Money Strategies to Help You Buy Vancouver Real Estate Sooner

Pay yourself firstHave you ever heard the expression house rich and cash poor? When living in and around Vancouver it can certainly feel that way sometimes.  Often I talk with people that have space issues… Either they want to own a space or need more space!  Here is an excellent tip on how to feel less house rich and cash poor when it comes to buying and moving up to that next place in Vancouver.

One of the suggestions I give to people that are either renting or looking to move from a condo or townhouse to a house…is to “test drive” their next mortgage.  Let’s say your current mortgage (or rent) is $1,000 a month and you want to buy up to a home that would have you paying a larger mortgage, say $2,000 a month.  When your mortgage/rent is due each month trying, by paying the $2,000 ($1,000 towards your mortgage/rent and $1,000 to a high interest savings account). These days it is really easy to set up an automatic withdrawal savings plan (this is known as paying yourself first).

This may be a huge shock to your personal, financial and social system… at first! This will do two things for you.  First, it will help you save up more of a down payment and help you reach that goal of OWNING more space sooner. Secondly, it will allow you to try out your future financial reality without having the downside of risk.  In other words, you will be able to test how the “new” (higher) mortgage feels in terms of your life style so you can evaluate if it is a realistic expectation. Alternatively, one could always scale things back, saving less per month, and taking longer to be financial ready to make your move.  Looking on the bright side, you won’t be defaulting on any payments and this will help reduce your risk in the future.

Finally, when you do make your next move, you will already be acclimatized to the payments and will not have to go through the shock of higher payments as you have already been doing that for some time. This allows you to buy with confidence and remove some of the worry out of the equations.
If you want some help figuring out future mortgage payments, check out top mortgage broker sites, such as Kyle Green’s by clicking here, or feel free to get in touch with me and I would be happy to help!

Holiday Home Sense and Safety Tips

Hanging Christmas Lights 2This is a great time of year to share time with family and friends. Here are a few tips to keep you and your family safe, in your home, especially, over the holidays, let alone any period during the year.

Tip #1 – Fire Alarms

The most valued tip for keeping your home safe is to check your smoke detector every holiday (Christmas, Easter, Summer Long Weekends, Thanksgiving…). This singular step will safeguard your home, above and beyond all others, should you neglect completing all the remaining tips combined!

Tip #2 – Open Flame

The fireplace is often the centerpiece of the home and an easy way of disposing of all the winter holiday “evidence.” Be cautious of burning gift wrap, boxes, and other types of packing. They burn rapidly and can get out of control fast.

Always use a screen in front of the fireplace to protect against flying sparks and make sure the damper is open to avoid being smoked out.

Make sure that candles are in safe fire proof containers, or on fire proof surfaces (candles can burn down and drip wax and spread fire.) I have seen this first hand when our dinner table was on fire! Never leave the fire or candles unattended or smouldering.

If your pipes freeze do not use a blowtorch to thaw them. The open flame itself is a hazard. Furthermore, the pipes that you are attempting to thaw may be in contact with other points of you house which could catch fire.

Tip #3 – The Tree

When setting up your Christmas tree make sure it’s at least three feet away from any heat source (fireplace, radiators, heating vents and lighting.) Heat sources will dry out a tree and increase its flammability.

To assist in keeping the tree fresh keep the stand filled with water at all times.

Fire safety professionals recommend that you not leave your tree up any longer than two weeks.

When finished celebrating the holidays, dismantle and discard the tree immediately and properly. Don’t leave it in or around the house as a dried-out tree is highly flammable and can still cause major damage. (Check with your local community for a recycling program or other disposal options.)

Tip #4 – The Kitchen

Did you know that grease fires are a leading cause of home fires? Bearing this in mind, it is imperative to be extra careful when cooking with oil and know how to combat a fire in a pot or pan that catches fire.

*Never put water on a grease fire (it will make things far worse).

See this Youtube clip of what will happen with only one teaspoon of water added to a pan of oil on fire: http://www.youtube.com/watch?v=JmjSUlKoMXE

If you do have a fire: If in a container, such as a pot, smother the flames by covering them with a metal lid (use an oven mitt to protect you hands). Remember to turn off the heat immediately. If you do not have a lid, or the fire is not in a pot that can be covered, use baking soda (flour can be explosive).

