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The Act respecting duties on transfers of immovables allows Ville de Montréal, by by-law, to raise its taxation rate for immovables with a value of more than $500,000.
Every municipality must collect duties on the transfer of any immovable situated within its territory. These land transfer duties are better known as the “Welcome Tax” (Put in place by M. Bienvenu). The buyer’s are liable for paying such tax.
The buyer pays the greatest of the following amounts:
The price paid;
The amount of the consideration stipulated in the act of sale, if different from the price paid;
The market value of the property at the time of its transfer, i.e. the value entered on the property assessment roll multiplied by the comparative factor.
After establishing the first step, the following must be calculated:
0.5% of the first $50,000
1% of the next $50,000 to $250,000
1.5% of any portion exceeding $250,000
2% of the portion exceeding $500,000 (for the City of Montréal)
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Example:
A property is sold for $265,000. The value of the property entered on the property assessment roll is $260,000 and the comparative factor is 1.02.
The basis of imposition is therefore established at $265,200, i.e. the highest of the sale price ($265,000) and the market value of the property (Value of the property entered on the property assessment roll multiplied by the comparative factor: $260,000 x 1.02 = $265,200)
The transfer duties payable to the municipality will total $2,478, i.e.:
0.5% of the first $50,000 = $250
1% of the next $50,000 to $250,000 = $2,000
1.5% of the portion exceeding $250,000 = $228
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I added this article because I love real estate and educating people on the matter. If you would you like me to work for you, call me 514-402-8444 or EMAIL ME!
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Most of us assume that when it comes time to buying a building, whether it be a house or a million dollar structure, that there are only two ways to do it: Pay cash or get a mortgage. Well I’m here to tell you that there are many, many other ways to do creative financing.
The two easiest ways are standard text in our real estate purchase forms:
#1. Assuming another’s mortgage
We don’t see much of this or at all these days because the interest rates are at their lowest. When they do go up, why wouldn’t you want to assume the sellers rate at 3.75%. By assuming their mortgage and financing the rest to make up the selling price and you could potentially save a lot of money over the rest of their term.
Quick note: Got this from my client today: “Okay, some very heavy conversations with brokers and banks here this morning. One thing is for sure is apparently variable mortgages are not assumable!”
#2. Balance of sale
This is a great tool if you believe that you can increase the value of the building within a few
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years or know that you will be able to pay it off when the term is due. The way it works is that the seller **“lends” you a certain amount of money at an agreed upon rate for a limited time (usually 1-2 years). You pay them the interest either monthly, quarterly or annually for the time period on the total amount borrowed from them and at the end of the term or sooner, you pay the full amount back. This works if you are low on cash or wanting to keep your cash. After the 1-2 years renovating or re-renting (apartments) and increasing the value of the building, you refinance and pay the vendor back.
**”lends”: The vendor doesn’t really hand over the money, it’s just that you don’t give him the amount until a later date.
Great benefits:
You get the chance to improve the building and increase the rents for refinance.
The vendor receives money through collected interest (if the deal needs sweetening)
Delays the capital gains for the Vendor
Gets the building sold!
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I added this article because I love real estate and educating people on the matter. If you would you like me to work for you, call me 514-402-8444 or EMAIL ME!
To search properties go here www.Montreal-Properties.com
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After signing at the notary, you enter your new home all excited. You walk around inside and you start noticing things missing that you knew were suppose to be part of the sale. Or maybe you notice that the vendors took the bathroom mirror. Isn’t that a fixed item? Or that they’ve ripped out the built-in shelves which have left behind a wall in dire need of repair. Or they’ve left junk in the garage or somewhere else in the house. What about if they’ve left the place filthy mess? Or maybe you’re the buyer and the blinds which were supposed to be left on the living room window are now gone.
For some of us this may seem really odd that people would do such things. Well I’m here to tell you that it happens more then you would like to think. A lot of these issues cannot be solved by a walk-through before hand either. I’m usually the first to hear about it. “So now what? What do we do now?” I’m asked.
Normally the agents get involved and contact each other with the details and try to work things out. Sometimes it works out and some times though what is done is done and the vendors don’t want to hear that
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they’ve left junk under the steps and to come and clean it up. Legally yes they are responsible; however what can you do about it?
This is a legal issue now and this is where I’m supposed to say consult your lawyer. “Consult your lawyer”. I’m also a bit more realistic than that and I know people just want to know of something that they can do. I see two options here. #1, to forget about it and chalk it up as part of a (shitty) experience. #2, Try and fix the problem.
Fixing the problem: Take a lot of pictures and document everything. If something costs money to fix or clean up, keep the bill. Send everything to the other party with a letter explaining (without prejudice) that you would like to be reimbursed. If that doesn’t work, then you might have to take them to small claims, if you so chose.
Sorry that I don’t have better news then that. If any readers have any other great ideas, I would love to hear about them. On a top note, the market right now is still hot hot hot!
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I added this article because I love real estate and educating people on the matter. If you would you like me to work for you, call me 514-402-8444 or EMAIL ME!
To search properties go here www.Montreal-Properties.com
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Does the Vendor need their money months before the signing date? Do you need to be an owner months before you need to move in? Does the vendor need a place to stay after he signed the deed over to you? These are all possible, legal ways to sweeten the deal.
There is a clause in the promise to purchase contract where it’s written that if the occupancy of the premises is to be subsequent to the signing of the act of sale,
then the purchase price shall be adjusted by an amount equal to an amount per month, calculated from the date of signing of the act of sale to the scheduled date of occupancy, as compensation for the SELLER’S occupancy of the premises during that period. The SELLER shall continue, during that period, to assume the heating, electricity and general maintenance costs relating to the premises occupied.
That’s a mouthful taken straight from the promise to purchase Annex A. Basically it would be best to cover your costs. So make sure that you include, municipal taxes, mortgage, insurance and condo fees if there are any. Any extra expense that you want covered. The seller while living there will take care of the utilities and maintenance.
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The only argument that I get from clients is that they will bring up, “What happens if they don’t leave?” Well it’s the same difference whether if the signing and occupancy are the same day. It’s all a matter of trust. I trust that since we have all this legal jargon in place that it will protect me.
Another tid bit of information to know is that the seller is not renting or paying rent; he/she is paying compensation. Big difference, which means that they are not subject to the Regie du Logement rules.
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I added this article because I love real estate and educating people on the matter. If you would you like me to work for you, call me 514-402-8444 or EMAIL ME!
To search properties go here www.Montreal-Properties.com
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