achieve the intensification goals that the City has laid out in its Official Plan. Economic Impact According to a study conducted by Clayton Research for the Canadian Real Estate Association, each re-sale housing transaction in Ontario generates approximately $27,000 in spin-off spending for things like furniture, appliances, renovations, etc. In recent years, this means that re-sale real estate transactions have contributed more than $2 billion per year to Toronto’s economy. Any impact on Toronto’s real estate market, from a second land transfer tax, will impact the overall economy. Moving Forward: Adequate Consultation I hope you find our views on this issue helpful. This is an unprecedented initiative that requires serious and lengthy public consultations, which we look forward to participating in. As such, we would appreciate an opportunity to meet with you to discuss this issue further. Yours truly, Dorothy Mason President <>For further information: Wendy Craven, Director, Public Relations,
Toronto Real Estate Board, Office: (416) 443-8159, 24-Hour Cell: (416)
277-7390, Email: wcraven@trebnet.com

Information on Rates for Commission Advances

“How Much Does It Cost For A Commission Advance?”

This is the most common question we receive. Guess what our answer is? “80 cents per $1000 per day!”

At that point we’re usually told that Company #2 has quoted them a less expensive rate.

Are they charging less? Or are they charging more?

RealCash charges a flat rate of 80 cents/day/$1000. No Administration Charges, No Hold Back Fees, No Hidden Costs. Why? Because it’s easy and simple!

Here’s an example:

RealCash Bancorp Inc.:
$3000 Purchase Amount – 60+10days
less 80 cents/day/$1000 $168.00
Net Advance $2832.00

Agent repays $3000 after 69 days and receives a $2.40 refund.

Total cost to Agent is $165.60.

Total Advance is $2832.00

Company #2:
$3000 Purchase Amount – 60 days
less 63 cents/day/$1000 $113.40
less admin fee $29.50
less HoldBack (2.5%) $75.00
Net Advance $2782.10

Agent repays $3000 after 69 days and receives a $33.75 refund.

Total cost to Agent is $184.15

Total Advance is $2782.10

HoldBack Fee – Everyone understands that an Agent, let alone a commission advance company, never receives their commission cheque on the day of closing. Obviously Company #2 knows this. Their rate for the days following the closing date jump from 63 cents/day to $1.25/day! That’s a 98% increase. RealCash simply creates a contract that runs 10 days past the closing date with no rate increase. Nothing is hidden.

RealCash’s contracts are straightforward and simple to understand. Our competitors may claim to charge less but as you can see from the above example, it simply is not so.

So, the next time you call Company #2, please don’t just listen to what they are saying because as in most cases, it is what they are not telling you that matters.

Most companies use the line, “Why wait till closing to receive your commission?” Obviously we agree with that philosophy but we add the caveat, “Why wait till closing to find out how much your commission advance really cost you?”

If you have any questions or comments, please feel free to call me at 416.444.7790 and 1.800.265.2694.

Regards,
Karim Kanji
RealCash

KPMG Weekly Newsletter – For the Week Ending March 11th 2007!

March 12, 2007

The following information was obtained from newspaper articles appearing
in the Globe and Mail and the National Post for the week ending
March 11, 2007

