What the new mortgage rules mean for home buyers?

                                                                                              From MoneySense

Today, the Office of the Superintendent of Financial Institutions (OSFI) introduced new rules on mortgage lending to take effect next year.

OSFI is setting a new minimum qualifying rate, or “stress test,” for uninsured mortgages (mortgage consumers with down payments 20% or greater than their home price).

The rules now require the minimum qualifying rate for uninsured mortgages to be the greater of the five-year benchmark rate published by the Bank of Canada (presently 4.89%) or 200 basis points above the mortgage holder’s contractual mortgage rate. “The main effect will be felt by first-time buyers,” says James Laird, co-founder of Ratehub.ca. “No matter how much money they put down as a down payment, they will have to pass the stress test.” The effect of the changes will be huge, resulting in a 20% decrease in affordability, meaning a first-time homebuyer will be able to buy 20% less house, explains Laird.

MoneySense asked Ratehub.ca to run the numbers on two likely scenarios and find out what it would mean for a family’s bottom line. Here’s what they found:

SCENARIO 1: Bank of Canada five-year benchmark qualifying rate

In this case, the family’s mortgage rate, plus 200 basis points, is less than the Bank of Canada five-year benchmark of 4.89%.

According to Ratehub.ca’s mortgage affordability calculator, a family with an annual income of $100,000 with a 20% down payment at a five-year fixed mortgage rate of 2.83% amortized over 25 years can currently afford a home worth $726,939.

Under new rules, they need to qualify at 4.89%
They can now afford $570,970
A difference of $155,969 (less 21.45%)

SCENARIO 2: 200 basis points above contractual rate

In this case, the family’s mortgage rate, plus 200 basis points, is greater than the Bank of Canada five-year benchmark of 4.89%.

According to Ratehub.ca’s mortgage affordability calculator, a family with an annual income of $100,000 with a 20% down payment at a five-year fixed mortgage rate of 3.09% amortized over 25 years can currently afford a home worth $706,692.

Under new rules, they need to qualify at 5.09%
They can now afford $559,896

A difference of $146,796 (less 20.77%)

If a first-time homebuyer doesn’t pass the new stress test, they have three options, says Laird. “They can either put down more money on their down payment to pass the stress test, they can decide not to purchase the home, or they can add a co-signer onto the loan that has income as well,” says Laird. The stress test will be done at the time of refinancing as well, with one exception. “If on renewal you stay with your existing lender, then you don’t have to pass the stress test again,” says Laird. “However, if you change lenders at mortgage renewal time, you may have to pass the stress test but it’s not crystal clear now if this will be the case for those switching mortgage lenders.”

So if you’re a first-time homebuyer, it may mean renting a little longer and waiting for your income to go up before you’re able to buy your first home. Alternatively, some first-time buyers will buy less—maybe a condo instead of a pricier detached home. Or, the new buyers may opt to get a co-signer to qualify under the new rules.

But whatever you do, if you’re a first-time buyer, make sure you understand what you qualify for using the new regulatory rules, and get a pre-approved mortgage before you start house-hunting. “This shouldn’t be something that shocks you partway through the home-buying process,” says Laird.

And finally, do your own research and run the numbers on your own family’s income numbers. You can use Ratehub.ca’s free online mortgage affordability calculator to calculate the impact of the mortgage stress test on your home affordability.

出租房在销售之后如何降低Capital Gain税收

请注意了，其实不是在出租房子卖掉以后才有办法，而是如果这套房子曾经是你的主要居住房子，并且居住时间超过7年+1以上的话。具体请看看下面的问答：

How to pay less capital gains tax on a rental property （If it used to be your principal residence, this exemption could save you a huge tax bill）

Q: I own a house in Quebec, which is rented and I rent a townhouse in B.C. (I’ve been away since Oct. 2013—I’m an imported grandmother). The house is up for sale. Will I have to pay capital gains tax when I sell the house? Is there a way around it? I will make about $25,000 in gains as the market is poor in my neighbourhood in Quebec. I’ve owned the house since 2006. Any advice is appreciated. —Wendy T.

