New rules for the capital gains: Principal Residence Exemption

Changes to the Principal Residence Exemption (PRE) were announced on October 3, 2016.

The PRE allows a home owner an income tax exemption on capital gains they realized when they sell their designated principal residence as defined in the Income Tax Act 40(2)(b).

Before 2016, the Canada Revenue Agency (CRA) did not require the home owner to report when they claimed a full exemption for a capital gain under the PRE rules.

Effective January 1, 2016, the CRA requires all dispositions of residential real estate to be reported on Form T2091. Dispositions include a sale, a gift, a death or a change of use.

Owners can claim only one principal residence per year and must provide a description of the property and details about the date of purchase and the date of sale on Schedule 3 of their federal tax return. (Note: this schedule is being modified.)

The PRE capital gains exemption is intended to be available only to Canadian resident individuals and trusts.

A principal residence, according to the Income Tax Act, section 54:

  • must be a housing unit;
  • must be owned by the tax filer either alone or jointly with someone else;
  • must be lived in, “ordinarily inhabited,” by the tax filer or their spouse and children;
  • must be designated as a principal residence; and
  • can’t be income-producing for tax purposes.

Note: flipped homes are not capital property. They’re considered inventory by CRA and profits are business income, which aren’t entitled to the principal residence exemption.

Client owns two properties

Your client owns a home in a city and also owns a seasonal residence such as a cottage or ski condo. They can choose to designate the seasonal residence as their principal residence. The seasonal residence can be considered “ordinarily inhabited in the year” even if it is used only during vacations, provided the property doesn’t gain or produce income.

When the seasonal residence is sold, and the owner designates it as the principal residence, the owner can claim the PRE against the capital gain.

Client changes property use

If your client downsizes, buys a condo, and rents or gifts their home to one of their children, the CRA considers this a “deemed disposition” because the primary use of the property has changed. CRA considers the home sold for tax purposes at the current fair market value in both these cases.

Residence on acreage

If a residence is on acreage larger than half a hectare (1.235 acres), the portion of the property where the home is located is eligible for the PRE. However, if a municipality’s zoning regulations don’t allow the property owner to legally subdivide their land (as in BC’s Agricultural Land Reserve), then the entire property may be eligible.

Residence owned through a trust

Trusts will be eligible to designate a property as a principal residence for a tax year that begins after 2016 only if additional eligibility criteria are met. After 2016, a trust will be required to be a spousal or common-law partner trust, an alter ego trust or a similar trust for the exclusive benefit of the settlor during the settlor’s lifetime, a qualifying disability trust, or a trust for the benefit of a minor child of deceased parents. The trust’s beneficiary who, or whose family member, occupies the residence for the year will be required to be resident in Canada in the year, and will be required to be a family member of the individual who creates the trust.

Changes for non-residents

An individual who wasn’t resident in Canada in the year the individual acquired a residence won’t, on a disposition of the property after October 2, 2016, be able to claim the exemption for that year. This ensures that permanent non-residents are ineligible for the exemption on any part of a gain from the disposition of a residence.

Record keeping

It‘s imperative that property owners keep records of the purchase price and date, invoices and receipts for capital improvements, and the sale price and date for properties they own.

Owners planning to sell a home should get an appraisal report establishing the fair market value of their properties and keep it on file.

CRA information gathering

Using new reporting information, the CRA is now able to track transactions and identify who has claimed PREs for which years, as well as capital gains not reported in the past and whether tax is owing.

Audits, penalties

CRA can audit and levy penalties and interest charges. If your client forgets to claim the PRE in the year they sell their residence, they will be required to amend their return for that year to be eligible for the PRE. There are late designation penalties.

Always recommend that your client get legal and accounting advice.


Source: Real Estate Board of Greater Vancouver

Contact Michael Cowling at 604-241-7653 or for your neighbourhood market update.

BC government to offer down payment loans for first-time buyers

The BC Government unveiled a new loan program today to help first-time home buyers come up with their down payment.