Calgary-based Huntingdon REIT will purchase three industrial properties in southern and western Alberta for $19.6-million. The properties, which total 94,960 square feet across six buildings, will be leased back to the seller, Winnipeg-based Leader Energy Services Ltd., for about $2.1-million a year.
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Sunrise Senior Living REIT has been told by an Ontario court judge to stop takeover negotiations with Health Care Property Investors Inc. The court ruled that Sunrise REIT must enforce a standstill agreement signed by HCP on January 14, 2007. In mid-February, HCP said it was prepared to make an offer of $1.4-billion, or as much as $18 a unit. A vote by Sunrise shareholders on Ventas Inc.’s offer of $1.1-billion, or $15 a unit, has been rescheduled for March 30.
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Royal Host REIT reported that annual profit rose 500% to $14.3-million. Profit from continuing operations climbed 155% to $4.7-million and the REIT booked a profit of $8.8-million on the Royal Private Residence Club in Kelowna. Annual revenue increased 3.1% to $144.3-million. Royal Host doubled its cash available for distribution during 2006 to $1.05 a unit, while boosting the payout twice during the year. The distribution was increased again in February to an annual payout of 66 cents a unit.
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Canada’s federal government plans to proceed with the sale of nine buildings in six cities, with the goal of leasing back the space from the purchaser. The buildings that will be put up for sale include 401 Burrard and the Sinclair Centre in Vancouver, the Harry Hays building in Calgary, Canada Place in Edmonton, the Joseph Sheppard Building in Toronto, the Thomas D’Arcy McGee Building and the Skyline Complex in Ottawa, and 305 René Lévesque W. and 4225 Dorchester W. in Montreal.
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MI Developments Inc. reported fourth-quarter profit of US$28.5-million, or US59 cents a share, compared with a loss of US$6.1-million, or a loss of US13 cents, a year ago. The consolidated results included Magna Entertainment Corp.’s added US$12.2-million in income from discontinued operations and a US$7.6-million loss on continuing operations. MI’s core real estate business earned a profit of US$23.3-million, up from US$19-million a year earlier. Real estate revenue rose to US$46.6-million from US$40.3-million. MI’s profit for the year climbed to US$59.9-million, or US$1.24 a share, from US$6.6-million, or US14 cents, in 2005 when MEC contributed about US$63-million in losses.
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Churchill Downs Inc. will purchase a 50% interest in Magna Entertainment Corp.’s Horse Racing TV network. The two firms also have created a joint venture, TrackNet Media Group LLC, which will offer each company’s horseracing content across various distribution and gambling networks.
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Magna Entertainment Corp. reported a loss of US$85.2-million, or US81 cents a share, in 2006, compared with a loss of US$102-million, or US98 cents, in 2005. Revenue increased to US$702.1-million from US$604.4-million.
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Kingswood Capital Corp. is developing the NorthWoods project in North Vancouver, which will have a total of 380,000 square feet of industrial space when fully built in 2009. The NorthWoods development is leasing space for $12.50 to $13.50 a square foot, compared with maximum rates of about $8 a square foot in Burnaby. An additional 135,000 square feet of office and retail space are proposed for two separate parcels. The 9.8-hectare NorthWoods site was purchased several years ago by bcIMC Realty Corp., which owns the NorthWoods Business Park.
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Toronto hotelier Steve Gupta’s Easton’s Group of Companies plans to add six more hotels to its holdings in 2008. Easton’s is currently working on a Hilton Garden Inn in downtown Toronto, near the 256-suite Marriott.
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According to Colliers International, 405,000 square feet of industrial space has been added to the North Vancouver market in the past two years, and all but 25,000 square feet of that has been absorbed. The current industrial vacancy rate is 2.3%, compared with 3% in 1999.
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According to Statistics Canada, the total value of Canadian building permits rose 11.3% to a record high of $6.3-billion in January from December. The value of nonresidential permits climbed 19.3% to a record $2.6-billion, led by gains in industrial and institutional permits in Ontario. Permits for single-family homes set a new record for January of $2.4-billion, on a seasonally adjusted basis. Permits for multifamily homes jumped 27.4% from December.
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According to Statistics Canada, investment in residential construction projects rose 8.5% to a record $79.8-billion in 2006 from 2005. Investment in new housing climbed 9.2% to $40.7-billion, renovation spending increased 8.7% to $32-billion and acquisitions were up 4.1% to $7.1-billion.
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According to Statistics Canada, Canada’s new housing price index had a 10.1% annual increase in January, compared with a 10.7% year over year gain in December. Alberta reported a 40.6% annual increase in January, compared with a 42% gain in December.
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According to Canada Mortgage and Housing Corp., national housing starts fell 21% to 196,200 units in February from 248,500 units in January, on a seasonally adjusted annual basis. Housing starts dropped 32.8% in Ontario, 25.4% in the Prairies, 15.2% in Quebec and 18.6% in British Columbia. Housing starts were down 5.2% in rural and urban areas in the first two months of 2007, compared with January and February in 2006.
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According to Canada Mortgage and Housing Corp., new-home starts in Ontario fell 36% to 51,500 units in February from 76,700 a year earlier. In Toronto, preliminary figures indicate 23,000 starts in February, compared with 39,700 in January. Starts for the first two months of 2007 were down 12% from the same period in 2006.
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According to the Toronto Real Estate Board, sales through the MLS increased to 6,772 homes in February from 6,756 a year earlier. Sales for the first two months of 2007 rose 5% to 11,855 units from 11,270 units in the same period in 2006. The average sale price climbed 4% to $368,687 in 2006. There were 11,880 listings added in February, bringing the total number of active listings to 19,359. The average number of days a home spent on the market was 35.
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According to the Realtors’ Association of Hamilton-Burlington, housing sales fell 10% to 1,071 units in February from a year earlier and sales are down 6% year-to-date. The average price of a single-family home rose 12% to $289,544 from February, 2006.
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Blackstone Group LP is purchasing the owner of Madame Tussauds waxworks museums in a US$1.9-billion transaction that will create the world’s second-largest theme park group. The merged entity will combine Tussauds, Sea Life aquariums, the London Eye Ferris wheel and theme parks in Britain operated by the Tussauds group with Blackstone-owned Legoland and Gardaland theme parks. Dubai International Capital LLC, which purchased Tussauds two years ago, will keep a 20% stake in the merged group.
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Earvin “Magic” Johnson and partner Canyon Capital Realty Advisors will provide US$12.4-million in financing for 130 condominiums in the Greenpoint neighbourhood of Brooklyn. Green Street Development LLC is building the six-story project and the Bank of New York is providing a US$41-million senior loan.

