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        <title>Real Estate Blog</title>
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    <guid>https://www.airdrierealestate.ca/blog/airdrie-real-estate-market-update.html</guid>
    <link>https://www.airdrierealestate.ca/blog/airdrie-real-estate-market-update.html</link>
        <title>Airdrie Real Estate Market Update</title>
    <description> <![CDATA[ 


Another month is over, so let's look at the Airdrie real estate market to see what's new. It's no surprise that the market is hot, but it's still heating up, and there are other developing trends that buyers and sellers should be aware of. We're going to dive into what this means for home buyers and sellers below, so keep reading to find out all you need to know about the current state of the real estate market in April 2022


For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.


Your Insider Source for Airdrie Real Estate Market Statistics - Updated Going Into May 2022


April 2022's new listings in Airdrie numbered around 334, which is slightly lower than this time last year, a drop of 1.2. However, it's an increase compared to the past few months.


It's not enough to keep up with demand, however. Airdrie homes for sale are being snapped up as quickly as they come on the market, and the inventory is ever-shrinking. There may have been 334 new listings in April, but Airdrie also saw 321 closed sales, which is a much greater number than last April—an increase in sales of 23.5. Current inventory is sitting at just 247 homes on the market, which is a decrease of almost a third compared to the numbers last April.


Currently, the market has roughly 0.77 months of inventory available, which means that if homes stopped being listed today, it would take just a little over three weeks for all the homes currently on the market to sell. Four to six months of inventory is the general benchmark for a balanced real estate market, which just goes to show how far the Airdrie market is tipped in favour of sellers at this time. Take this into consideration when buying or selling your Airdrie home.


Investing in Airdrie real estate is an excellent choice because our homes remain in high demand. The benchmark price for Airdrie homes for sale hit $480,600 in April, an astonishing 29.3 increase year-over-year, and it's only rising higher. With a shrinking supply to meet the growing demand, it's no wonder that prices continue to climb. It's a good time to be a seller, and if you're buying, it might be a good idea to buy sooner rather than later.


There are also some interesting trends in what kinds of homes are being sold in Airdrie. Last year, the highest number of sales came from homes in the $300,000–$500,000 range, while this year's biggest sellers are homes in the $400,000–$600,000. Luxury homes are more attractive than ever, with the number of sales in the $600,000+ range roughly quadrupling compared to last year.


Airdrie Real Estate Forecast: What's Coming Next?


After going over the current data, it's not much of a stretch to think that the next few months will continue to be a hot market favouring sellers. However, factors like inflation and appreciation can help determine the best time to buy or sell property in Airdrie, so keep these in mind. Want to know what your Airdrie property is worth? Compare your home to others currently for sale with a free market analysis.


Stay Up-to-Date on the Airdrie Real Estate Market With Justin Havre &amp; Associates of RE/MAX First


The real estate market is always changing, and it can be difficult to keep track of all the latest trends. Keep checking back or contact Justin Havre &amp; Associates of RE/MAX First now to stay up-to-date with the latest real estate news.


For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.


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    <pubDate>Thu, 19 May 2022 15:55:00 -0600</pubDate>
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    <guid>https://www.airdrierealestate.ca/blog/use-a-drone-to-sell-a-home.html</guid>
    <link>https://www.airdrierealestate.ca/blog/use-a-drone-to-sell-a-home.html</link>
        <author>justin@justinhavre.com (Justin Havre Real Estate Team)</author>
        <title>4 Tips for Using a Drone to Sell a Home</title>
    <description> <![CDATA[ 


Drones have become exceptionally popular as of late, especially as the cost to manufacture these devices plummets in price. But despite the seeming ubiquity, we're only scratching the surface of how they can be used to improve any number of industries. The good news is that real estate professionals were one of the first to spot and develop the potential for easy aerial videos. Those interested in learning more about how a drone can be used to secure a better bid on a Luxstone home should consider the following tips.


Be Open


Drones for the average single-family homes may seem unnecessary for many home sellers, especially if they're not in a seller's market. But drone footage can be useful regardless of the home's market value. It ultimately helps attract people who are serious about making an offer rather than the merely curious. Real estate agents will vouch that this selling tactic has made it faster to sell homes on average, simply because it streamlines the potential buyer experience before scheduling open house visits. And while there are some homes that may not justify the expense of this footage, it helps if sellers keep an open mind before discounting the option.