A: Hi, Wendy. Sounds like the draw of family pulled you out west but I’m sure the great west coast weather helped keep you in British Columbia, which is why you’re selling your Quebec house. The good news is you will be required to pay capital gains tax on the sale of this home. Why is this good news? Because it means you made money on the sale and purchase of this asset.

Based on what you’ve told me, you estimate about a $25,000 gain between the purchase price and the sale price. If we ignore all other factors, this means you’ll pay your marginal tax rate on $12,500. If you earn less than $38,000 per year, this translates into an extra $1,255 in income tax during the year you sold the home.

But things aren’t equal. The Canada Revenue Agency offers a tax exemption on the sale proceeds of each family’s primary residence. In simple terms, this is calculated based on the number of years the home was your primary residence, plus one year. In your case, you can exempt eight years of the total 11 years you owned the home (seven years of living in the home, plus one makes eight years that qualifies for the exemption.) That reduces the income tax owed from $1,255 to just under $350.

Better still, if the home is mortgage-free you get to pocket the entire proceeds of the sale, minus $350 and any transactional costs. You could use this money as part of your retirement fund, to put a down payment on another home in B.C., or simply as fun money. All in all, not bad situation to be in.

Of course, it’s always a good idea to pay a professional to get precise, personalized advice before tackling any tax saving strategy. All the best and have fun on the west coast.

Most Chinese buyers want Calgary real estate for own use, review finds

The top reason foreign buyers from China want to get into the Canadian housing market is education, not investment, according to data from a popular global real estate listings website.

CP, THE CANADIAN PRESS

Figures released Tuesday by the Chinese website Juwai.com in partnership with Sotheby’s International Realty Canada found schooling was the primary motivation for potential Chinese homebuyers who viewed property listings in major Canadian cities in 2016.

It found housing needed for educational purposes was the most cited reason 46 per cent of Chinese users were looking at properties in Montreal, followed by 44 per cent in Vancouver, 41 per cent in Toronto and nine per cent in Calgary.

The second most common motivator was “own use,” which could mean the home would be used as a second or third property. Sixty-two per cent of those looking for homes in Calgary cited this was their main reason, followed by 37 per cent for Toronto, 25 per cent for Vancouver and 34 per cent for Montreal.

Investment was the top reason listed by a quarter of home seekers, with 27 per cent saying it was the main reason for their property searches in Vancouver and Toronto, 23 per cent in Montreal and 21 per cent in Calgary.

Brad Henderson, president at Sotheby’s International Realty Canada, says the figures show that there have been misconceptions about why Chinese homebuyers look to Canadian real estate.

“I really think a lot of perception that people have around foreign buyers and specifically buyers from mainland China are informed by more anecdotal information and not statistics,” he said.

The data also indicated the majority of Chinese property searches were for Canadian homes priced below $655,050.

“While home buyers from mainland China have been identified as a notable segment of foreign purchases within the luxury property markets of Vancouver and Toronto, Juwai.com data dispels the assumption that Chinese interest is limited to the high-end segment,” said the report.

“Instead, it implies that conventional real estate dominates demand.”

The figures also found the implementation of a 15 per cent foreign-buyers tax last August in Vancouver had a swift impact on the interest of those searching for Canadian properties.

Juwai.com says that immediately following the announcement of the tax in July, its listing inquiries for Vancouver plummeted 81 per cent year-over-year and 78 per cent in August year-over-year when the tax came into effect.

It also saw that listing searches increased in other Canadian cities, with property inquiries soaring 1050 per cent and 420 per cent year-over-year in Calgary during August and September.

Even so, Henderson says he anticipates the number of Vancouver searches to pick up again, citing a modest increase in the number of inquiries in the last quarter of 2016 which he attributed to prospective buyers having digested the impact of the foreign-buyers tax.

“So we believe that in 2017, we’ll probably see an increased interest in properties in Vancouver.”

The data also found that Canada ranked third by users as the most popular destination for international homebuying, after the United States and Australia.

Juwai.com says the data was compiled over the course of 2016 from its more than two million monthly Chinese visitors.