Do not turn on the overhead fan, as this could spread the fire and again never throw water on a grease fire.

Tip #5 – Electrical Safety

There are often lots of items to plug in and it is easy to overload outlets during the holiday season. Avoid doing this and prevent electrical fires.

Also, avoid overheating extension cords by not plugging in multiple items to a single cord, coiling or bunching them and don’t run them under carpets or rugs. It is also important to ensure that there are no breaks or exposed wire in the cord.

Always make sure plugs are fully inserted into outlets. A poor contact may cause overheating or shock.

We at Team Andruff want to wish you a happy and safe Holiday around your home!

New Rules Approved for Laneway Housing in the City of Vancouver!

The City of Vancouver recently held a Public Hearing on Tuesday, June 11, 2013, regarding Lane Way Houses (LWH) with a few rules changed for building them.

After having more than five hundred LWH approved and constructed across the city of Vancouver, some of the key concerns noted are privacy for neighbours, storage and accessibility. Furthermore, there is a concern that only some of the residentially zoned areas allowing for LWH, namely RS-1 (Residential Single Family) and RS-5 (Residential Single Family/ Density Bonus). RS-1 and RS-5 zoned areas make up 94% of the entire single detached living areas in the city. So the current City Council is looking to expand the allowance of LWHs to all RS zones.

Laneway Houses Feb 2013

The proposed and approved changes are:

– Keeping the existing two-level loft style option, but adding another option for one-level of living space only by extending the back wall allowance on the LWH by 6 feet (for single-level only, and the 16 foot distance between LWH and principal home still is required). This will allow for more room for storage, extra living space, and accessibility.

– The formerly required interior parking would now become an exterior parking space, only with permeable ground. (It was largely understood that very few of the indoor parking spaces were actually being used for parking. So permitting outside parking instead increases the interior living space and removes the concern of people cheating on the original rules.)

– Finally, the city will allow the zoning to open up to all RS zoning not just RS-1 and RS-5 but to RS-1A, RS-1B, RS-2, RS-3, RS-3A, RS-4, RS-6, RS-7 so more people can access this program.

– And, stream-lining the permit review process (for single level LWH).

For more detail on this development check out The City of Vancouver web site.

Unlocking the Equity in Your Home.

Taking money out of your homeIn some cases it is okay to treat your home as an ATM.

House rich, cash poor. And now you need some cash?

Here is how to generate income out of your home.

In the business of real estate I hear a lot of clichés. My home is the biggest investment I ever made. My home is my castle. Well you get the idea. Many Canadians want to remain living at home. Are you feeling: House rich, cash poor? Did you know it is possible to tap into the wealth that is invested in the value of your home? So when it comes to the golden years or you just need help in getting ahead of the tax man, here are some ideas on how to use the equity you have built in your home.

Tips to Access the Equity in Your Home.

 

A) A reverse mortgage

A reverse annuity mortgage or home equity plan are both similar strategies. The idea on these plans is to pull equity as a mortgage out of the debt free portion of the home, in either a lump sum or monthly payment, for a set period of time. Once the home is sold the mortgage plus accrued interest must be paid. In the mean time no payments are required and any residual equity of course would flow through to the seller or an estate. It is best to talk to a financial advisor to learn what your options are and what would work best for you.

B) Renting out a part of your home.

Perhaps you have a basement that could be turned into a rental suite. Ensure your municipality allows this option. Some areas may or may not allow this type of arrangement but often time it can be a great way of creating wealth without taking away from your equity.

 

C) The use of a property manager

This can simplify things so you don’t have to worry about finding and dealing with the tenant and residential tenancy rules. However, this still provides the ability to collect passive income. (Often time your rental income can be off set by your household expenses leaving a zero taxable income, but it is advisable to get professional accounting advice on this mater.)

 

D) Home Stay Students

Some students will pay up to $750 a month for a bedroom and private bathroom, including picking them up at the Airport, feeding them, and including them in your family activities. Depending on what level of commitment you prefer, this could be an interesting way to make a few extra dollars.