Remember the Rules


Canada has had drone regulations in place since the 1990s when drones were used primarily for the military. For some neighborhoods, local officials may impose heavy regulations on how and where drones can fly. Montreal's law enforcement may issue fines of up to $1,000 for drone operators—without the benefit of a warning. There are a few general rules that home sellers should take note of before getting started:




Homeowners cannot fly a drone in a restricted airspace


Drone operators are required to yield to children and animals whenever in use


Operators are not allowed to take any photos or videos of neighbors without their express permission




Consider a Professional


While it will be more expensive, this can be a great option for many sellers. As noted, the rules can become complicated in certain neighborhoods, and the right operator will take on the responsibility to capture captivating shots without breaking any of the laws. For example, there may be specific times of the day when a drone is prohibited from flying. A professional will also understand how to edit the footage to create the images that will pull a buyer in and bond them to the property.


Know What to Show


Ideally, sellers should be showing buyers the reality of their home and even the larger neighborhood. This may include showing the specific amenities near the home, such as community centers or grocery stores. It can also highlight the conditions of the roads and sidewalks that surround the home. Let the drone capture the beautiful colors in the garden and the strength and stability of the roof and sides of the home.


A real estate agent can be a serious asset to sellers who want to use drone footage to sell their home. They can let sellers know the top priorities of the average in the neighborhood. For example, are sellers in an area where buyers want plenty of room to stretch out or would they rather be in a city center where everything is right outside their door? This information is vital to sellers who want to portray the home in the best possible light.


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    <pubDate>Thu, 20 Feb 2020 08:07:00 -0700</pubDate>
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    <guid>https://www.airdrierealestate.ca/blog/the-foreclosure-process.html</guid>
    <link>https://www.airdrierealestate.ca/blog/the-foreclosure-process.html</link>
        <author>justin@justinhavre.com (Justin Havre Real Estate Team)</author>
        <title>Received Notice to Foreclose on Your Home? A Guide to the Process and Resolution Tips</title>
    <description> <![CDATA[ 


Canadian homeowners who fall behind on mortgage payments for one reason or another are likely to have a tough road ahead. Lenders will not wait long before taking action against those in default on their loans through one of two courses of action—a power of sale or judicial foreclosure—depending on the province in which the residence is located.


Residents of Prince Edward Island, Ontario, Newfoundland, New Brunswick and Labrador will likely face a foreclosure process known as a power of sale. Those residing in Quebec, Alberta, Nova Scotia, British Columbia and Saskatchewan are typically served with a judicial foreclosure. We shall explain the process of both actions and offer some potential solutions and remedies at a Morningside homeowner's disposal.


For informational purposes only. Always consult with an attorney, tax, or financial advisor before proceeding with any real estate transaction.


The Process of a Power of Sale in Foreclosure Proceedings


The power of sale gives owners a bit more of an opportunity to get themselves out of arrears through cooperation with the lender. While it's the most common type of Canadian foreclosure, it's not the cheapest to get through. Notice of a power of sale can come in as little as 15 days after the first late mortgage payment, but it's not yet too late to save the home.


First, owners should call the lender as soon as they receive the notice and request to negotiate a payment plan before the power of sale action begins. Many lenders will be amenable, as they don't want to deal with foreclosures either. Taking action fast might prevent expensive legal involvement, which will ultimately equate to further expenses for the homeowner.


Those with home equity in place will surely want to reclaim that investment and perhaps can use it to get the home out of arrears. Once served with a power of sale, borrowers have 37 days to tackle the resolution process before the lender can take any action to sell or remove owners from the home. In the case of statutory sales, owners have 45 days to get the funds requested by lenders and get the home in good standing again.


If no action is taken or efforts to pay back debt fail, after 37 days, lenders serve owners with a formal statement of claim for outstanding debt in addition to a notice of possession of the property. There will be a 20-day period at this point to give owners the chance to file a defence statement with the court, and this is an imperative step for those who want to stay in the home and protect their investment and equity.


Failure to reply leads to an automatic default judgment for lenders along with a writ of possession that leaves owners defenceless unless there is a serious issue with the lender. At this point, the lender can start the eviction process, auction the home, and use the funds to pay off the debt. Remaining funds (if any) from the sale's proceeds will then go to the borrower.


So, how do you prevent the power of sale notice from getting this far? Most commonly, homeowners utilize the equity in their home to establish a new first mortgage to pay off the defaulted mortgage or arrange for a second mortgage. These are effective options that should be explored immediately when financial issues begin to arise.


