HST and how it affects Real Estate

The B.C. Harmonized Tax – BC HST Will Raise New Home Price

Please comment on this blog post regarding your opinion and thoughts on how the new BC HST will influence the British Columbia and Greater Vancouver real estate home prices next year. Announced in August 2009, the BC HST will come into effect July 1st, 2010. The BC Harmonized Tax is simply the combination of the two current sales taxes: the 7% provincial BC sales tax and the 5% federal goods and services tax. The BC HST is 12% (twelve per cent) and will be added to the purchase price of new BC homes and Greater Vancouver real estate. In addition to applying 12% on new home prices, the BC HST will also be applicable to real estate closing costs and fees, which will in turn increase the price of any new home in British Columbia and throughout the Greater Vancouver property market. Currently, new homes in BC and Greater Vancouver are only subject to the 5% GST federal tax (and not the 7% provincial sales tax) Some analysts say that as the BC real estate markets start their long recovery from the global economic crisis and housing bubble of 2008-2009, the introduction of the BC HST 12% tax on new homes in Vancouver and the province of BC will halt first time homebuyers from making the largest purchases of the life.

In addition, the 12% HST will also affect Greater Vancouver housing affordability, which is already the highest of any city in Canada. Overall, BC housing affordability is also the highest in Canada, which means that British Columbians and Vancouverites spend the most after tax dollars on their homes and real estate purchases. The introduction of the BC HST on new Vancouver homes for July 1st, 2010 will likely damper the sales volume of new real estate in the city in addition to making property more unaffordable for first time homebuyers while making it that much more expensive for current homeowners looking to upsize into larger new Vancouver homes. The other thing to keep in mind is that many retirees are getting to retirement age, and the addition of the 12% BC HST will likely influence what these empty nesters can afford to purchase if they are looking for a new home in BC or Greater Vancouver real estate markets.
Overall, the combination of the PST and GST into the British Columbia HST new Harmonized Sales Tax will ultimately affect the majority of the BC population looking to purchase new homes and real estate property, including those Vancouver condo home buyers. On average, a consumer looking for new BC property will end up spending 7% more because of the difference between the 12% HST harmonized sales tax versus the current 5% GST goods and services tax that are applied to new property.

British Columbia already has the award for the most expensive real estate in Canada. The Okanagan region, Victoria and Greater Vancouver also all fit within the top ten most priciest property markets in the country.
The integration of the new provincial BC HST of 12% on new real estate will further increase and bump up the price for new homes in the province, thereby decreasing affordability throughout the region.

Some BC Real Estate HST Numbers and How It Affects You

Scenario 1: Based on a purchase price of $600,000 for a new BC or Vancouver home, the homebuyer would pay a total of $72,000 in BC HST taxes (12% on $600,000). With the homebuyer HST rebate for purchases above $600,000, the homebuyer would receive the $20,000, thus reducing their purchase cost to $52,000 in taxes for a total of $652,000. Currently, the 5% GST applicable to the same home would cost only $30,000 (a difference of $22,000). *This does not include the HST applicable to closing fees.

Scenario 2: If a BC homebuyer wanted to purchase a new Vancouver home costing $800,000, the total 12% HST hit would be $96,000. The partial HST rebate of $20,000 (maximum allowed) will reduce this to $76,000, making the final purchase price at $876,000 plus property transfer taxes and other closing costs. Before July 1, 2010, a new home would be subject to only 5% GST which is $40,000 on a $800,000 property. With the new BC harmonized sales tax, a BC homebuyer would pay $36,000 more for the same home after implementation of the HST tax. *This also does not include the HST applicable to closing costs.

For more information please see: Vancouver Real Estate Page

Coffee Shops for sale in Kelowna

Here are two links to local shops that are for sale:

Kelowna Coffee Shop #1

Kelowna Coffee Shop #2

Will Conley Contributing Writer to EHOW shares tips on how to run an effective coffee shop:

Step 1 Open your coffee shop in the right location. Target a local customer base. Get to know the neighborhood and what types of people live there. In most cases, you will be able to choose the atmosphere of your coffee shop, since every locale contains many subsets of demographics. Just make sure there are enough people in the area to patronizer your business.

Step 2 Scope out the competition. If another local coffee shop attracts a funky, young customer base, either opt for a more austere atmosphere and target a different customer base, or plan to out-funk the other place and steal some of their loyal patrons. Learn how much the competition charges for a coffee, a mocha, a triple latte, a slice of pie. You can charge more or less for your coffee products, but the overall experience should reflect the price-point value of your product.

Step 3 Get free wireless Internet for your coffee shop. These days every successful coffee shop needs to offer free WiFi. This gets people in the door and gives them a reason to stay.

Step 4 Make your coffee shop as comfortable as possible. The more inviting the atmosphere is, the longer customers will stay, and the more loyal they will become. Include plenty of seating, but don't cramp the space. Sofas and booths help as well. Plenty of traditional table seating is also necessary.

Step 5 Offer food. This keeps customers in your coffee shop for longer periods of time.

Step 6 Use "Buy Ten, Get One Free" stamp cards to give customers incentive to buy often. Each time a customer buys a drink or food item, stamp the card. When it fills up, they can turn it in for a free drink of any size. This is a classic marketing tactic for successful coffee shops.

Step 7 Play the right music. If you find that customers come to your coffee shop to study, keep the volume down to a dull roar. Keep an eye on your demographics. Play the right music for the right crowd. Experiment with music tastes and listen to feedback. Once you find a style of music your customers like, try and stick with it. Just don't play the same CD over and over. Your best bet is to pump in some customized satellite radio.

