4 1

for more detailed GTA statistics: JAMESMETCALFE.INFO

416-931-4161James Metcalfe BROKER

www.OurHomeToronto.com | Service@OurHomeToronto.com

REAL ESTATE UPDATE

Royal LePage Real Estate Services Ltd.Johnston & Daniel Division, Brokerage

477 Mount Pleasant Rd., Toronto, ON M4S 2L9

STRONG DECEMBER CLOSES HEALTHY 2013

JANUARY 2014

Despite the inclement weather, Greater Toronto REALTORS® reported 4,078 residential transactions through the TorontoMLS system in December 2013 - up by almost 14% compared to the 3,582 sales reported in December 2012. While volume increases occurred across all four key market segments, the biggest gains were recorded in the townhome and condo apartment segments: single-detached (+7%), semi-detached (+3%), townhomes (+15%) and condo apartments (+28%). Total sales for calendar year 2013 came in at 87,111 and were up by 2% compared to the 85,496 transactions recorded in 2012. After a slow start to the year, sales growth accelerated to a very brisk pace in the second half of 2013. Given current borrowing costs and home affordability levels, a further volume increase for 2014 is expected.

The month of December also witnessed a healthy increase in prices, with an average selling price of $520,398. This was up by 9% versus the December 2012 average price of $477,756. Price growth was solid across all four key market segments, but particularly in the low rise segments which showed double-digit increases: single-detached (+13%), semi-detached (+12%), townhomes (+11%) and condo apartments (+6%). The average price for 2013 as a whole was $523,036, which represented an increase of 5.2% as compared to the calendar year 2012 average of $497,130. The seller’s market conditions that drove price growth in the latter stages of 2013 will remain intact in much of the GTA. As a result, the average selling price is expected to rise again in 2014 by more than the rate of infl ation.

GTA AVERAGE RESALE PRICE8 9 10 11 12

GTA Resale Home Sales

APRFEB JUN OCT DECAUG

$540,000

$560,000

$420,000

$440,000

$460,000

$480,000

$500,000

$520,000

201320122011

GTA RESALE HOME SALES8 9 10 11 12

GTA Resale Home Sales

APRFEB JUN OCT DECAUG

3,000

1,500

4,500

6,000

7,500

9,000

10,500

12,000201320122011

It is well known that Canadian mortgages are remarkably low-risk

assets, as compared to their American counterparts. Canadian

mortgages are typically “full recourse” mortgages while their

American mortgages are typically not. This means that the lender

can sue for losses if the foreclosed property does not fully cover the

total loss. This means that Canadian borrowers take their mortgage

obligations very seriously.

A recent report from BMO Capital Markets confi rms just how safe

Canadian mortgages are from the lenders point of view. According

to the report, loan losses on uninsured mortgages have averaged a

paltry 2-3 basis points since 1979. That’s just $20-30 per $100,000

of mortgages.

Even during the 1990 recession, uninsured mortgage losses topped

out at 6 basis points. The absolute peak was in the early eighties

when credit losses hit 12 basis points.

You would naturally expect insured mortgages to be more risky,

however from a loss standpoint, CMHC’s losses have averaged

a very reasonable 9 basis points over time. In the big scheme of

things, 9 basis points is really very minor. Remember that CMHC

charges borrowers up to 275 basis points (of their principal) on a

typical insured mortgage.

Despite the above, the past is never the future. Canadians owe more

money  than ever and average home prices are quite high in some

areas. So what can we expect for future loan losses?

According to the same BMO report, future credit risks will be more

closely related to unemployment or a rapid rise in interest rates (at

least 300 basis points) than to a house price correction. Regardless

of what  precipitates an eventual housing slowdown,  it is possible

that loan losses could top the 12 basis point mark we saw in the 80’s.

How much so is anyone’s guess. That’s why it’s fortunate that banks

and insurers can withstand many multiples of that level.

As usual, your referrals are both highly valued and much appreciated.

Until next time, take care!

“Anger is an acid that can do more harm to the vessel in which it is stored than to anything on which it is poured.” – Mark Twain

“Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.” – Winston Churchill

“There is only one thing in life worse than being talked about, and that is not being talked about.” – Oscar Wilde

“A life spent making mistakes is not only more honourable, but more useful than a life spent doing nothing.” – George Bernard Shaw

t

32

Installing or updating your backsplash is an easy and impactful way

to add value to your kitchen. The right texture, design or colour can

tie the whole theme of your kitchen together. When renovating a

kitchen, it’s best to choose your backsplash design and material at

the same time as you’re deciding on your cabinetry and countertops

since all of these features will appear at eye level together.

