Edmonton Real Estate Blog

These simple do-it-yourself projects that can make a big difference, without taking too much out of your wallet.

Think spending $50,000 on a total kitchen remodel or $10,000 overhauling the bathroom is the only way to add value to a home? If large, expensive projects are beyond your grasp, you’re in luck: Increasing the value of your home doesn’t have to involve large outlays of cash, especially when you’re willing to put in a little sweat equity. Why spend big money when there are so many low-cost, do-it-yourself (DIY) projects? Whether you’re planning on selling or just want a nicer place to live, read on to find out what you can do to add value to your home for as little as a few dollars. (To read more about home improvements, see Fix It And Flip It: The Value of Remodeling.)

House-Wide Updates

The following are some changes that can be undertaken for surprisingly little money.

Freshen Up the Walls
If your walls have scratches and dirty paint, an outdated color or tacky wallpaper, a few cans of paint can make a dramatic difference. If you’re trying to maximize the value of your home, it’s best to choose a neutral color scheme that unifies the entire house, makes the space look bigger and will appeal to a wide variety of potential buyers.

Install Crown Molding
This task is surprisingly simple but adds a lot of character. You simply buy the molding, which is nothing more than decorative strips of wood from a home improvement store, cut it to the size that fits your room (or have the store cut it for you), and attach it to the top of the wall with a nail gun. It may even come already painted. This involves a bit of woodworking skill as well as the right tools, but is very inexpensive if you can do it yourself.

Update Fixtures
Switch plates, outlet covers, curtain rods, light fixtures and doorknobs are often boring or overlooked, but a few bucks can add major pizzazz. Attractive metal switch plates and outlet covers can cost as little as $5 apiece but look much more expensive. Light fixtures and decorative curtain rods can be a little pricier, but sometimes you can make an inexpensive piece look elegant with the right can of spray paint. Again, make sure to choose items in colors and finishes that will appeal to a wide audience.

Install Ceiling Fans
Everyone likes to save money on electricity bills, making ceiling fans an appealing addition to any home. Using ceiling fans can definitely cut down on air conditioning costs, and in fact, they can also reduce heating costs by circulating warm air away from the ceiling. A basic fan costs about $50, and a nice one can be had for no more than a couple hundred dollars. If you don’t already have overhead lighting in the room or rooms you want to install fans in, the electrical work needed to install them can significantly escalate the cost of this project as well as take it out of the DIY realm.

Improve Window Treatments
The cheap vertical plastic blinds, paper shades, or horizontal aluminum blinds that may have come with your house definitely don’t add any value to your home. Consider replacing them with plantation shutters, wooden blinds or nice drapes. By the way, it doesn’t matter whether the drapes will come with the house if you are in the market as a seller. The important thing is that they make it look nice while it’s on the market and help you get top dollar for your home.

Reveal and Restore Hardwood Floors
Older homes in particular are likely to have hardwood floors lurking beneath carpet. If your floor squeaks, that’s a decent sign that you may have wood floors. If you’re not sure, pull up your carpet in an unnoticeable corner and investigate. If you do have wood floors, there’s a good chance you’ll have to refinish them to restore them to their original splendor, but that will be much less expensive than installing new flooring from scratch.

Bathroom

Redo the Bathroom Floor
Many people can learn how to do this task themselves with a simple class (your local home improvement store may offer one). Because installation makes up a major part of the cost of most home improvements, saving all that money on labor may allow you to pick nicer flooring than you could otherwise afford. Opting for a neutral-colored tile will add the most value.

Update Fixtures
If you have generic, cheap and/or outdated fixtures, replacing them with newer, more customized versions can make your bathroom sparkle. For about $40-$100, you can replace a shabby bathroom vanity or ceiling light fixture with something elegant. A similar cash outlay will get you a new sink faucet. A spa-style chrome shower head adds a touch of luxury for about $80. Towel bars are the easiest and cheapest fix at about $20-30. Sometimes the upgrade can even be more energy efficient, increasing not only the aesthetics of your home but “greening” it up as well. (For more on saving energy, read Ten Ways To Save Energy And Money.)

Kitchen

Paint or Stain Kitchen Cabinets
You could buy all new cabinets and save money by purchasing prefabricated (rather than custom) cabinets and installing them yourself, but that’s more work and money than painting or staining your existing cabinets. White cabinets will brighten the room, don’t usually go out of style and are easy for future owners to repaint if they want something different. You’ll need to remove all the hardware from your cabinets, including removing the doors. You’ll also need to clean the cabinets first so that residue like grease won’t ruin your work. This renovation can be used to spruce up your bathroom cabinets as well.

Upgrade Cabinet Knobs and Drawer Handles
It’s surprising how a seemly innocuous element like a cabinet door knob can make your kitchen look cheap or dated. Updating this hardware can give your kitchen a face lift whether you redo your cabinets or not.

