Posted on
May 4, 2024
by
Marie Taverna
The federal Budget 2024, delivered April 16, 2024, proposes significant changes to the capital gains tax.
When an individual, business or corporation sells an investment for more than they bought it for, the profit is capital gains.
For example, an investment can include assets such as:
- a cottage or an investment property
- stocks
- bonds
- mutual funds
The capital gains tax doesn’t apply to the profit earned by individuals through the sale of their primary residence or earned profit from tax-sheltered RRSPs or RESPs.
Currently, 50 per cent of capital gains are taxable.
Example
Your client bought a ski cabin as a second home or an investment for $500,000 and later sold it for $700,000, seeing a $200,000 profit. They're taxed on 50 per cent of the $200,000 profit or $100,000, which is added to their income.
The federal budget proposes to increase the capital gains inclusion tax rate as of June 25, 2024:
- for individuals, the first $250,000 of capital gains will continue to be taxed on 50 per cent of their capital gains. For capital gains exceeding $250,000, the inclusion rate is 66.67 per cent.
- for corporations and trusts, the inclusion rate will increase to 66.67 per cent from 50 per cent for all capital gains.
Example
Your client bought a ski cabin as a second home or an investment for $500,000 and later sold it for $800,000, seeing a $300,000 profit. They'll be taxed at a rate of 50 per cent on $250,000 of profit and at a rate of 66.67 per cent on $50,000. The higher rate applies to every dollar above $250,000 in capital gains.
Principal residence: if your client inherits their parents’ principal residence as a beneficiary, your client will be exempt from the capital gains tax when the title transfers.
Not a principal residence: if your client inherits a vacation home or an investment property as a beneficiary from their parent(s) and it wasn't a principal residence, and your client sells the property, they must pay capital gains if the value of the property has increased.
For a business, the capital gains tax is charged on the difference between the cost of establishing the business and the sale price.
Currently, the lifetime capital gains exemption lets Canadians exempt up to $1,016,836 in capital gains on the sale of small business shares and farming and fishing property.
This tax-free limit will increase to $1.25 million on June 25, 2024, and will continue to be indexed to inflation.
To encourage entrepreneurship, this incentive will reduce the inclusion rate to 33.3 per cent on a lifetime maximum of $2 million in eligible capital gains.
Combined with the enhanced lifetime capital gains exemption, when this incentive is fully rolled out, entrepreneurs will have a combined exemption of at least $3.25 million when selling all or part of a business.
The proposal would increase the average federal–provincial marginal tax rate on capital gains above $250,000 of someone earning $1 million a year, to 35.7 per cent.
For corporations and trusts, the capital gains tax inclusion rate is increasing to 66.67 per cent from 50 per cent.
Transitional rules will apply to taxation years that begin before June 25, 2024, and end after June 24, 2024, such that capital gains realized before June 25, 2024 would be subject to the 1/2 inclusion rate and capital gains realized after June 24, 2024 (net of any losses) would be subject to a 2/3 inclusion rate.
Changes are effective June 25, 2024. For tax years beginning before and ending on or after June 25, 2024, transitional rules will apply. Additional details will be released in the coming months.
Posted on
May 2, 2024
by
Marie Taverna
Modest increase in April home sales in the Fraser Valley takes lead from cooler spring weather
SURREY, BC – Supply of available homes in the Fraser Valley market continued to build last month, however buyers remained relatively hesitant, leading to a cooler resale market in April.
The Fraser Valley Real Estate Board recorded 1,471 transactions on its Multiple Listings Service® (MLS®) in April, up 5 per cent from March, but off by 5 per cent compared to April 2023. While sales were the third lowest recorded for an April in the last decade, inventory continues to build, reaching levels not seen since September 2020.
Active listings were 7,313, up by 18 per cent over last month and 17 per cent above the 10-year average. “We are seeing a relatively calm and balanced market right now,” said Jeff Chadha, Chair of the Fraser Valley Real Estate Board. “Which means buyers have time to shop around and purchase a home without the pressure of a few years ago, and while prices are holding fairly steady across all property types.” New listings helped bolster overall inventory, increasing 33 per cent in April, to 3,976.
With a sales-to-active listings ratio of 20 per cent, overall market conditions are balanced.
The market is considered balanced when the ratio is between 12 per cent and 20 per cent. “There is a lot of caution in the market right now,” said FVREB CEO Baldev Gill. “Buyers are hesitant to purchase a home until the Bank of Canada lowers its rate — however we encourage anyone looking to get into the market to talk to their REALTOR® and their financial professional about what rates are available today.”
The average number of days homes are spending on the market continues to decline, with single-family detached homes spending 23 days on the market, down from 27 days in March, apartments spending 23 days on the market, down from 26 days in March and townhomes moving more quickly at 19 days, down from 20 days on the market in March.