The traditional backsplashes you grew up with may have been

rectangular or square ceramic with accent tiles interspersed

throughout. Ceramic tile backsplashes are still very popular today

due to their durability, ease of installation and relatively low cost. You

can modernize your ceramic backsplash by switching up the layout

– align rectangular tiles vertically instead of the traditional horizontal

installation for a unique fi nish.

Ceramic subway tiles, despite their traditional origin, are quite a

popular material for modern kitchen backsplashes. As the name

suggest, this style of rectangular tile was fi rst used in the New York

City Subway system in 1904. Subway tiles are traditionally 3 inches

by 6 inches, have a fl at tile surface and are very tightly set with a thin

grout line. However, nowadays you can fi nd subway tiles in a variety

of sizes to suit your needs.

If you’re looking for something a bit bolder than the classic ceramic,

there are a variety of alternative materials available to create an

inspiring backsplash for your kitchen. Using metal, you can give

an entirely different feel to your decor. Large sheets of stainless

steel give your kitchen a striking industrial look. A brushed, matte

fi nish is popular but you can also experiment with hammered,

quilted or swirled fi nishes to add textural interest.

Metal can also be used to give your kitchen a charming vintage feel.

Embossed tin was popular in the 1900s, most commonly used as

ceiling tiles. Nowadays you can get self-adhesive tin tiles for your

backsplash to make the job even easier. Otherwise, the panels can

be affi xed with small nails or glue. You can even prime and paint

embossed tin to suit your kitchen decor. A lighter, pale shade of your

chosen colour will help to bring out the unique texture of the tin.

While small glass tiles are a tried-and-tested backsplash option –

especially for bathrooms – using large custom-fi t sheets of glass

creates a look that is not only stunning but is durable and easy to

clean. This is a great option for those who may have distinct or

diffi cult-to-fi nd colour requests as you can simply paint the wall

behind or the back of the glass in your desired colour.

The methods above can be quite costly, especially when custom-fi t

materials are involved. But there are still plenty of great options for

backsplashes on a budget. Vinyl wallpaper is a more durable, kitchen-

friendly alternative to traditional wallpaper and comes in a variety of

designs. As you can cut-to-fi t, installation is simple.

Vinyl tiles are also incredibly easy to install and are friendly on the

wallet too. Peel-and-stick tiles make the job even easier. You can

choose a design that mimics the appearance of expensive stone

such as marble or travertine to get a luxurious look without the high

price tag.

But if you’re still set on using higher-end materials, consider opting for

a shorter 4-inch backsplash instead of the traditional 18-inch height to

save on costs. Extending your countertop into a shorter backsplash,

especially if it’s granite, marble or stainless steel, creates a seamless

transition while also offering aesthetic impact.

This article was contributed by Bob Aaron, a prominent Toronto-based real estate lawyer. Please visit him at www.aaron.ca

HST REBATE RULES DON’T INCLUDE ALL YOUR RELATIVESALTERNATIVE OPTIONS FOR YOUR KITCHEN BACKSPLASH

Many buyers of new homes and condominiums may be surprised to

receive a demand from Canada Revenue Agency (CRA) to repay as

much as $24,000 in HST new-home rebates that they received on

closing their purchases. 

The CRA claim arises when a third party, who is not a close relation,

has been placed on title at the insistence of a mortgage lender.

This often occurs when the buyers themselves do not qualify for a

mortgage. 

Noah Okell is a real estate lawyer in the city of Vaughan. He recently

told me that two of his clients were recently dinged for more than

$26,000, including interest, because an uncle was registered as a

one per cent owner for mortgage purposes. 

According to CRA, this disentitles all the buyers to the entire HST

rebate. The Excise Tax Act says that if even one buyer registered on

title fails to qualify for the rebate because the home is not his or her

primary residence and the person is not a close relation, then all the

buyers are disentitled to the rebate. 

Here’s how it works. The purchase price of a newly constructed

home is subject to HST. Typically, the price in a builder offer assumes

that the purchaser is eligible for a rebate of part of the HST, and

assigns it back to the builder as required by the purchase agreement. 

In order to qualify for the HST rebate, the house or condominium

must be acquired for use as the primary place of residence of the

titled purchaser or his or her relation. 

The tax law defi nes a relation to mean a blood relationship, including

a child and grandchild, a brother or sister, and relationships by

marriage or common-law partnerships. Cousins, aunts, uncles,

nephews or nieces, friends and business associates are excluded

from eligibility. 