The BC Home Owner Mortgage and Equity (HOME) Partnership program will offer qualifying home buyers loans of up to $37,500, interest and payment free, for five years.

The province will begin accepting applications on January 16, 2017.

To qualify, buyers must:

• be buying their first home;

• obtain a high-ratio, insured first mortgage for at least 80 per cent of the purchase price;  

• have a combined gross household income not exceeding $150,000;

• have saved a down payment amount at least equal to the loan amount;

• be a Canadian citizen or permanent resident for at least five years; and

• have lived in BC for at least the full year preceding their application.

The loans will be due in full if the buyer defaults on a payment, ceases to use the home as a principle residence or resells the home.

Key facts:

• The loans will match a home buyer’s contribution to a down payment up to five per cent of the home’s purchase price. 

• The maximum purchase price to qualify for a loan is $750,000 (excluding taxes and fees).

• After five years, buyers can either repay their loan or enter into monthly payments at current interest rates.

• Loans through the program are due after 25 years.

“This program will boost sales to first-time home buyers. Without question, they’ll take advantage of it wherever they can,” said Helmut Pastrick, Central 1 Credit Union chief economist.

The province estimates this initiative will help at least 42,000 buyers or households province-wide over the next three years. About half of these buyers will be in the Lower Mainland, according to Pastrick.

Click here for more information.


Source: Real Estate Board of Greater Vancouver

Contact Michael Cowling at 604-241-7653 or for your neighbourhood market update.

How to Stage Your Home During the Holidays

The holidays are all about giving (even when you’re hunting for an offer), so take the time to give your house a mini seasonal makeover for festive home viewings.

Light it Up – First, make sure all the year-round outdoor lights are functioning — winter days are shorter so having the walkway and front door lit up for evening viewings is a must. Second, when it comes to seasonal light displays, keep it simple. String white lights to highlight an architectural feature or a splendid fir tree in the front yard…and make sure the light-up reindeer display stays in the garage.

Festive Front Door –  Any home stager worth their salt will tell you first impressions are most important — and since the front door is often the first thing a potential buyer will see, better make it count. Give that dull door a done-in-minutes holiday makeover by hanging a tasteful wreath or swag. Placing a seasonal arrangement in the entryway or on a hall table also makes it feel like they’re coming home for the holidays, rather than coming into your home for an open house.

Holiday Flair – Even though year-round home staging is all about a less-is-more philosophy, when the holidays roll around ramping up your ornament game is a must. But don’t go totally overboard: a bowl of fragrant pinecones, some strategically placed sprigs of holly, or a bowl of shiny glass baubles should do the trick. Oh, and stay away from overtly religious displays as it might put off some people — remember it’s about them, not you.

Pretty Palette – Your eclectic collection of Christmas tree ornaments may hold great sentimental value to you and your family, but they may clash horribly with your home décor and need to remain securely packed away. Think about your living room’s colour palette and find ornaments that fit within it. If the walls are white, maybe opt for a faux white tree, or if the room is decorated in darker tones, consider gold or green holiday accents.

Warm Up -Stepping out of the biting cold and into a warm and cozy home is one of the few pleasures of wintertime. Enhance the corporeal experience of your potential buyers by making sure the thermostat is turned up a couple of extra degrees. If there is a fireplace, always have it lit, either when showing the house or when taking staged photos.

Seasonal Fragrance – Thanks to human physiology, the quickest way to access memories is through the sensation of smell — so make sure your potential buyers are getting good ones the moment they walk through the door. Simmering apple cider or baking a batch of ginger cookies are good standbys, but take it a step further and sparingly spritz a winter-scented home fragrance throughout and breathe deeply.

Now, enjoy creating this seasonal (and sellable) sanctuary and happy holidays!

(article courtesy of RE/MAX Canada and HGTV)

Home sale and listing activity dip below historical averages in October

Greater Vancouver Real Estate Board

November 2, 2016


Reduced home sale and listing activity are changing market dynamics in communities across Metro Vancouver.