 

E) Operate a business out of your home. This sure can cut down on your commute time! It also could cut down on your overhead, create supplemental income and assist in lifestyle choices. There are various details to discuss first with your accountant to stay “on side” for items such as PST and GST remittances, and what you can and cannot write off.

As well, talk with your insurance broker. An existing standard home policy does not usually cover business endeavours and you may be exposed to undue liabilities that should be covered. Often the benefits of running a home-based business will out way the risks. Take the extra steps and do some homework. Consider reading, “A Home Inc.: The Canadian Home Based Business Guide,” by Douglas and Diana Gray.

Moving around Metro Vancouver soon?

Moving - 2

Do you have that feeling, “Am I forgetting something?” Here is a helpful list of so many things to do when you are moving in and around the Metro Vancouver area!

Moving from one place to another can be a stressful time. There is so much to do to get everything organized. So here is my list of links and suggestions to help you through the process!

Movers

Once you’ve decided to move, do you plan to hire movers or move everything yourself? There are lots of options from good old do-it-yourself including reserving ahead for a U-Haul truck or trailer, to hiring packers and movers. Do you know about portable storage Pods (see below) that can be delivered to your curb?

Whatever method you choose, be sure to reserve the service well in advance to get the moving dates you want, especially for weekends and month end moves. As well, it is a really good idea to call around and get a few different quotes.

HOT TIP– If you choose to hire a moving company, ask them if they have liability insurance for goods damaged. What is their breakage policy? Also, make sure their workers are covered under Workers Compensation (WCB) in case a worker is accidentally hurt, or you may be liable!

 

Basically contact anyone that sends you a paper bill or invoice. Change your address:

– Post office: Set up mail forwarding, either by personally going to the post office or click on this link.… to change your residential address on line. Do this in advance of moving and allow a minimum of 3 days for the post office to process your request and set up mail forwarding.

– Bank: Plus, consider moving your safety deposit box, closer to your new location.

– The Doctor, Dentist and Veterinarian.

– Credit card companies… Visa, MasterCard, gas cards, department store cards…

– Newspaper and magazine subscriptions.

– Automobile windshield stickers like

– Treo – Transponder for the Port Mann and Golden Ears Bridge

– City Hall – for resident only parking stickers

– Service providers for Utilities —

Gas (Fortis) (formerly Terasen Gas)

– BC Hydro/electric

– Telephones

– Internet

– TV Cable – Telus, Shaw, Rogers

– Life insurance companies

– Schools, giving notice to both the old and the new neighborhood school.

The Government of BC has a central change to make address changes easy click here

– Elections BC or Elections Canada

– MSP.

– ICBC – Change your driver’s license address.

HOT TIPS

– Always try and get your service disconnected the day before you move and set up at the new location also the day before you move for smoother transitions.

– About 6 weeks prior to move, keep the return addresses or labels of any mail received to remind you of who to contact with your new address! Do the same thing again after you’ve moved, for mail that is habitually forwarded by the post office if a company is still using your old address.

– Make yourself some computer labels with your new address!

– Go on-line and register for paperless email invoices, phone bills, or bank statements!

– Email or contact friends and family, and anyone out of town that sends Christmas cards.

Insurance for your Possessions

Consider getting your antiques and jewelry appraised and take good photos before you move.

Take a photo inventory of everything you own as you pack, for insurance purposes. (Just make sure you don’t pack those photos with everything else or you may be out of luck!)

Check with your own Insurance Company to see how your belongings are covered in transit.

Repurpose your belongings (otherwise known as getting rid of junk!) Be Ruthless!

As you sort through all your stuff, make three piles. Identify each article in your home as “keep, toss, or donate.” For instance on clothing…if it is too short, too long, too small or too old…get rid of it. Really you won’t wear that old sweater to which you are emotionally attached!

HOT TIP: Professional image consultants say: “Do not keep more than three of the same clothing item…you will never wear the 4th! (3 skirts, 3 blouses, 3 dress pants, 3 shorts, etc.)”

– Hold a Garage/Yard Sale.

– Sell or give away unused or unwanted items on Craig’s list or Kijiji or eBay .

