"Lorne was recommended to us by our trusted friend and realty team in Saskatoon. From the first conversation, we could tell that Lorne was well-connected locally, detail-oriented, and very knowledgeable about about home construction & repair costs; but most importantly, he genuinely cared about what we wanted/needed in a home and did everything in his power to make it happen, while still ensuring we were making a solid investment for the future.

We were moving from Coquitlam without knowing anything about the island and just knew that we needed to be within an hour’s drive of Victoria. We had a wish list and only a few short days to look and with only that to go on, in a very hot and very fast-moving market, Lorne lined up some incredible picks for us – making sure we made the most of our short house hunting visits to the island.

He was on-time, organized, prepared, and always quick to point out what repairs/costs might need to be done, what the commute would be like, and what the future might hold for each neighbourhood, including resale values based on historical data and his knowledge of the market. He saved us from making a purchase that would have cost a fortune in repairs and found us the most incredible home in Sooke that checked all of our boxes and more. He had even gotten into the house before us on the possession date to do a thorough inspection and ensure the sellers left it in top condition for us.

He is great company, a killer negotiator, and a very savvy businessman but more than anything, Lorne truly cares that you are happy with your purchase. No pressure, no expectation, and no bullshit; just genuine customer service.

What more can we say but: HIRE THIS MAN! It will be one of the smartest decisions you’ve ever made."  

Thanks again for everything Lorne – can’t wait to see you again soon!

Best,

Elyse & Scott
Elyse Renouf, MBA

Competitive Pricing Still Key in 

Victoria's Hot Real Estate Market

A total of 1,174 properties sold in the Victoria Real Estate Board region this June, an increase of 29 per cent compared to the 910 properties sold in June last year.

"When we look at month over month numbers, sales are down almost 9 per cent in June compared to the record breaking sales we saw in May, which may be due to the very low inventory available," notes Mike Nugent, 2016 President of the Board. "It's likely that sales would be higher were there more on the market to buy, but with the current conditions people may be hesitant to give up the homes they have."

Inventory levels remain lower than the year previous, with 2,289 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of June 2016, 42.8 per cent fewer than the 4,003 active listings at the end of June 2015.

"June marks the halfway point for 2016. By this time last year 4,282 properties had sold," adds Nugent. "In the same six months this year, 6,181 properties have sold. If sales continue at a similar rate, we may meet the total sales from last year by the end of the summer. However, this may depend on available inventory, which continues to decrease."

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in June, 2015 was $594,700. The benchmark value for the same home in June 2016 has increased by 21.9 per cent to $724,900.

"Even in this market, price and strategy are important," says Nugent. "It's smart to engage a local REALTOR® to identify a price point and marketing strategy to sell your property. We have seen many multiple offer situations and record breaking numbers in the past few months, but there are properties that sit unsold. Sellers trying to test the upper price limits in their specific range will find that buyers are as discerning as ever. Even in this market there is no guarantee of sale." 

Thanks to Tony Spagnuolo, Barrister & Solicitor at www.bcrealestatelawyers.com for permission to use this article

Most individuals who sell real estate are aware that a sale of a principal residence does not attract income tax.

The Income Tax Act requires the individuals to file a prescribed form with their income tax return for the year in which the principal residence is sold. In practice, however, the vast majority of individuals who sell their principal residence will merely ignore the requirement to file the proper forms under the assumption that the sale is not taxable.

In order for a property to qualify as a principal residence during any particular year it must:

1. be a housing unit, a leasehold interest therein, or a share of stock of the co-operative housing corporation. The Canada Revenue Agency (CRA) interprets the term housing unit as being a house, an apartment, condominium or cottage, a mobile home or houseboat; and
2. be “ordinarily inhabited” during the year by the individual, the individual’s spouse or former spouse, or the individual’s dependant child. The CRA has adopted a very liberal approach as far as administering what is meant by the term “ordinarily inhabited”. For example, a summer cottage or winter home which is used (by the owner) for a portion of the year (ie a period of two weeks appears to qualify), could meet the definition of “ordinarily inhabited”. Furthermore, properties occupied for a portion of the year because they were purchased late or sold early in the year will also qualify.