Judicial Foreclosure in Canada and Possible Solutions


In a judicial foreclosure, the process is wholly controlled by the courts, so it's vital owners don't ignore any notices sent. Doing nothing will default the owner's position and cement the loss of the home and any equity in it. The procedures will start when lenders file a claim statement with the court, and owners are then served with a copy of the statement. They have approximately 20 days to submit a formal reply in the form of a demand for notice or a statement of defence.


The owner's statement will then be reviewed, and if the courts deem it warranted, they may issue a redemption order giving the debtor time to resolve the situation by bringing the loan back into good standing. Redemption orders typically last six months, and this gives owners time to talk to a financial specialist who can help them consolidate their debts. Then, homeowners can deal with a mortgage professional to talk more about applying for a new mortgage to get out of foreclosure altogether.


Don't Wait Until It's Too Late to Save Your Home


Yes, you will have to invest a bit of money to explain your financial situation and then further pay financial and mortgage experts fees to save your home. However, if you have even a small amount of equity, it is well worth your time to take action the minute you realize you will be late on a payment rather than even waiting for that first notice to arrive.


For informational purposes only. Always consult with an attorney, tax, or financial advisor before proceeding with any real estate transaction.


 ]]> </description>
    <pubDate>Fri, 10 Jan 2020 09:16:00 -0700</pubDate>
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    <guid>https://www.airdrierealestate.ca/blog/sell-home-as-fsbo.html</guid>
    <link>https://www.airdrierealestate.ca/blog/sell-home-as-fsbo.html</link>
        <author>justin@justinhavre.com (Justin Havre Real Estate Team)</author>
        <title>Should You Sell Your Home as an FSBO?</title>
    <description> <![CDATA[ 


If you're selling your Sagewood home, you'll have to decide whether to sell your home as a for sale by owner, or FSBO. Some homeowners choose to sell their home without help from a real estate professional because real estate professionals require commission at the end of the transaction. If you're thinking about selling your home as an FSBO, here's what you need to know.


For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.


Pricing Is Critical


One of the most important reasons to hire a real estate professional is because real estate professionals have training that make it easier for them to price homes. Most homeowners are unable to accurately gauge the listing price of their home. Some homeowners just don't know, while others are tempted to list their home for a higher price than its value. Failure to price the home well could deflect buyers.


Listing Can Be More Difficult Without an Agent


In order for a homeowner to sell their home, buyers must be aware that the home is for sale. The primary way that home buyers find out about home sales in their area is through the MLS listings. Homeowners are not allowed to post their property on the MLS, which makes it much more difficult for home buyers to find out that the property is there. This means selling the home can take much longer than normal without important resources to market the home.


Negotiating Can Also Be Challenging


Real estate professionals are trained to be good negotiators. They're also practiced at it because they do it all the time. Many homeowners are not as experienced in the art of negotiation, nor do they understand the housing market well enough to properly negotiate a good price for their home.


Home sellers who don't know how to give and take during a negotiation may either lose out on their opportunity to sell their house for more money, or could lose the home sale altogether if the buyer walks away.


Work With a Lawyer


It's very important to work with a lawyer throughout the home sale process, and this is especially true if there's no real estate professional involved in the transaction. A good real estate professional will understand sensitive elements of the home sale process such as disclosures. Without a good real estate professional, it's even more important to utilize the services of a lawyer.


Have Questions? A Real Estate Agent Can Help


Real estate agents serve an important role in the home sale process. If you're not sure whether you would like to work with a real estate professional during the sale of your home, speak to a professional today.


For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.


 ]]> </description>
    <pubDate>Thu, 03 Oct 2019 09:31:00 -0600</pubDate>
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    <guid>https://www.airdrierealestate.ca/blog/real-estate-marketing-tips.html</guid>
    <link>https://www.airdrierealestate.ca/blog/real-estate-marketing-tips.html</link>
        <author>justin@justinhavre.com (Justin Havre Real Estate Team)</author>
        <title>4 Ways to Market Your Home</title>
    <description> <![CDATA[ 


When selling a home, homeowners tend to think that all responsibilities of marketing are left to their real estate agent to handle. While this may have been true in the past, it isn’t necessarily true now. Homeowners can actually help market their home in may different ways that their real estate agent will appreciate. Here are some of the different strategies homeowners can use to help market their home.


For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.


Hire a Professional Photographer


In real estate, just like real life, first impressions are everything. When a buyer sees a listing for a home, within seconds they’re passing judgement and deciding if it’s worth reading further into the listing. And how, exactly, can homeowners improve their chances of a first good impression? With high quality photos. And to get high quality photos, the homeowner needs to hire a professional photographer.