Residential property sales in the region totalled 2,233 in October 2016, a 38.8 per cent decrease from the 3,646 sales recorded in October 2015 and a 0.9 per cent decrease compared to September 2016 when 2,253 homes sold.

Last month’s sales were 15 per cent below the 10-year October sales average.

“Changing market conditions compounded by a series of government interventions this year have put home buyers and sellers in a holding pattern,” Dan Morrison, Real Estate Board of Greater Vancouver (REBGV) president said. “Potential buyers and sellers are taking a wait-and-see approach to try and better understand what these changes mean for them.”

New listings for detached, attached and apartment properties in Metro Vancouver totalled 3,981 in October 2016. This represents a decrease of 3.5 per cent compared to the 4,126 units listed in October 2015 and a 17 per cent decrease compared to September 2016 when 4,799 properties were listed.

Last month’s new listing count was 9.5 per cent below the region’s 10-year new listing average for the month.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 9,143, a 4.5 per cent decrease compared to October 2015 (9,569) and a 2.3 per cent decrease compared to September 2016 (9,354).

The sales-to-active listings ratio for October 2016 is 24.4 per cent. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“While sales are down across the different property types, it’s the detached market that’s seen the largest reduction in home buyer demand in recent months,” Morrison said. “It’s important to work with your local REALTOR® to help you navigate today’s changing trends.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $919,300. This represents a 24.8 per cent increase compared to October 2015 and a 0.8 per cent decline compared to September 2016.

Sales of detached properties in October 2016 reached 652, a decrease of 54.6 per cent from the 1,437 detached sales recorded in October 2015. The benchmark price for detached properties is $1,545,800. This represents a 28.9 per cent increase compared to October 2015 and a 1.4 per cent decrease compared to September 2016.

Sales of apartment properties reached 1,178 in October 2016, a decrease of 23.7 per cent compared to the 1,543 sales in October 2015.The benchmark price of an apartment property is $512,300. This represents a 20.5 per cent increase compared to October 2015 and a 0.3 per cent increase compared to September 2016.

Attached property sales in October 2016 totalled 403, a decrease of 39.5 per cent compared to the 666 sales in October 2015. The benchmark price of an attached unit is $669,200. This represents a 25.7 per cent increase compared to October 2015 and a 1.1 per cent decrease compared to September 2016.

Contact Michael Cowling for the statistics for your property type and neighborhood at

Average Home Size to Contract in the Near Future - report

Oct 31, 2016
A recent report warned that the average size of Canadian homes will decrease in the next few years, even as affordability in Vancouver and Toronto won’t return to manageable levels for the foreseeable future.

PricewaterhouseCoopers stated in its 2017 outlook that Canadians will see the average floor areas of their homes decline amid increased immigration stimulating demand in markets already suffering from scarcity.

“Those arriving in Canada may not have the same size expectations, creating demand for smaller units,” according to the report, as quoted by HuffPost Business Canada. “Significant increases in immigration over the next five years will continue to keep demand high and put even more pressure on affordability unless more supply is made available.”

This shrinkage is nothing new in the hottest markets—especially Toronto, where the average condo floor area has been on a downward trend for several years now.

“With no real factors reducing the demand for real estate in Toronto and Vancouver, developers and builders will continue to face supply-side issues,” the report stated.

Canadian housing affordability has not been looking up for the past few years. Earlier this year, Vancouver average home prices have reached historic heights, while Toronto affordability levels are the lowest they have been in 20 years.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Email me at

Source:rich Ephraim Vecina

Michael’s Market Update – Richmond home buyers and sellers seeing big market changes in Sept.

Richmond home buyers and sellers are seeing some big market changes in September. Detached home sales dipped well into the buyer’s market category with 9.7% of active detached listings on the market selling. Townhomes came in with 26.5% and condo leading with 32% of active inventory selling in September. Overall sales to active listings registered at 18% of the total available inventory selling.

Richmond home sales totalled 80 in September 2016, a decrease of 54 % from the 174 sales recorded in September 2015.

