Tag Archives: sales representative
Does HST Apply To A Seller Of A Condo Assignment?
Stephen H. Shub Professional Corporation
Barrister, Solicitor, Notary
www.home-legal-cost.com
Inevitably, an offer to purchase an assignment property (often on an OREA form 140 or 141) by a buyer’s sales representative will state that, if applicable, HST is included in the purchase price (as we typically see in any offer to buy resale residential properties). The sales representative who represents a seller of an assignment (and who is advising the seller) MUST be aware that according to the Canada Revenue Agency, there are sometimes situations where HST will, in fact, be applicable and payable by the assignor/seller who is assigning a contract to buy a newly constructed unit/residence.
When applicable, HST will be payable by the Assignor (buyer #1 from the builder) on the portion of the assignment sale price related to the return of deposits (paid to the builder by the assignor/seller) PLUS the gross profit (the difference between the builder price and the assignment price).
The confusing question is whether or not HST is, in fact, applicable to the assignment and, since realtors should not undertake the responsibility to advise a seller on such a matter, MAKE SURE THAT AN ASSIGNMENT SALE WHICH STATES HST IS INCLUDED IN THE PRICE IS CONDITIONAL ON ASSIGNOR’S/SELLER’S LAWYER’S APPROVAL so that the lawyer for the assignor/seller will be responsible to advise a seller whether or not HST is applicable to the assignment/sale. The idea is to shift the burden of responsibility from the shoulders of the listing sales representative to the shoulders of the lawyer for the assignor/seller.
Believe it or not, whether or not HST is applicable to an assignment depends on the original intention/the plan (in the mind of the assignor/seller) when the offer to purchase was made with the builder. If the PRIMARY PURPOSE by the assignor/seller in buying from the builder was to profit by assigning/flipping the deal, THEN HST IS APPLICABLE to the assignment/sale.
On the other hand, if an individual originally signed an offer to purchase a condo apartment (to be newly constructed by a builder) with the primary intention that the unit bought would be used (for example) by:
(1) a son or daughter when attending University/College, OR
(2) a parent who wanted or needed a place to reside, or
(3) a spouse who planned to separate from the family, or
(4) the buyer(s) who intended to downsize, or
(5) the buyer(s) who intended to use the apartment when working downtown or when visiting Toronto
(6) a son or daughter who was engaged to be married, or
(7) buyer wanted to move closer to a workplace OR to relocate a place of work
THEN the Canada Revenue Agency would typically conclude that HST is not applicable on the assignment/sale if (at a later date) a reasonable change in circumstance resulted in an assignment/sale of the unit if, for example,
(1) such son/daughter chose not to go to University/College, or
(2) the buyer’s mom or dad no longer could use or wanted to use such apartment as a residence
(due to their death or needs a retirement home), or
(3) intention to separate from family changed, or
(4) decision was made later not to downsize, or
(5) the buyer(s) reasonably changed his/their minds about such intended use, or
(6) the engaged son or daughter decided not to marry or decided to live elsewhere, or
(7) the workplace location changed or the intended relocation of workplace changed
The question is whether the facts or circumstances would indicate to the Canada Revenue Agency that the condo was originally being acquired from the builder for the primary purpose of personal use versus buying the unit for only a potential profit with the intention of assigning or flipping the deal. If a buyer purchases two or more new condo units or has a corporation purchase a residential unit, it is more difficult (perhaps impossible) to try to explain to the Canada Revenue Agency that the primary purpose in buying from the builder was to acquire the unit for personal use as a residence for an immediate family member.
The bottom line is that a listing realtor, seeing an offer from an assignee, should encourage the assignor/seller to sign back the offer with a condition for approval of the terms of the sale by the lawyer for the assignor/seller.
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Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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Toronto Real Estate — Mount Pleasant
by Dan Flomen
One of Toronto’s best-kept secrets is the area surrounding the Mount Pleasant and Eglinton corridor. It has everything one could need, including transportation, entertainment, restaurants, and the security to walk around at night without having to look over your shoulder.
Over 10 years ago, Urbancorp Developments created The Townhomes of 123 Eglinton. Situated between Redpath and Lillian, the project consisted of 184 stacked units developed in an unused parking lot behind the Union Carbide building. It wasn’t the first project in the area, but it did spawn the resurgence of developers looking at this part of town. Tridel followed with the removal of Union Carbide and the creation of a modern condominium, The Tower at 123 Eglinton, catering to both first-time and move-up buyers. Several small builders then bought infill sites and developed them into townhomes and small condos.
Four projects are now under construction in the immediate vicinity. Although each is unique unto itself, all share in the belief that this area is a booming market with much to offer. 900 Mount Pleasant by Plazacorp, Chateau Royal by Panterra Federated Properties, 88 on Broadway by Cityzen and Myriad, and Panache by Stanford Homes will eventually become home to hundreds of new residents.
Situated just a couple of blocks north of Eglinton, 900 Mount Pleasant will have a dramatic visual impact on the surrounding area. Immediately to the east are some of Toronto’s fastest-selling homes, and to the west are a growing number of new projects and the shops of Yonge Street. 900 Mount Pleasant will also incorporate a number of town manors, which will serve to enhance the overall look and quality of the project.