Professional photographers aren’t very expensive to hire, but they can improve a home’s chances of finding a buyer drastically. A professional photographer understands lighting, angles, and photo editing in order to produce the best photos possible, which can help result in better first impressions.


Use Social Media


After hiring a professional photographer and  getting the photos, don’t just use them on the official listing. Homeowners can make social media pages for their home to showcase it in other places. A Facebook page or a Pinterest post can be excellent places to showcase extra photos that didn’t make it onto the official listing due to space constraints. Homeowners can also use the opportunity to add text in order to talk about the home, what they love about it, fun facts, and more. Doing something like this can also add a more human essence to a listing and make it feel less cold and robotic to buyers.


Use the Multiple Listing Service


MLS, or the Multiple Listing Service, is a database that can only be accessed by real estate agents. Agents post homes they represent to the MLS and communicate with other agents through it in order to try to get homes bought and sold faster. When working with an agent, the agent will more than likely use the MLS without needing to be asked due to how convenient it is and how many advantages it provides. But homeowners should always bring it up with their agent just to make sure that it is for a fact on the MLS and hasn’t been forgotten.


Make the &quot;For Sale&quot; Sign Obvious


When a Canals home is for sale, it’s a given that it will have a “For Sale” sign out in the front yard. However, some home sellers don’t like the look of the sign in their yard because they don’t want it to affect their curb appeal, or they don’t want to advertise the home is for sale to just anyone who happens to pass by. However, next to online listings, the most common way buyers find homes for sale is by seeing them in yards as they drive to work or while running errands. Keeping the “For Sale” sign visible in a yard helps advertise the home, so it should never be skipped.


Homeowners don’t need to go to a university for four years to learn about marketing. Using these strategies can help homeowners market their home and assist their agent to help give the home the edge it needs to sell faster than it would have otherwise. For more ways to market a home, sellers shouldn’t hesitate to talk with their agent.


For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.


 ]]> </description>
    <pubDate>Thu, 19 Sep 2019 10:08:00 -0600</pubDate>
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    <guid>https://www.airdrierealestate.ca/blog/tips-for-getting-a-home-with-pets-ready-for-sale.html</guid>
    <link>https://www.airdrierealestate.ca/blog/tips-for-getting-a-home-with-pets-ready-for-sale.html</link>
        <author>justin@justinhavre.com (Justin Havre Real Estate Team)</author>
        <title>3 Tips for Getting a Home with Pets Ready for Sale</title>
    <description> <![CDATA[ 


Even animal lovers may be turned off by a property that once housed multiple pets. From odors to structural damage, animals can leave permanent marks wherever they go. Selling a home can be tricky, with lots of things to consider. Selling a home with pets can be a challange, so consider the following tips to when selling a home with pets.


Get a Second Opinion


Pet owners are typically all but immune to the smells and signs of their pets, which is why they should enlist the help of someone they know before cleaning their home. Since the other person's eyes, ears, and nose are unaccustomed to the property, they're more likely to catch problem areas the seller wouldn't. A second opinion doesn't necessarily have to come from a real estate professional, but they may be able to point out more strategic moves a seller can make to increase the quality of their offers.


Help the Pet


Pets may not know where they're going, but they know the home is in some kind of transition. Sellers will want to take them out of the home before Open Houses, which can make the pet extremely nervous. Their anxiety will only make the process worse, which is why they may need extra attention during this time.


This tip can be a difficult effort for sellers who already have plenty of other things on their to-do list, but it could also be one of the more important tasks. A distraught pet could cause more damage to a property during escrow—giving buyers a chance to renegotiate the price or back out of the sale. 


Hire Professional Assistance


It may take industrial grade equipment to really prepare the home:




Professional cleaners will neutralize odors, vacuum every floor, and air out each room properly.


Handymen and painters can reduce the lasting marks of structural damage.




Sellers can certainly tackle the cleaning and repairs too, but their efforts may not rival that of a professional's. 


Reunion home sellers with pets can certainly get a good price for their property if they take the time to prepare the space. These tips can help buyers see the potential of the home, and not the mess left behind by the animal friends who once lived there.