The supply of detached homes increased 34.3% compared to last year with decreases in supply and increased demand for townhomes and condos.

Generally, analysts say that downward pressure on home prices occurs when the sales to active listings ratio dips below the 12% mark, while home prices often experience upward pressure when it reaches the 22% range in a particular community for a sustained period.

Upward pressure on home prices has eased. We have some uncertainty in the market right now due to the increased property purchase tax, retroactive and ongoing 15% foreign Buyers Tax and changes to the mortgage qualifying rules. To help you understand the factors affecting prices, it’s important to talk me in advance of putting a home on the market or negotiating a purchase.

Take a look on my website for a detailed statistical update on the past month’s market performance and contact me to discuss your area’s unique market opportunities.

CMHC says foreign buyers’ pullback in line with existing trend

The Vancouver housing market has eased since the introduction of a tax on foreign buyers but the decline continued trends that were already present.

“Foreign buyer activity is one of many factors impacting the Vancouver housing market,” noted Robyn Adamache, CMHC’s Principal Market Analyst for Vancouver.

Other factors noted by the Canada Mortgage and Housing Corp. include supply constraints for both housing and land; together with economic and demographic fundamentals driving demand.

“Sales and prices had already started to dip before the introduction of the Foreign Buyers Tax, so it basically underlined existing trends in the resale market,” added Adamache.

CMHC says that prior to the tax’s introduction there was already a slowing pace of sales, reduction in average prices, and a shift towards greater condo sales.

Are you looking to buy or sell real estate? Contact me, your local expert for a free consultation on your buying or selling real estate needs.

-Source CMHC.

Sell Your Richmond/Ladner Home this Fall!

It’s considered to be common knowledge that the best time to sell your home is in spring. While it’s certainly the busiest time to sell your home, there are compelling reasons why it is not necessarily the ideal time to sell. The advantages of putting one’s home on the market in fall are many, especially with recent shifts in our heated housing market.

Here are our insights on why you should consider listing your home this autumn:

Less Competition: The fall market brings much less competition from other sellers. Less inventory on the market means fewer options for hungry buyers; putting the odds in your favor of a speedy, profitable sale.

Plus? You’re less likely to be vying for the attention of your realtor, mortgage broker, or financial planner during the slower months.

Buyers Mean Business: With back to school and work schedules, and leading up to the holidays, it’s no secret that fall is a busy time of year. What does that mean for you, the seller? The window shoppers have gone home! The buyers pounding the pavement are qualified and motivated to move into their new home before Christmas. They’re ready to buy – yesterday.

Seasonal Beauty: Our vibrant autumn colors lend our Richmond/Ladner homes a warm, cozy feel this time of year. Just be sure to rake those leaves! Simple decorative accents can be great this time of year, too. Pick up some gourds and pumpkins from your local farmer’s market for boosted curb appeal.

Did someone say Black Friday? Sellers and buyers alike can take advantage of our seasonal sales in autumn. Spruce up your curb appeal AND outfit your new home – for less!

Start now. If you’re even thinking of putting your home on the market, contact us today for your complimentary home evaluation. We can tell you about the recent sales in your neighbourhood, and explain how the local market has impacted the value of your home.

Call Michael today: (604) 276-2335

Michael’s Market Update – Richmond home sales return to typical August levels

We have moved from record-breaking sales to more historically normal activity throughout July and August. Sales have been trending downward for two straight months. The new foreign buyer tax appears to have added to this trend by reducing foreign buyer activity and causing  uncertainty among local home buyers and sellers.

It will take a few months before we can really understand the impact of the new tax. We’ll be keeping an eye on the foreign buyer data moving forward.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Richmond totalled 323 in August 2016, a decline of 28.7 % compared to the 453 sales in August 2015. August 2016 sales also represent a 25.2 % decline compared to last month’s sales.

The Richmond sales-to-active listings ratio for August 2016 is: Detached 7.6%, Attached 30.0% and Apartment/Cond 45.1%

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12% mark, while home prices often experience upward pressure when it reaches the 20 to 22 % range in a particular community for a sustained period.