As a result, if just one of the buyers does not qualify, even as the

owner of a one per cent interest in the property, none of the buyers

can get the rebate. If they received it on closing, and assigned it

back to the builder as is typical, CRA will ask for it to be paid back,

with interest. In other words, all of the buyers must qualify, not just

most of them. There is no percentage allocation. 

The amount of the lost rebate can be substantial. The federal portion

of the rebate is calculated at 36 per cent rebate of fi ve per cent of

the price, up to a maximum of $6,300 for homes or condos costing

$350,000 or less. The rebate gradually drops to zero on homes

priced between $350,000 and $450,000. 

In addition, there is a rebate of 75 per cent of the eight per cent

provincial portion of the HST on the purchase price up to a maximum

of $24,000. 

Philip Davidson, of Calgary, got caught in this rebate trap back in

1999 when he bought a new duplex from a builder. The price of the

unit he occupied was $131,841.50. In order for Davidson to qualify

for a mortgage, the lender required that title be taken in his own

name along with Carol Waterhouse, who was named as owner for

mortgage purposes only. 

Since Waterhouse was not a relative of Davidson, and wasn’t using

the duplex as her primary residence, Davidson did not qualify for

the rebate. The Tax Court of Canada ruled that he had to pay the

government back the entire tax rebate. 

Buyers who take title along with spouses, parents, grandparents or

siblings for mortgage purposes are not disqualifi ed from receiving the

HST rebate. But aunts, uncles, cousins, nephews or nieces, friends

and business associates who sign on — even for a small percentage

— just to satisfy the lender’s requirements, will disqualify the buyer

from receiving the entire HST rebate. 

In these situations, buyers who have received past rebates but

failed to qualify for them should not be surprised to receive a very

unwelcome letter from the CRA audit team. 

This situation is unfair and illogical. It’s time for the federal

government to change the rules.

LEGALLYSPEAKING

TRENDYCORNER

t

32

Installing or updating your backsplash is an easy and impactful way

to add value to your kitchen. The right texture, design or colour can

tie the whole theme of your kitchen together. When renovating a

kitchen, it’s best to choose your backsplash design and material at

the same time as you’re deciding on your cabinetry and countertops

since all of these features will appear at eye level together.

The traditional backsplashes you grew up with may have been

rectangular or square ceramic with accent tiles interspersed

throughout. Ceramic tile backsplashes are still very popular today

due to their durability, ease of installation and relatively low cost. You

can modernize your ceramic backsplash by switching up the layout

– align rectangular tiles vertically instead of the traditional horizontal

installation for a unique fi nish.

Ceramic subway tiles, despite their traditional origin, are quite a

popular material for modern kitchen backsplashes. As the name

suggest, this style of rectangular tile was fi rst used in the New York

City Subway system in 1904. Subway tiles are traditionally 3 inches

by 6 inches, have a fl at tile surface and are very tightly set with a thin

grout line. However, nowadays you can fi nd subway tiles in a variety

of sizes to suit your needs.

If you’re looking for something a bit bolder than the classic ceramic,

there are a variety of alternative materials available to create an

inspiring backsplash for your kitchen. Using metal, you can give

an entirely different feel to your decor. Large sheets of stainless

steel give your kitchen a striking industrial look. A brushed, matte

fi nish is popular but you can also experiment with hammered,

quilted or swirled fi nishes to add textural interest.

Metal can also be used to give your kitchen a charming vintage feel.

Embossed tin was popular in the 1900s, most commonly used as

ceiling tiles. Nowadays you can get self-adhesive tin tiles for your

backsplash to make the job even easier. Otherwise, the panels can

be affi xed with small nails or glue. You can even prime and paint

embossed tin to suit your kitchen decor. A lighter, pale shade of your

chosen colour will help to bring out the unique texture of the tin.

While small glass tiles are a tried-and-tested backsplash option –

especially for bathrooms – using large custom-fi t sheets of glass

creates a look that is not only stunning but is durable and easy to

clean. This is a great option for those who may have distinct or

diffi cult-to-fi nd colour requests as you can simply paint the wall

behind or the back of the glass in your desired colour.

The methods above can be quite costly, especially when custom-fi t

materials are involved. But there are still plenty of great options for

backsplashes on a budget. Vinyl wallpaper is a more durable, kitchen-

friendly alternative to traditional wallpaper and comes in a variety of

designs. As you can cut-to-fi t, installation is simple.