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    <pubDate>Thu, 18 Jul 2019 14:59:00 -0600</pubDate>
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    <guid>https://www.airdrierealestate.ca/blog/selling-in-a-buyers-market-read-these-tips-first.html</guid>
    <link>https://www.airdrierealestate.ca/blog/selling-in-a-buyers-market-read-these-tips-first.html</link>
        <author>justin@justinhavre.com (Justin Havre Real Estate Team)</author>
        <title>Selling in a Buyer’s Market? Read These Tips First</title>
    <description> <![CDATA[ 





There are many different types of markets that people can buy and sell homes in. Some are helpful, some are not. In a buyer’s market, there are more homes for sale than there are buyers looking for homes, allowing buyers to effectively have the pick of the litter and get the best deal. While this is great for buyers, sellers may not even think it’s possible to sell their home when there’s so much competition. However, this fortunately isn’t true. While it might be more difficult to sell in a buyer’s market, homeowners can arm themselves with strategies they can use to attract buyers and help their home sell.


For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.


Work With a Real Estate Agent


Selling a home is tricky. Going about selling a home in a buyer’s market is even trickier, especially when doing it alone. This is why all sellers should hire an experienced real estate agent. Real estate agents are a homeowner’s number one ally when it comes to selling a home. They understand the local housing market, what buyers are looking for, and how to make sure the home isn’t working against itself when it comes to attracting buyers.


Lower the Price, but Not Too Much


One way to get buyers’ attention is to lower a price. Buyers are always looking for the best possible deal to get the best home for their money, so lowering the price of the home to make it a good deal can be a good way to get buyers into a home. However, homeowners should be careful not to lower the home’s price too much because this can give buyers a feeling that the deal is too good to be true, which can be counterproductive. Lowering the price also means that the seller will get less money from the deal, and the homeowner needs to remember their own finances.


Stage the Home For Showings


In order to make sure buyers have a good first impression with the home, the owner should spend time staging it beforehand. Staging a home means decorating a home to make it appealing to a wider audience, and it can be done in many different ways. Here are some examples of different ways homeowners can stage:




Paint walls in neutral colors.


Fill closets halfway to show their capacity.


Put clothes hampers away.


Make sure there are no dishes in the kitchen sink.


Open curtains to let light in.


Make all the beds.




Staging can be an easy way to impress buyers once they’ve come to the home for a showing, and it can be as simple or as complex as the homeowner wants it to be.


Purchase a Home Warranty


When talking about home warranties, most people assume they’re for the home buyers to purchase. However, King Heights homeowners who want to sell their home in a competitive market may want to look into buying one. Having a home warranty can act as an extra incentive to make buyers consider the home because people like having protection in case something goes wrong. In exchange for buying a one-year warranty for approximately $475, the home can sell on average 16 faster than homes without warranties. The warranty can also increase the price the home sells for, so the seller can potentially make the money back.


If a homeowner knows what to expect from a buyer’s market, they can take the steps to prepare their home for the competition. Using these tips can help homeowners give their home the advantage it needs to stand out from the rest.


For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.


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    <pubDate>Thu, 14 Feb 2019 08:47:00 -0700</pubDate>
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    <guid>https://www.airdrierealestate.ca/blog/the-key-paperwork-you-need-to-sell-your-home.html</guid>
    <link>https://www.airdrierealestate.ca/blog/the-key-paperwork-you-need-to-sell-your-home.html</link>
        <author>justin@justinhavre.com (Justin Havre Real Estate Team)</author>
        <title>The Key Paperwork You Need to Sell Your Home</title>
    <description> <![CDATA[ 





Every province has its own idea of the key paperwork sellers need to transfer their home to the buyer. Despite the specific regulations that govern each home sale though, it helps to have a solid idea of what documents are most important to buyers and why. Whether they're required or not, sellers can use their paperwork as a way to convince buyers that they should take a chance—and maybe even offer more than the asking price.


For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.


The Buyer's Wish


The buyer wants to know what they're signing up for if they choose to buy the home, and the paperwork can serve as their guide. When a seller is upfront about their property taxes, utility bills, and their yearly maintenance costs, buyers can estimate if they have the income to meet the ongoing expenses of the home. Sellers should be careful when they present information to a buyer. It's usually best to boil down complicated information into the bare facts without making it seem as though they're hiding something.


Purchase Forms


The Standard Agreement of Purchase and Sale document is typically completed by the seller (with help from their real estate agent). This form will list everything included in the home sale. For example, in Canada, all fixtures are included in the sale unless the seller specifies otherwise. Any unusual or anomalous clause to the form should have been previously discussed and agreed to by the buyer. If the buyer is requesting the satellite dish on the top of the roof, this needs to be spelled out in this form.


Province Laws


Certain provinces require sellers to supply the original property assessment of the home, others require the seller to hire a surveyor to visit and provide their professional opinion. Sellers may even need to make a trip to their local municipal office to gather the required tax information. A seller will need to either research their local regulations or consult with a real estate professional to determine exactly what they need.