Living Room

Clean Fireplace Brick
If you have a brick fireplace and it’s ever been used, chances are some of the brick is stained with soot and creosote. Because a nice fireplace can be a major selling point in a home, you’ll want to make yours look as nice as possible. Just use a damp rag to wipe away some of the soot, then follow up with a fireplace cleaner designed to remove creosote. It will take some scrubbing with a stiff brush and possibly several applications, but you’ll have that brick looking spiffy when you’re finished.

Don’t Forget the Exterior

It may be easy for you to ignore your home’s exterior when you spend most of your time inside, but it’s the first and sometimes only impression that others get of your house. Here are a few simple ways to make it look its best.

Install a New Front Door
A very basic steel front door costs about $100, but for just another $100-$200, you can get a door with a lot more character that will improve your home’s curb appeal. If you can’t afford a new door, a fresh coat of paint in an inviting color may be all you need.

Replace the Front Door Mat
When you’ve had the same doormat for years, it can be easy to overlook how worn out or dirty it’s become, but it’s one of the first impressions people get of your home. This is one area where $20 can make a big difference.

Gutters
This is more an issue of maintaining your home’s value than increasing it, but it’s extremely important. Without properly functioning gutters, which are designed to carry water away from your home, rain may seep into your home or pool around it, causing problems like mold and mildew and eventually compromising the house’s structural integrity, leading to very expensive repair bills.

Power wash the Exterior of Your Home
For less time and money, a good washing can make your home’s exterior look almost as good as a fresh coat of paint.

Repaint the Exterior
If washing the exterior of your home didn’t brighten it up as much as you’d hoped, consider a new paint job. With the ladders and heights involved, this may not be a DIY task for everyone, but even if you have to hire others to do this job, it’s still pretty inexpensive as far as home improvements go and can make your house look almost new from the outside.

Power wash the Driveway, Walkways and Patio
As long as you’re renting the power washer, you might as well clean your driveway, your patio, and any walkways. You may be surprised by how new they’ll look afterward.

Upgrade Landscaping or Clean Up Existing Landscaping
Flowers and other plants are a great way to brighten your home’s exterior. Use greenery in front of your house and/or along walkways to draw attention to your house. To get the most for your buck, choose perennial plants, or ones that will come back year after year, rather than annuals, which will die in a year or less and not return. Patch any bald spots in the yard with fresh sod and trim existing trees and bushes to complete the yard’s new look.

Put on Your Tool belt
Upgrading your home doesn’t have to be expensive or difficult and it doesn’t have to involve contractors. There are a variety of projects for all price ranges and all levels of skill and enthusiasm that can improve your home’s value, whether to future buyers or, perhaps more importantly, to you. Putting a few of these home-improvement ideas into action will help you get the most value out of one of your biggest assets whether you’re staying in it or selling.

Amy Fontinelle  Investopedia.com

Time to Put Your Home on an Energy Diet: Eight New Year’s Resolutions for Your Home

Bill Cunningham, an energy efficiency expert with Lennox – a leading provider of customized home heating and cooling systems – says homeowners can significantly curb their energy usage and reduce their energy bills in the coming year by making the following quick and easy home-related New Year’s resolutions:

1. Make a Light Switch. Replace your five most frequently used incandescent light bulbs with compact fluorescent bulbs, and save $65 each year. These bulbs use less energy and can last up to 10 times longer.

2. Get With the Program. Install an ENERGY STAR qualified programmable thermostat, and take the time to program it (the majority of consumers don’t). When used properly, these thermostats can save as much as $150 per year in energy costs.

3. Go with the (Low) Flow. Replace your existing shower head with a new 2.5-gallon-per-minute (low-flow) shower head. The new water efficient shower head coupled with a 10-minute shower will save five gallons of water over a typical bath and up to $145 each year on electricity used to heat the water.

4. Let the Laundry Chill. To save hot water – and the $24 to $40 in fuel that it takes to heat that water each year – wash your clothes in cold water. Be sure to choose a laundry detergent that is formulated for use in cold temperatures.

5. Make a Dent in the Lint. Clean the lint trap in your clothes dryer before every load of laundry, which will help increase the drying efficiency of the machine and save another $34 each year.

6. Dial it Back. Lower the temperature on your hot water heater from 145 degrees to 120 degrees – the only place you’ll notice the difference is on your utility bill. In fact, this slight reduction in temperature can save the average homeowner between $36 and $61 each year.

7. To Repair or Replace: That is the Question. Consider replacing an older furnace that is 60 percent efficient with one that is 95 percent efficient, and save approximately 57 percent on energy bills and up to a whopping $5,513 over a five-year period.

8. Stop the Standby Energy Use. Unplug digital devices when not in use, as “standby” energy consumption can add up. In fact, you can save about $165 per year just by unplugging a plasma TV.