The MLS® Home Price Index composite benchmark price for residential properties in Richmond is currently $1,704,200 for Detached, $734,400 for Attached and $440,000 for Condos.

We are seeing a large increase in supply and a fall in demand especially for detached properties in the past two months. However, we’re also seeing a large drop in detached sales in the highest price points and fewer detached home sales relative to all residential sales. This is causing average sale prices to show a decline in recent months, while benchmark home prices remain virtually unchanged from July.

The average price is the simplest home price measure to explain but is not the most accurate since it may be skewed by the mix of properties. More high-end or low-end sales will skew the number up or down. Based on the Consumer Price Index, MLS HPI® benchmark prices are a more reliable and stable indicator of typical home prices across regions over time.

Whether you’re a home buyer or seller, it’s important to work with me to get the information you need and to develop a strategy that will help you navigate today’s market.

Call us today – we’re here to help, every step of the way. (604) 276-2335

Is That Your Final Offer?

A home is the biggest purchase most of us will ever make, so it’s only natural to feel a little intimidated by the negotiation process. This is particularly the case for first-time buyers. Here are some tips to help you approach the negotiation process that will help you minimize stress, stay within your budget and get the best price for your new home.


Becoming familiar with the types of properties available in your price range is an important first step. With the help of a real estate professional, you’ll also want to begin exploring neighbourhoods you’re interested in, the types of properties available in those neighbourhoods and their prices. Make note of the difference between listing and sale prices and how factors such as size, location, amenities, proximity to schools, and the age and condition of the home affect price.

Familiarity with the market will help you understand the value of the properties on the market and put you in a stronger negotiating position. While online listings are a good place to start, most buyers should expect to look at 10 to 15 homes in person before they make the decision to put in an offer.


Buying your first—or even second or third—home comes with a lot of excitement and becoming emotionally attached can be easy. When looking at potential options, it often doesn’t take long to start imagining your new life there. However, it’s important that buyers do not act overly enthusiastic, particularly when the seller is home. This can put your REALTOR® at a disadvantage when negotiating for the best price. The best approach is to keep your demeanor neutral, take notes, and keep your thoughts and questions for a private conversation with your real estate agent.


When considering making an offer, many buyers assume that the asking price will be different from the selling price. In certain markets, buyers may expect the property to be listed higher than what it will sell for, while in hot markets, the opposite applies.

Rather than focusing on the listing price, focus on the value of the property. If the property is priced properly, the best strategy is to offer the listing price. If the property is not priced properly, make an offer that reflects the property’s true value. The best way to assess this is by getting to know the market and discussing your options with your REALTOR®.

A common mistake some buyers make is to put in a low offer, just to see if the seller is receptive to it. The result is often that the seller doesn’t take the offer seriously, either coming back with the original listing price or not responding at all.

Remember that just as your REALTOR® is advising you, there is also a real estate professional advising the seller on the home’s value.


Don’t forget that price is not the only point of negotiation –terms are negotiable too. Everything from the move-in date, to home repairs, to which appliances are included in the sale, is up for negotiation.


Firmly establish a budget and stick to it. In markets where demand is high and inventory low, it can be tempting to increase your budget, especially if you have put in several offers without being successful. However, it’s important to stay within a budget that you will be comfortable with for the next several years. Make your best offer and don’t budge. Home buying can be emotional, but try to keep a cool head by reassuring yourself that there will always be another house out there.


When starting the search for a new home, it is important to establish a budget that you will be comfortable living within for several years. There are several handy tools to help you calculate your housing budget and plan your monthly expenses. Canada Mortgage and Housing Corporation’s Household Budget Calculator allows you to compare your income with your expenses and debt payments and see what kind of mortgage you can comfortably afford, and the RE/MAX Monthly Home Budget Planner helps you gain a better understanding of all the costs associated with home ownership.

Source: RE/MAX

php developer india

Social Networks


Newsletter SubscriptionYouTubeGoogle Plus