Title Troubles


The title company will do a full investigation of the validity of the title, during which time they'll look at a number of key factors:




Property disputes: Does a neighbor claim that the seller's hedge is actually theirs? Will an ex-spouse eventually claim that the seller didn't actually have the right to sell the home? These matters need to be resolved before the deed officially transfers.


Liens and debts: A financial institution can put a lien on a home for a number of reasons (and sometimes sellers aren't even aware that it was placed). The title company will check to see if there are any outstanding debts that need to be cleared first before the sale can be finalized.




Double-Checking the Details


The original paperwork for the home and the escrow paperwork have to be in full agreement, otherwise the sale can be drastically delayed. Sellers should be meticulous when it comes to filling out all of their forms to ward off this risk. Having the right real estate agent can make it easier to fill out the paperwork so there's less chance of a time-consuming mistake.


Luxstone home sale paperwork is complicated in today's day and age. No court wants to be tied up in a lengthy real estate battle, which is why the more straightforward sellers are, the more likely it is that they'll sell their home by their personal deadline.


For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.


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    <pubDate>Fri, 18 Jan 2019 10:51:00 -0700</pubDate>
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    <guid>https://www.airdrierealestate.ca/blog/how-vacation-homes-are-taxed-at-the-time-of-sale.html</guid>
    <link>https://www.airdrierealestate.ca/blog/how-vacation-homes-are-taxed-at-the-time-of-sale.html</link>
        <author>justin@justinhavre.com (Justin Havre Real Estate Team)</author>
        <title>How Vacation Homes Are Taxed at the Time of Sale</title>
    <description> <![CDATA[ 





Selling a vacation home is going to take a little more energy than selling a primary residence because the two are taxed so differently. The process becomes even more complicated if sellers generated rental income during their time of ownership. What are the tax implications of selling a second home? To understand the full implications of a sale, sellers should know the basics of capital gains, capital losses, and depreciation before putting the home up on the market.


For informational purposes only. Always consult with a certified tax expert before proceeding with any real estate transaction.


Capital Gains Tax: How It Works


How does capital gains tax work? A capital gain refers to the total cost of appreciation from the time the asset was purchased to the time it was sold, with the end result taxed based on the owner's income. So, if the home was purchased at $300,000 and sold for $500,000 (after deductions), the owner would have a capital gain of $200,000. In Canada, people selling their primary homes have generous leeway when it comes to deducting most (if not all) of their capital gains. However, a person selling a vacation home will not be given the same considerations. Selling your second home without capital gains taxes is next to impossible.


Capital Gains Tax: How It's Calculated


How are capital gains taxed? Capital gains are taxed at half the total value on a progressive income scale. In the case of the above example, it would be $100,000. Those in the top income brackets would end up paying a full 43 of the assessed capital gains, or $43,000 in capital gains tax. The most common way to reduce capital gains tax is to keep track of the seller's improvements to the home. So if a seller completed a $15,000 kitchen remodel, they can add that cost to the original sale price of the home, thereby lowering the total capital gains. (The taxation of capital gains began in 1972, so only gains accrued after that year will count.)


Primary Residences


Because primary residences aren't subjected to capital gains, sellers can potentially use this rule to their advantage during the year they sell their home. If the vacation home has accrued more in capital gains than their primary residence, then they can move into their vacation home during the year of sale as a loophole to paying the full cost of capital gains. They do not necessarily need to stay in their residence for the full time, but they will need to prove they lived there at some point. Coopers Crossing homes that are being rented out during the year will have separate rules. This particular option can be complicated in terms of paperwork and requirements, but it could be a good way to legally avoid a major financial hit.


Additional Options


Canadians can deduct capital losses from their capital gains, meaning it may make more sense to sell off the primary residence along with the vacation home if the primary residence has plummeted in value. Owners can also donate their gains to a registered charity during the sale calendar year so they can receive a tax credit. This credit can potentially reduce the amount of total taxes owed for capital gains on the sale of second homes. The Canadian Revenue Agency will also sometimes grant extensions to the taxation if sellers expect a long escrow period after selling off their second home.


Selling a vacation home can still be a profitable decision if sellers understand how to calculate capital gains tax. Because the rental and primary residence rules can be tricky though, it helps to consult with a real estate agent or financial planner to make the process go run more smoothly.


For informational purposes only. Always consult with a certified tax expert before proceeding with any real estate transaction.


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