Vinyl tiles are also incredibly easy to install and are friendly on the

wallet too. Peel-and-stick tiles make the job even easier. You can

choose a design that mimics the appearance of expensive stone

such as marble or travertine to get a luxurious look without the high

price tag.

But if you’re still set on using higher-end materials, consider opting for

a shorter 4-inch backsplash instead of the traditional 18-inch height to

save on costs. Extending your countertop into a shorter backsplash,

especially if it’s granite, marble or stainless steel, creates a seamless

transition while also offering aesthetic impact.

This article was contributed by Bob Aaron, a prominent Toronto-based real estate lawyer. Please visit him at www.aaron.ca

HST REBATE RULES DON’T INCLUDE ALL YOUR RELATIVESALTERNATIVE OPTIONS FOR YOUR KITCHEN BACKSPLASH

Many buyers of new homes and condominiums may be surprised to

receive a demand from Canada Revenue Agency (CRA) to repay as

much as $24,000 in HST new-home rebates that they received on

closing their purchases. 

The CRA claim arises when a third party, who is not a close relation,

has been placed on title at the insistence of a mortgage lender.

This often occurs when the buyers themselves do not qualify for a

mortgage. 

Noah Okell is a real estate lawyer in the city of Vaughan. He recently

told me that two of his clients were recently dinged for more than

$26,000, including interest, because an uncle was registered as a

one per cent owner for mortgage purposes. 

According to CRA, this disentitles all the buyers to the entire HST

rebate. The Excise Tax Act says that if even one buyer registered on

title fails to qualify for the rebate because the home is not his or her

primary residence and the person is not a close relation, then all the

buyers are disentitled to the rebate. 

Here’s how it works. The purchase price of a newly constructed

home is subject to HST. Typically, the price in a builder offer assumes

that the purchaser is eligible for a rebate of part of the HST, and

assigns it back to the builder as required by the purchase agreement. 

In order to qualify for the HST rebate, the house or condominium

must be acquired for use as the primary place of residence of the

titled purchaser or his or her relation. 

The tax law defi nes a relation to mean a blood relationship, including

a child and grandchild, a brother or sister, and relationships by

marriage or common-law partnerships. Cousins, aunts, uncles,

nephews or nieces, friends and business associates are excluded

from eligibility. 

As a result, if just one of the buyers does not qualify, even as the

owner of a one per cent interest in the property, none of the buyers

can get the rebate. If they received it on closing, and assigned it

back to the builder as is typical, CRA will ask for it to be paid back,

with interest. In other words, all of the buyers must qualify, not just

most of them. There is no percentage allocation. 

The amount of the lost rebate can be substantial. The federal portion

of the rebate is calculated at 36 per cent rebate of fi ve per cent of

the price, up to a maximum of $6,300 for homes or condos costing

$350,000 or less. The rebate gradually drops to zero on homes

priced between $350,000 and $450,000. 

In addition, there is a rebate of 75 per cent of the eight per cent

provincial portion of the HST on the purchase price up to a maximum

of $24,000. 

Philip Davidson, of Calgary, got caught in this rebate trap back in

1999 when he bought a new duplex from a builder. The price of the

unit he occupied was $131,841.50. In order for Davidson to qualify

for a mortgage, the lender required that title be taken in his own

name along with Carol Waterhouse, who was named as owner for

mortgage purposes only. 

Since Waterhouse was not a relative of Davidson, and wasn’t using

the duplex as her primary residence, Davidson did not qualify for

the rebate. The Tax Court of Canada ruled that he had to pay the

government back the entire tax rebate. 

Buyers who take title along with spouses, parents, grandparents or

siblings for mortgage purposes are not disqualifi ed from receiving the

HST rebate. But aunts, uncles, cousins, nephews or nieces, friends

and business associates who sign on — even for a small percentage

— just to satisfy the lender’s requirements, will disqualify the buyer

from receiving the entire HST rebate. 

In these situations, buyers who have received past rebates but

failed to qualify for them should not be surprised to receive a very

unwelcome letter from the CRA audit team. 

This situation is unfair and illogical. It’s time for the federal

government to change the rules.