– Donate “still good” but unwanted or unused items (books, clothes, nick nacks) to charities like Big Brothers (who will pick up… click here to and book an online appointment) or The Salvation Army.

Packing/Collecting boxes:

Frog boxes are rentable, reusable, eco-friendly, moving boxes (they deliver and pickup).

– Grocery stores – Ask at produce departments for fruit boxes, as they often have lids.

– Liquor Store boxes are a good manageable size, if they will part with them.

– Only use stackable boxes with lids, that fully close.

– Pack all related pieces together, in same container, like rechargers/cords for Ipad/Kindle and phone.

– Number the boxes and keep a separate list of contents for each box.

– For fragile irreplaceable items, pack extremely well with extra bubble wrap. If possible designate a trustworthy friend to carefully transport these items for short distance moves. For longer distance moves, ask about the mover’s policy relating to packing valuables. Sometimes if the movers haven’t packed it, they won’t insure it.

– “Pods”- These are large multi-purpose storage / shipping containers and are good for different types of storage needs, not just moving. They are good for storing decluttered items from your home prior to selling. The pods are delivered curbside. You load it up with boxes and furniture, possibly arranging for 2 friends or movers to do the heavy lifting for you. These pods can also be left curbside for weeks while homes are renovated. Once the pod is filled and ready to go, book it to be picked up and moved into storage or shipped to your new place…It is possible to have just this container moved rather than using a moving van.

Last minute things

-Create a “Pack Last Box” for items that you will need first on the other end like tools & bedding.

-Confirm a few days in advance with your truck rental or moving company as sometimes they over book!

Get what you want: Understand the Vancouver Real Estate Market

When it comes to buying or selling real estate in Vancouver, is it the old cliché of Location, location, location or Timing is everything? Do most people buy when rates are low? Or sell at the best time of year? Or just believe what is suggested in the Media?

 

When I am talking to people about real estate, this is what they all want to know, “How is the market doing? Is it a good time to buy? When should I sell?” There are two sides to every story (or market) so it depends on who you are and what you want to do, not what the market is doing. What you want to do should not change but your tactics might!

The funny thing about buying or selling real estate is that you are buying or selling property not a market. Understand that the market is built around several different segments: the type of housing, such as condo, house, townhouse; and the area, such as West Vancouver, the West End, or the Westside (all different). Some segments or neighborhood areas may be red hot while areas are not, in the same market! So you need to know what you want to do and how your particular area is operating, not what everyone else is doing. In the early spring market of 2013 there are homes that are selling in competition because they are highly sought after properties. There are also buyers getting good value, as prices have softened compared to the high point of last spring. The market is not always one way or another.

Often time I will hear reports in the Media, declaring the so-called “latest trend.” It is important to do your own vetting of information that is specific to your needs and not give too much value to a general headline that is looking to improve ratings or gain new readers simply to sell newspapers. Analysis is very important, yes, but also look at more than just opinions and numbers. Evaluate your own personal circumstances and decide on how your situation fits into a particular market area.

Once you know where you want to go, then you can create a plan to get there. For example, first time buyers want to start building equity in their own property rather than paying rent and reducing someone else’s mortgage. Markets can be up or down but first time buyers will be operating in all types of markets, as their choice to buy into the market outweighs the market itself.

 

It is important to recognize that there are deals in every market but they are not always clear and up front. Let’s say there is a really “well priced” home for sale. Often times there is more than one buyer offering on this same property, so with competition a bidding war drives the purchase price of the deal up. There are also many deals made through a strong negotiation that accommodates the needs of both the seller and the buyer. If you know the market, you will know if you are getting a good deal so you can make the best deal.

 

Tip: As a buyer if you find a property you like, “tie it up.” Negotiate with the sellers one on one so that you can negotiate the price down before others see the same value and push the price up. Sellers want to do the opposite of course, so make sure that you give your property a chance to be seen by the market so you can hopefully attract multiple buyers to bid your price up.

When it comes to selling everyone wants to get the best price. Know why you want to sell and evaluate whether the market can give you what you want. Timing the peaks and valleys of a market is very challenging. Look at what you are hoping to achieve and determine if you can reach that goal, or not, by putting yourself in the shoes of buyers then honestly evaluate your situation from the points of view of others. (Turn a fresh eye from a buyers’ perspective, identify any maintenance or repair issues, and fix them before you sell.)