The principal residence can include land upon which a housing unit is situated if the land contributes to the “use and enjoyment of the housing unit as a residence”. However if the land exceeds one and one quarter acres, in order for the excess to qualify, the onus is on the individual to prove that the excess was necessary for the “use and enjoyment as a principal residence”.

For the years subsequent to 1981, an individual may not designate more than one property as a principal residence with respect to that year.

Tax issues may arise when the use of a property is changed from a principal residence to income earning, or vice versa. These are described below.

Conversion of Principal Residence to Income Earning Use

Situations do arise whereby individuals will commence leasing their principal residence, for example where they have temporarily moved to another location.

In such cases the Income Tax Act provides that the individual is deemed to have sold their principal residence at a price equal to its current value and to have reacquired it at a cost equal to that same value. Assuming the principal residence has increased in value from the original purchase date, the above treatment will result in a gain. This gain, however, will generally be exempt from tax pursuant to the principal residence rules. Any subsequent gain though, has the potential to be taxable.

To alleviate the above, the Income Tax Act contains an elective provision under which the individual is considered not to have sold (for tax purposes) his or her principal residence and thereby not to have changed its use. Furthermore this particular section of the Income Tax Act provides that for a period of four years beyond the date of the deemed sale, the individual may continue to consider the property as a principal residence even though it was not ordinarily inhabited by the individual.

To utilize the above, the individual should enclose with the income tax return for the year in which he or she moved out, correspondence in the form of a letter indicating that they are electing pursuant to section 45(2) of the Income Tax Act with respect to the above noted property.

Conversion of Income-Earning Property to Principal Residence

There are also situations where individuals will move into a property that originally was being used to produce rental income. Under these circumstances, similar to the above, individuals will be faced with a deemed sale at the time the property is converted to a principal residence. However, provided the individual has not claimed what is known as capital cost allowance, he or she may elect that for tax purposes there is no disposition (sale) and avoid any potential taxable gain. Furthermore, the election also provides that the property can be treated as a principal residence for up four years prior to the year the individual commenced to occupy it as a principal residence.

Please remember the Income Tax Act may be changed at any time by the federal government. The information above is accurate as of the date of writing but please review the government website or discuss your situation with your accountant to ensure the proper amount of taxes are being paid. If you do not have an accountant, we would be happy to refer you to our partners, Newport Group of Chartered Accountants, contact us at 310-HOME (4663).

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The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult a lawyer for individual advice regarding your own situation.

Copyright © 2005 by The Spagnuolo Group of Real Estate Law Firms. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement.

Competitive Pricing Still Key in Victoria's Hot Real Estate Market

July 4 2016, Victoria, BC

A total of 1,174 properties sold in the Victoria Real Estate Board region this June, an increase of 29 per cent compared to the 910 properties sold in June last year.

"When we look at month over month numbers, sales are down almost 9 per cent in June compared to the record breaking sales we saw in May, which may be due to the very low inventory available," notes Mike Nugent, 2016 President of the Board. "It's likely that sales would be higher were there more on the market to buy, but with the current conditions people may be hesitant to give up the homes they have."

Inventory levels remain lower than the year previous, with 2,289 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of June 2016, 42.8 per cent fewer than the 4,003 active listings at the end of June 2015.

"June marks the halfway point for 2016. By this time last year 4,282 properties had sold," adds Nugent. "In the same six months this year, 6,181 properties have sold. If sales continue at a similar rate, we may meet the total sales from last year by the end of the summer. However, this may depend on available inventory, which continues to decrease."

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in June, 2015 was $594,700. The benchmark value for the same home in June 2016 has increased by 21.9 per cent to $724,900.

"Even in this market, price and strategy are important," says Nugent. "It's smart to engage a local REALTOR® to identify a price point and marketing strategy to sell your property. We have seen many multiple offer situations and record breaking numbers in the past few months, but there are properties that sit unsold. Sellers trying to test the upper price limits in their specific range will find that buyers are as discerning as ever. Even in this market there is no guarantee of sale."