According to the U.S.-based National Association of Realtors, pending sales of existing homes dropped 4.1% in February.
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Novastar Financial Inc. and H&R Block Inc.’s Option One will no longer be making certain loans that finance 100% of a home’s cost. Fremont General Corp. has stopped making subprime loans and exited from the business under pressure from regulators.
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According to the Mortgage Bankers Association, subprime mortgages made up about a fifth of all new mortgages in the U.S. in 2006. About 2% of subprime mortgages made in 2006 were more than 60 days late after five months, almost twice the rate for mortgages made in 2005.
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According to the U.S. Federal Reserve, the share of mortgages on which payments were at least 30 days late increased to 2.11% in the fourth quarter from 1.72% in the previous three months. Mortgage debt climbed by US$4.7-trillion from the end of 2000 through the third quarter of 2006.
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According to Credit Sights Inc., borrowers defaulting on mortgages could result in an estimated 533,000 additional homes coming onto the U.S. market. In January, there was an unsold inventory of 4.09 million homes in the U.S.
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Moor Park Real Estate will purchase 72 hotels in Germany and 19 in the Netherlands from Accor SA for €863-million ($1.33-billion). Accor will continue to operate the properties under 12-year variable rent leases and use the sale proceeds to reduce its debt by €612-million.
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Accor SA reported that net income rose 51% to €501-million in 2006 from €333-million in 2005. Annual revenue reached €7.6-billion last year. Accor plans asset sales worth €1.9-billion ($2.95-billion) by the end of 2008. The company also plans to buy back shares worth €700-million and return an additional €320-million to investor through a €1.50-a-share special dividend. Accor intends to open 30,000 more rooms by the end of 2007, following the addition of 22,000 rooms in 2006.
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China’s parliament has unveiled legislation that would give legal protection to private property and close a tax gap between local and foreign companies. The proposed property law would let individuals own and sell assets such as land-use rights for as long as 70 years.
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The Funniest Pictures on MLS – Saskatoon Edition!

Holy Crap! I almost crapped my pants! Okay, so I don’t know what the language etiquette is for blogs. However, after you take a look at the following blog you are literally gonna laugh your mascara off (as one agent said) or do a number one. Anyways, I thought I’d share the following with you. It comes courtesy of Norm Fisher’s Saskatoon Real Estate Resource Centre Blog.

Click HERE and start laughing!

Friday March 9, 2007″

Housing Starts Moving South… Globe and Mail and CBC report on this CMHC Report.

However, Canadian Housing Sector continues to buck U.S. Trend. Read what The Globe and Mail and Toronto Star have to say about this.

CMHC now making it EASIER for Self-Employed Home Buyers to realize goal of Home Ownership.

Royal and BMO assist Housing Boom by lowering mortgage rates!

Cross Country Canada Report:

  1. Ontario and Ontario Part Deux
  2. Greater Montreal
  3. Toronto
  4. Saskatoon
  5. Calgary
  6. Canadian Snap-Shot