Don’t wait to find the perfect time to buy or sell, as this process may take longer than you really want it too. Think of the first time buyer mentioned earlier. If they keep on “waiting to buy” they could miss out on extra months or even years of equity that they could have been building in their “own nests” instead of throwing their money away in rent. Keep the “bigger picture” in mind. Have the confidence to live your life without letting other factors such as the market affect what you want to do.

Top 10 Tips for Vancouver Home Buyers:

How to Avoid Costly Mistakes

1) Buying too much house and overstretching your finances. It is always nice to have bigger and better but one has to be able to sleep at night and pay your bills. Here is a great savings technique – In advance of starting the buying process, try paying what your future (higher) mortgage payments would be and save the difference over your current rent or mortgage. This will help you test if you can live under those terms (and it will help you save more for your down payment!)

2) Waiting too long to talk to a lender. Make sure you talk to a mortgage broker first, before you fall in love with something as maybe you can or cannot afford it; or, maybe you find out the banks will not lend to you at all!

3) Bypassing property inspections, Avoiding costly mistakestitle documents and property boundaries. Having more information is always better than less. Even if you feel you may lose out on a property, it is always better to get a full understanding of a property before making a potentially costly mistake. (Going in subject free on a home works best if you have already done your due diligence in advance of making the offer and not going in blind.)

4) Do market research: Compare to other sales in the area and consider the resale value. Work with a professional that can walk you through a proper comparative market analysis (CMA) so you become familiar with the market. Know what you’re getting (like apples to apples). Sometimes things may not be obvious to a buyer and would be accounted for by an experienced agent. For example, is the property on a commercial lane? Or, are you looking at a shorter, wider or longer lot than the home that just sold across the street?

5) Budget: Factor in ongoing operating and maintenance costs. All buildings need to be looked after at some point. Better to plan for new roofs and hot water tanks, as eventually it costs you money.

6) Waiting for “The right time to buy.” If you’re a first time buyer “now” is always the best time to buy. Get started on building up equity in your home, rather than paying rent. Trying to “time” the market is very difficult to do and the home you wanted before may not be available when “the time is right.”

7) Buying before you have sold. Many people have a hard time trusting that they will be able to find something after they have sold. In some cases you can get bridge financing but it can be costly maintaining two properties! You are not the first person that has had to sell first and then find somewhere else to live second. Give yourself time and you should be able to work things out.

8) Listening to too many people. – Everyone has an opinion and their opinion may not always be right for you and your circumstances. A professional typically gives advice based on experience and knowledge, so it is good to listen to them! Think about this…do you tell your dentist how to drill your teeth? True professionals should have their clients’ best interest in mind. If you feel the person you are working with is not giving you good advice, it may be time to find another professional.

9) Failing to allow enough time for moving between properties: vacating on completion and occupying on possession. Time can sneak up on you. When moving out of a property, it is expected it will be left in a reasonably clean condition. Make sure when writing up your offer of Contract for Purchase and Sale…you have these dates spaced out with ample time to sort, donate/discard, pack, clean, and vacate with your goods, then the reverse happens on the other side moving in and unpacking, especially if you are selling and buying back to back!

10) Selecting a home which does not properly meet your families’ needs. What people want and what people need are sometimes two different things all together. If you expect to have children in the future, or say, have a 14 year old child, do not buy into a “age 19 plus” building. Or, in my case, I would love to ride my bike to work but it would be challenging to get my clients around!

Are You Aware of The Fine Details of Insuring Real Estate?

Home Insurance

Is your Vancouver Real Estate covered by insurance? Really? Are you sure you’re not missing something or possibly missing a better option?

For many Canadians their home is one of the largest investments they will make! This is nothing new but have you taken the time to put in the proper safety nets to protect your hard earned money and assets? Insurance is one of those topics that people don’t really like talking about until something has happened!

Like any industry there are people who are skilled at their jobs and others that are happy to just process the paperwork with minimal effort. Just like in life not all insurance agents perform at the same level. Don’t be afraid to ask your agent questions and make sure they ask you questions as well. You want them to know about you so they can meet all of your needs! To help protect you, and depending on what kind of real estate you own, here are a few tips!