LEGALLYSPEAKING

TRENDYCORNER

4 1

James Metcalfe BROKER

416-931-4161 www.OurHomeToronto.com | Service@OurHomeToronto.com

In accordance with PIPEDA, to be removed from this mailing list please e-mail or phone this request to the REALTOR® Not intended to solicit buyers or sellers currently under contract with a broker. The information and opinions contained in this newsletter are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for damages resulting from using the published information. This newsletter is provided with the understanding that it does not render legal, accounting or other professional advice. Statistics are courtesy of the Toronto Real Estate Board. Copyright © 2014 Mission Response Inc. 416.236.0543 All Rights Reserved. K0191

“YOUR REFERRALS ARE SINCERELY APPRECIATED! THANK YOU!”

Royal LePage Real Estate Services Ltd.Johnston & Daniel Division, Brokerage

477 Mount Pleasant Rd., Toronto, ON M4S 2L9

STRONG DECEMBER CLOSES HEALTHY 2013

JANUARY 2014

Despite the inclement weather, Greater Toronto REALTORS® reported 4,078 residential transactions through the TorontoMLS system in December 2013 - up by almost 14% compared to the 3,582 sales reported in December 2012. While volume increases occurred across all four key market segments, the biggest gains were recorded in the townhome and condo apartment segments: single-detached (+7%), semi-detached (+3%), townhomes (+15%) and condo apartments (+28%). Total sales for calendar year 2013 came in at 87,111 and were up by 2% compared to the 85,496 transactions recorded in 2012. After a slow start to the year, sales growth accelerated to a very brisk pace in the second half of 2013. Given current borrowing costs and home affordability levels, a further volume increase for 2014 is expected.

The month of December also witnessed a healthy increase in prices, with an average selling price of $520,398. This was up by 9% versus the December 2012 average price of $477,756. Price growth was solid across all four key market segments, but particularly in the low rise segments which showed double-digit increases: single-detached (+13%), semi-detached (+12%), townhomes (+11%) and condo apartments (+6%). The average price for 2013 as a whole was $523,036, which represented an increase of 5.2% as compared to the calendar year 2012 average of $497,130. The seller’s market conditions that drove price growth in the latter stages of 2013 will remain intact in much of the GTA. As a result, the average selling price is expected to rise again in 2014 by more than the rate of infl ation.

GTA AVERAGE RESALE PRICE8 9 10 11 12

GTA Resale Home Sales

APRFEB JUN OCT DECAUG

$540,000

$560,000

$420,000

$440,000

$460,000

$480,000

$500,000

$520,000

201320122011

GTA RESALE HOME SALES8 9 10 11 12

GTA Resale Home Sales

APRFEB JUN OCT DECAUG

3,000

1,500

4,500

6,000

7,500

9,000

10,500

12,000201320122011

It is well known that Canadian mortgages are remarkably low-risk

assets, as compared to their American counterparts. Canadian

mortgages are typically “full recourse” mortgages while their

American mortgages are typically not. This means that the lender

can sue for losses if the foreclosed property does not fully cover the

total loss. This means that Canadian borrowers take their mortgage

obligations very seriously.

A recent report from BMO Capital Markets confi rms just how safe

Canadian mortgages are from the lenders point of view. According

to the report, loan losses on uninsured mortgages have averaged a

paltry 2-3 basis points since 1979. That’s just $20-30 per $100,000

of mortgages.

Even during the 1990 recession, uninsured mortgage losses topped

out at 6 basis points. The absolute peak was in the early eighties

when credit losses hit 12 basis points.

You would naturally expect insured mortgages to be more risky,

however from a loss standpoint, CMHC’s losses have averaged

a very reasonable 9 basis points over time. In the big scheme of

things, 9 basis points is really very minor. Remember that CMHC

charges borrowers up to 275 basis points (of their principal) on a

typical insured mortgage.

Despite the above, the past is never the future. Canadians owe more

money  than ever and average home prices are quite high in some

areas. So what can we expect for future loan losses?

According to the same BMO report, future credit risks will be more

closely related to unemployment or a rapid rise in interest rates (at

least 300 basis points) than to a house price correction. Regardless

of what  precipitates an eventual housing slowdown,  it is possible

that loan losses could top the 12 basis point mark we saw in the 80’s.

How much so is anyone’s guess. That’s why it’s fortunate that banks

and insurers can withstand many multiples of that level.

As usual, your referrals are both highly valued and much appreciated.

Until next time, take care!

“Anger is an acid that can do more harm to the vessel in which it is stored than to anything on which it is poured.” – Mark Twain

“Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.” – Winston Churchill

“There is only one thing in life worse than being talked about, and that is not being talked about.” – Oscar Wilde

“A life spent making mistakes is not only more honourable, but more useful than a life spent doing nothing.” – George Bernard Shaw