Overall Benchmark prices edged up again in April, by 0.5 per cent from March and up 1.5 per cent over April 2023. MLS® HPI Benchmark Price Activity
• Single Family Detached: At $1,532,700, the Benchmark price for an FVREB single-family detached home increased 1.0 per cent compared to March 2024 and increased 5.3 per cent compared to April 2023.
• Townhomes: At $854,700, the Benchmark price for an FVREB townhome increased 0.9 per cent compared to March 2024 and increased 4.9 per cent compared to April 2023.
• Apartments: At $561,900, the Benchmark price for an FVREB apartment/condo increased 1.2 per cent compared to March 2024 and increased 5.7 per cent compared to April 2023.
TheFraser Valley Real Estate Board is an association of 5,183 real estate professionals who live and work in the BC communities of Abbotsford, Langley, Mission, North Delta, Surrey, and White Rock.
Read the full press release and stats here: https://bit.ly/3QtCpaS
Posted on
May 2, 2024
by
Marie Taverna
NEW LISTING 1508-2789 Shaughnessy Street Port Coquitlam BC $699,900.00
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The large floor to ceiling windows allows the natural light to stream in.
Gas range cook-top, gleaming white stone counter tops, stainless steel appliances and tall cabinets are featured in the kitchen.
The primary bedroom has two closets with organizers.
Ensuite withsoaker tub/shower. Second bedroom would be a great nursery or home office space.
Second bath with walk-in shower. Tiled entrance. In-suite laundry.
Enjoy your morning coffee watching the sun come up on your sundeck.
Building includes gym, amenity room, garden terrace and more.
Lions Park is at your doorstep.
Perfect for kids and dogs to visit. Shopping and restaurants across the street.
Easy access to major highways and transit.
Contact your Realtor to book an appointment...
Posted on
May 2, 2024
by
Marie Taverna
Actively listed homes for sale on the MLS® in Metro Vancouver continued climbing in April, up 42 per cent year-over-year, breaching the 12,000 mark, a number not seen in the region since the summer of 2020.
Greater Vancouver REALTORS® (GVR) reports that residential sales in the region totalled 2,831 in April 2024, a 3.3 per cent increase from the 2,741 sales recorded in April 2023. This was 12.2 per cent belowthe 10-year seasonal average (3,223).
“It’s a feat to see inventory finally climb above 12,000. Many were predicting higher inventory levels would materialize quickly when the Bank of Canada began its aggressive rate hikes, but we’re only seeing a steady climb in inventory in the more recent data,” Andrew Lis, GVR’s director of economics and data analytics said. “The surprise for many market watchers has been the continued strength of demand along with the fact few homeowners have been forced to sell in the face of the highest borrowing costs experienced in over a decade.”
There were 7,092 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in April 2024. This represents a 64.7 per cent increase compared to the 4,307 properties listed in April 2023.
This was 25.8 per cent above the 10-year seasonal average (5,637).
The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 12,491, a 42.1 per cent increase compared to April 2023 (8,790).
This is 16.7 per cent above the 10-year seasonal average (10,704).
Across all detached, attached and apartment property types, the sales-to-active listings ratio for April 2024 is 23.5 per cent. By property type, the ratio is 17.6 per cent for detached homes, 31.0 per cent for attached, and 26.0 per cent for apartments.
Analysis of the historical data suggests downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
“Another surprising story in the April data is the fact prices continue climbing across most segments with recent increases typically in the range of one to two per cent month-over-month,” Lis said. “The one segment that didn’t see an uptick in prices in April were apartments, which saw a 0.1 per cent decline month-over-month. This moderation is likely due to a confluence of factors impacting this more affordability sensitive segment of the market, particularly the impact of higher mortgage rates and the recent boost to inventory levels, tempering competition somewhat.”
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,205,800. This represents a 2.8 per cent increase over April 2023 and a 0.8 per cent increase compared to March 2024.
Sales of detached homes in April 2024 reached 814, a 0.7 per cent increase from the 808 detached sales recorded in April 2023. The benchmark price for a detached home is $2,040,000. This represents a 6.3 per cent increase from April 2023 and a 1.6 per cent increase compared to March 2024.
Sales of apartment homes reached 1,416 in April 2024, a 0.2 per cent increase compared to the 1,413 sales in April 2023. The benchmark price of an apartment home is $776,500. This represents a 3.2 per cent increase from April 2023 and a 0.1 per cent decrease compared to March 2024.
Attached home sales in April 2024 totalled 580, a 16 per cent increase compared to the 500 sales in April 2023. The benchmark price of a townhouse is $1,127,200. This represents a 4.3 per cent increase from April 2023 and a 1.3 per cent increase compared to March 2024.
Download the April 2024 stats package
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The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Greater Vancouver REALTORS® (GVR), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the GVR, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the GVR, the FVREB or the CADREB.