Chateau Royal, located three blocks south of Eglinton, is a higher end condo featuring 97 exquisite suites, many of which are one-of-a-kind. Its stucco exterior and traditional windows will blend in with the shops along Mount Pleasant.
“These suites are better described as bungalows in the sky, with finishes that need not be upgraded. Our purchasers are a mix of first-time and move-up buyers coupled with empty nesters. The one thing they have in common is that they appreciate the small building size coupled with its French charm,” says Michael Tullock, sales representative for Chateau Royal.
88 on Broadway launched with huge success. Its suites not only feature inspiring floor designs, but are also well-priced. Now under construction, the new, beautifully appointed tower will be only minutes to Mount Pleasant and Yonge Street and will appeal strongly to those who either live in the area or grew up there.
“What we are creating is the perfect project for almost all residents of the Mount Pleasant-Eglinton area,” says Sam Crignano, president of Cityzen Development Group. “88 on Broadway is designed to reflect the lifestyle people currently enjoy, but to bring it all under one roof. No need for a health club; 88 on Broadway has one. No need to leave the area to find home ownership. It is now right there on their doorstep.”
Panache, a contemporary building, is located one block west of Mount Pleasant directly on Eglinton Avenue. Its residents will be able to walk out the front door and be on one of the most vibrant streets in the city with restaurants and shops only steps away.
The Mount Pleasant corridor, once thought of as an alternative to Yonge Street, has come into its own. It continues to flourish in this thriving market and it’s an area for both users and investors to keep an eye on.
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Contact the Jeffrey Team for more information
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Bidding wars for Toronto’s housing market unlikely to slow down
Jared Lindzon – National Post
From the sidewalk outside 831 Logan Avenue, there is not much to recommend the three-storey home that sold this week.
Yes, there is Withrow Park just across the street to the south, and vibrant Danforth Avenue is a short walk to the north.
But the shingles are crumbling, windows are broken, there is no real kitchen and in some areas the ceiling is falling in. It was, all who saw it agreed, in need of a $300,000+ renovation.
Those negatives did little to deter potential purchasers: 17 offers were made on the property, which sold for more than $1-million, well over the asking price of $699,000.
And presumably the 16 bidders who were unsuccessful have already turned their attention to other properties and other competing offers.
Indeed, with the scarcity of available housing in desirable neighbourhoods near the downtown core, it seems naive to assume that the days of the bidding war will ever come to an end.
“This is quite an interesting city we live in,” said Duncan Fremlin, a broker for Re/Max Hallmark Realty Ltd. “The great attraction is to walk to work or hop on your bike and walk across the valley and get to work that way, so it seems that the closer you are to Yonge Street, the greater the demand.”
Mr. Fremlin says that in his 24 years in the business he can only recall a brief six-month period following the economic downturn when demand in those neighbourhoods slowed down.
“The phones stopped ringing for maybe six months or so,” he said. “That was really the only serious blip that I remember in the last many years for real-estate.”
But with limited houses available in the most desirable neighbourhoods in Toronto, bidding wars are the new normal.
“It’s worth what someone is willing to pay for it, but ultimately if there’s no supply, we’re going to continue to see this,” said David Fleming, a sales representative for Bosley Real Estate Ltd. “Unless half of Riverdale is magically listed at the same time, we’re going to continue to see this, and I don’t think anyone blinks when they see 10 offers on a property.”
Part of what makes the properties in these neighbourhoods so valuable is the fact that there is no room for them to grow, explained Mr. Fleming.
“The reality is, if you want to take Leaside as an example, there’s only 4,000 homes in Leaside, there are never going to be 5,000 homes, it’s just never going to change,” he said. “So you can build condos anywhere in the city because you’ve got enough sky, but there’s only so much ground to work with.”
With so much competition in the Toronto housing market, Mr. Fleming explained that people tend to get emotionally tied to certain properties, which leads many to pay more than they can afford.
“If you have a couple with one kid and a baby on the way, and you’re looking at school districts, and your looking up the tree-lined streets, and it’s summer and it’s nice out and your carrying gelato while your walking down the street, that’s when people will pay significantly more than they ever intended,” he said.
“When you’ve got a couple that’s made offers on six different properties and lost, if they lost six times, that seventh time around they might say, ‘I’m tired of this….’ and they might end up paying $20,000 more than they ever intended on paying.”
Mr. Fleming feels for the families he has witnessed lose a house they had their eye on, having represented a family that lost a 17-way bidding war over a house in the Junction Triangle in May that was listed at $469,000, and eventually sold for $611,000.
While it’s easy to get attached to a particular house or neighborhood, Toronto Real Estate Board President Elect Richard Silver says it’s important for buyers to know their limit.
“I would just say know exactly how much it is your ready to pay, what it is you can afford, and whatever price you offer has to be one that you live with,” he said. “If you hear that it sold for more the next day than it should not be an offer that you’ve said, ‘oh, I would have paid that.”
———————————————————————————————————————
Contact the Jeffrey Team for more information – 416−388−1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
———————————————————————————————————————
Incoming search terms
Related posts:
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