All Real Estate Owners:

· If you have done any renovations, ask if your policy includes betterment insurance or enough betterment insurance to cover your needs. Standard insurance will only replace the original condition of the construction, so depending on the level of renovations completed will depend on how much coverage is needed.

· When you take a mortgage against your property you will be offered Mortgage Insurance by the lender or mortgage professional. This may or may not be a good idea for you as a consumer. Mortgage Insurance will pay off your mortgage should you and/or your co-applicant pass away. All you have to do is continue to pay the regular contribution and you will remain covered for the term of the mortgage. Due to some people’s age or health this can be a great relief. If you have a spouse, family or other dependants that you would like to continue living in the home, then this is not a bad idea. However, consider that you are continuing to pay a consistent fee on a depreciating asset. In other words if you continue to pay down your mortgage the regular fee that you pay for that type of insurance will be covering less and less mortgage. Furthermore, if you completely pay off the mortgage you will have paid for a product that you never have a chance to use. If you were to take out Life Insurance you could look at acquiring a policy that will cover your mortgage in the case of your demise, and the life insurance policy continues to exist whether you have a mortgage or not. Depending on your age and qualifications, one product or another may be better for you. Don’t just take the banks word, as it doesn’t hurt to look into the numbers and determine what works best for you.

· If you are hiring services to work on or in your home or property, (anyone from Cleaners to Contractors to Landscapers) always make sure they have Commercial General Liability Coverage. This just allows one more safety net for you to avoid potential problems landing on your insurance coverage and your rates going up!

Strata Properties:

· When you live in a strata complex the building is insured by the strata in case of issues like fire, water or earthquake damage. One of the challenges of living with a large number of people is we are all humans and unfortunately things can happen, or not happen for that matter, which could lead to problems. While the building is insured, your personal contents are not. So as an owner in strata properties, you are going to want to cover the contents of your home with Contents Insurance. As well, generally under the standard contents policy there is an opportunity to get Deductible Insurance. At the Annual General Meeting (AGM), most Strata Councils provide the details of your building’s insurance policy (if they do not provide this simply contact your Strata Manager and request this information). It is not uncommon for building deductibles to be anywhere from $2,500 to $10,000 for a water damage claim for example. So having your home policy covering this cost is definitely something you will want to look into, as a few hundred dollars deductible is much better than a few thousand dollars deductible when it is YOU having to pay.

Rental Property Owners (Including Basement Suites):

· As an investor/landlord always protect your own assets. Most landlords will likely have insurance on the property itself but what if the property is burned to the ground? Have you considered how you will continue to pay the mortgage while the insurance company rebuilds? Income Insurance for revenue properties is something as an investor that is important to consider. While it will erode a small portion of your profits up front, ask yourself what you would do if you had no way of creating revenue on a property that still requires regular mortgage payments!?

· More to that point, if you are living in a home with a mortgage helper you will want to disclose this fact to your insurer as there is a possibility that they could deny an insurance claim if this info was not disclosed. It is important to be upfront about this information rather than putting your home at risk.

Finally, it helps to build a relationship with your insurance provider. Work with a single agency or person for all of your insurance needs. Then, as things in your life change your professional insurance advisor will be able to provide you with the correct advice to have adequate coverage, including as your portfolio and income changes throughout the many stages of your life! I hope that you will never need this information but if you do I hope you use it well!

(If you would like to be put in touch with a great Insurance Professional, I would be happy to strategize with you.)

Have you ever had that sinking feeling???

Whether you’re buying Vancouver real estate or just working on a boat, it’s always important to work with good professionals.

For those of you who don’t know me, I have a long history with sailing. Last year I accomplished one of my life goals and bought an Islander 28 sailboat called Vamanos!

The hull was a major project to refinish. It had eleven layers of paint and putty that took a long, wet month to strip and grind. Once we got all of the paint off we discovered some cracks and damage that I Vamanos needing workconsidered fixing myself, even though I have limited experience in repair work. In the end I decided to hire a professional. With him we got ‘er all fixed up and we applied several layers of epoxy and antifouling paint. And, once we got her back in the water, she promptly started to sink!