Step 8 Keep everything clean, neat, orderly and self-apparent. For example, if you are set up to have customers bus their own dishes, place the busing containers in plain sight. Fix any broken or rocking tables as they develop problems. Keep the sugar and condiment station fully stocked. Make sure nothing is sticky for longer than a few minutes. Situate the order, pick-up and payment counters in plain view.

Step 9 Set employee schedules clearly, and hold employees to their commitments. Overlap schedules so that there is always someone available to fulfill customer orders. There is nothing more annoying to a customer than having to wait 10 minutes for a cup of coffee when no one else is in line.

Step 10 Keep supplies well stocked at all times. Do not stop serving anything just because it is an hour to closing time. If it's on the menu and your doors are still open, you must serve whatever is ordered.

Step 11 Maintain transparent accounting. Run cash-outs at the end of every cashier shift to maintain accountability. Never keep more than a couple hundred dollars of petty cash in the safe.

Step 12 Run promotions from time to time, and advertise whenever fiscally possible.

Kelowna Real Estate Statistics - October 2009

Central Okanagan Real Estate Summary

Year = 2009 Month = October

8 Condo/Apt -- Sales 73
9 Condo/Apt -- New Listings 195
10 Condo/Apt -- Current Inventory 1083
11 Condo/Apt -- Sell/Inv. Ratio 6.74%
12 Condo/Apt -- Days to Sell 81

13 Condo/Townhouse -- Sales 56
14 Condo/Townhouse -- New Listings 78
15 Condo/Townhouse -- Current Inventory 448
16 Condo/Townhouse -- Sell/Inv. Ratio 12.50%
17 Condo/Townhouse -- Days to Sell 79

18 Lots -- Sales 16
19 Lots -- New Listings 68
20 Lots -- Current Inventory 839
21 Lots -- Sell/Inv. Ratio 1.91%
22 Lots -- Days to Sell 177

23 Residential -- Sales 215
24 Residential -- New Listings 330
25 Residential -- Current Inventory 1378
26 Residential -- Sell/Inv. Ratio 15.60%
27 Residential -- Days to Sell 87

28 Average House Price $475,910.43
29 Median House Price $440,000.

Full OMREB report Click Here

Kelowna online business owners

Just a quick blog entry today for the business owners of Kelowna. I came across the Alexa website today. It shows the most viewed webpages on the net. Have a look:

ALEXA

Dustin Serviss
Financial Advisor
Kelowna BC

Planning Considerations For Students - Kelowna

Information provided by: Advocis - CLU Institute - Comment Newsletter Sept/Oct 2009

Every year, parents across the country send their
children off to university and college in search of higher
education. Sometimes the student will be far away
from home, sometimes the student may be close to
home but living separately and sometimes the student
will live at home while attending school locally.
Whenever a student heads off to school, there is a
wide range of things to consider. The following is
a checklist of some of the more common financial
concerns impacting post-secondary students:

☑ Property and Casualty Insurance
Does your home insurance coverage extend to
your child’s school residence or other housing
arrangement? Does your home insurance cover
the student’s possessions as well as damage to
a neighbour’s property caused by negligence
or perhaps an inadvertent mishap? Have you
discussed this with your insurance broker or
insurance company with details specific to your set
of circumstances?

☑ Health & Dental Coverage
Does your group benefit plan at work cover your
child? Do you have to contact your human resource
area to update or inform them that you have an
over-age dependant who is attending school on a
full-time basis? If you have coverage, does your
child want to opt out of the school plan? If you have
coverage and the student also takes coverage under
a school plan, there is the ability to co-ordinate
benefits under the two plans – have you provided
the student with the information needed when
visiting the dentist and/or pharmacist?

☑ Car Insurance
If your child drives a car while at school, has his
or her risk changed? Should you have a discussion
with your broker to ensure that you have complete
and full disclosure of the student’s situation?

☑ Moving Expenses
Will your student’s moving expenses be tax
deductible? If so, take the time to gather the
receipts now so that you will be able to find them
at tax filing time.

☑ Tuition, Education and Textbook Tax Credits
Students may be eligible to claim the tuition,
education and textbook tax credits. These amounts
can be claimed by the student in the year of study and
unclaimed amounts may be carried over to another
year or transferred to a parent or grandparent.
Ensure your child knows about these credits and sets
aside the appropriate documentation for tax time.

☑ Access to Cash
Does your child have sufficient cash reserves to carry
him or her through the full school year? Parents
often feel a tap on the shoulder for additional money
throughout the year. An option that can make it easy
to assist the student financially is a joint bank account
with one or both of the parents. A parent might have
sufficient rating at the bank such that when he or
she makes a deposit into the joint account, the bank
will not impose any holds on the funds. This can
allow the student to access the funds without delay
and without incurring extra charges.

☑ Establishing a Credit History
Does your child have a credit card? If not, it can
be wise for the child to apply for a student credit
card as it will start the process of building a credit
history. With a credit card in hand, responsibility for
making the regular payments becomes important
to maintaining a good credit rating. Do you need to
monitor that the bill gets paid on time, at least until
you are confident that this task is well in hand? It
is important to ensure that your child’s bills are
paid on time because of the potential interest and
late charges as well as the detrimental effect on the
student’s credit record.
The bottom line is that the eligible dividend system
will remain in a state of flux and that regular
adjustments are needed to meet the purpose of the
gross-up and dividend tax credit mechanism.

☑ Financial Responsibility
Will your child be liable for utilities at his or her
place of residence? Similar to a credit card, you
need to determine if monitoring the necessary
payments may be helpful initially to ensure good
financial responsibility.
Some, or all, of the above list may apply to your
student’s situation and it is important to determine
which of the issues you feel needs to be addressed.
Once you have considered the issues and your
priorities, it is relatively easy to help get your
student off on a good financial footing and aid in
their financial education.