You’re asking yourself, what does this have to do with real estate? Well, it is an allegory for buying or selling real estate in Vancouver.

In real estate some people perceive value in doing things themselves and, yes, sometimes you can save a few bucks this way. But it can also cost you…a lot. You could try to buy or sell real estate by yourself, or you could do your own property inspection. These scenarios could also have you swimming with proverbial sharks while drowning in paperwork from a lawsuit, or you could find that your foundation is literally sinking. Since we had a true professional repair our keel, he stood by his work and corrected the little issue of our boat sinking problem. The same is true for real estate professionals. By working with good professionals you protect yourself from big problems. I could have saved myself a few bucks and done the boat work myself, but I am glad I had a good professional to look out for me.Vamanos

By the way if you ever want to go for a sail and talk about real estate (two of my favourite things) I am always around for a “bounce around the bay” just give me a call!

Want to learn how to ease the burden of taxes on expensive on Vancouver Real Estate?

There could be ways to put more money in your pocket!Money Present

If you are like me, you probably don’t like paying taxes. So, what if I told you there is a way to reduce the pressure of paying property taxes? Would you be interested?

Recent changes to the property tax rules can now help families manage their tax payments. There are some good strategies available, using either life insurance or tax deferral. Previously, property taxes could only be deferred under these circumstances: …widowed, disabled, or age 55 plus. But now parents with dependants under the age of 18 can defer property taxes, too. This program works really well for families planning to occupy the family home for a long time.

You may be thinking, “Even if I defer my taxes, they still have to be paid when the property is sold.” This is true, and this strategy alone is not advantageous for everyone.

But what if you could pay your taxes through an insurance policy costing only a fraction of the tax payments?

Here’s how it works:

Property taxes can be paid as part of your monthly mortgage payment or the home owner can pay annually. Let’s say you pay $6,000 annually on your property taxes, or $500 each month. You can take out a “Whole Life” insurance policy to cover the deferred tax payment costing a mere $80 a month. If something should happen to the policy holder (you), then the property taxes will be “paid off” by the insurance policy.

Or, if you decide to sell (after many years of appreciation), the back taxes owed must be paid off completely at the time of sale. This strategy is not for everyone and will take some planning. This strategy frees up $420 a month, which could be used to pay down your mortgage (and gain further savings on mortgage interest!); or, make room for other pressing expenses that many growing families struggle to pay. These numbers would be scaled to your particular situation, of course. *

Who, What, When, Where and How

There are several property tax deferral programs:

55 and older – You or your spouse must be 55 years or older during that calendar year.

 

Surviving Spouse – You must be a surviving spouse.

Disability – To be considered for eligibility as a person with disabilities you are required to provide either:

  • A copy of either a recent letter confirming your designated status of Person with Disabilities or your Release of Information Form from the Ministry of Social Development confirming you have the designation.

OR

  • A Physician’s Certification Form completed and signed by your physician. The form explains the disability eligibility criteria for the Property Tax Deferment Program.

For Families with kids under the age of 18

  • You are financially supporting, at the time of application, a dependent child who is under the age of 18 at any time in the calendar year in which you apply, and who

· Lives with you full time in your home;

· Lives with you at least part time under a shared custody arrangement; or

· Does not live with you, but you pay support for the child, or are responsible for fees and/or living costs if they are attending school.

To qualify for these programs, you must meet the following criteria:

  • Be a Canadian citizen or permanent resident who has lived in British Columbia for at least one year immediately prior to applying for tax deferment;
  • Maintain a minimum home equity of 25% for the ‘55 & older,’ ‘surviving spouse,’ and ‘Person with a Disability’ categories, and a minimum equity of 15% for the ‘family program’ of the current BC Assessment value;

· You can only apply for your principle residence. (Secondary residences, such as summer cottages or rental properties, do not qualify for the tax deferment program.)

If you’re interested in applying for any of these programs you can click here to learn how.

*I always recommend talking to professional advisors when considering more complicated strategies such as the one discussed above so you can make a truly informed decision that is right for you. Medical tests may be required for insurance.