This article is provided by Lennox. For more tips and advice on maintaining or purchasing a home comfort system, visit Lennox.com or ItPaysToLiveSmart.com.

“The combined team of Serge and Kate had sold my house pretty much overnight.  The team’s astonishing interpersonal and communication skills, honesty, integrity and over all knowledge had ensured we picked the right people for the job.  I was very impressed with the Team Leading Edge material and process, and certainly would use them again. Thanks guys we really do appreciate your abilities and recognize you for a job well done!”

Perry & Anita Strickland

Record-low borrowing costs combined with the growing realization that the economic storm is passing have fuelled the remarkable recovery of the real estate market in Canada. However, it is important to understand some of the issues that have surfaced with these exceptionally low interest rates.

If you are obtaining a mortgage, you are fortunate to be obtaining some truly historically low interest rates. The decision between taking a variable rate mortgage versus a fixed rate mortgage should be evaluated with your mortgage consultant and/or your realtor to assess the pros and cons of each option. Although rates are exceptionally low, lenders are definitely exercising more caution with their lending policies.

If you are thinking of refinancing your current mortgage, you need to consider the cost of breaking your existing mortgage compared to how much you will save in interest payments.

If you break an existing mortgage you will have to pay the greater of three month’s interest or the interest rate differential (IRD). An IRD is a penalty for early prepayment of all or part of a mortgage outside of its normal prepayment terms. Usually this is calculated as the difference between the existing rate and the rate for the term remaining, multiplied by the principal outstanding and the balance of the term.

If for example a borrower is currently paying 6.0% interest on their home mortgage and the current rate is 3.5% the difference (6.0% – 3.5%) is 2.5%. This 2.5% will be charged for the months remaining on your mortgage. If you are carrying a $400,000 mortgage at 6.0% your monthly payment is approximately $2,559. If the current rates are 3.5% the payments would be $1,997, the difference being $562.00/month. If you have 48 months remaining on your mortgage, the penalty would be $26,976 ($562 x 48).

These numbers are astonishing and the lenders unfortunately are not easing up on these charges. It may only make sense to refinance your mortgage if the interest rate savings over the remaining life of your mortgage exceed the value of the IRD.

If you are selling your home make sure to know what your mortgage discharge penalty will be for breaking your mortgage prematurely (assuming you are not porting your mortgage).

Of course, if you port (transfer) your mortgage to another property, you will only be penalized on the portion of the mortgage you discharged. For example, if you had a $400,000 mortgage and were carrying a $300,000 mortgage over to your new home, the penalty would only be assessed on the $100,000 mortgage you discharged.

Although the market is changing and will continue to do so, this represents opportunities for buyers and sellers alike. It is extremely important to be informed as a consumer so that you can make good, sound educated choices during these most interesting of times. And please make sure you know in advance what all your closing/transactional costs will be before you enter into any agreement of purchase or sale.

 Canada Realty News

Having kids? Here are 10 money tips to guide you.

It can be expensive to have a kid, especially saving for their education. Here are some tips to help.

After entering the work force and getting married, the next stage to start in life for many people is parenthood. Get the wallets out for this one. Parents have to dole out cash to insure yourselves against mortality risk, to start a college fund for the children, and to buy a family home.

These imperatives call for smart investment decisions – choosing where to allocate your funds to maximize returns for a given level of risk.

Here are 10 tips to help out with the decisions. They might not turn a parent into a Warren Buffett but could nonetheless leave their kids saying: “Thanks, Mom and Dad!”

1. To insure or self-insure?

“One of the first things I did when I found out my wife Edna was pregnant with my eldest daughter was to rush out and get some life insurance,” notes York University professor Moshe Milevsky. As he discusses in his book, Wealth Logic: Wisdom for Improving your Personal Finances , his own father had died early without life insurance while several of his children were still dependent on his income.

Mr. Milevsky and his siblings were nevertheless spared destitution because their father had accumulated a sizable estate through frugal living and investing in a diversified portfolio of financial assets. “In the insurance lingo, my father had decided to self-insure,” Mr. Milevsky reports.

Self insuring can be riskier than buying life insurance right off the bat. If the father had died earlier, his estate might not have been sufficient. However, someone who had aggressively saved prior to marriage (see Part 2 of the Investing for Life series: Getting married? Ten money tips ) would have minimized this early-stage risk (with a will in place). An aggressive saving and diversified investing plan early in a marriage might be another option for couples with frugal tendencies and an aversion to insurance premiums.

2. Best place for an education fund

One of the best places for a child’s education fund is inside a registered education savings plan (RESP). The government throws in grants of up to $7,200 through the Canada Education Savings Grant (CESG) plus additional grants for low-income families. Funds compound tax free and are taxed at the child’s lower marginal rate when they are withdrawn for post-secondary education.

It helps to become familiar with how the plans work. For example, some have higher administration fees than others. And not all providers transfer the low-income grants into the plan – so if your family is of modest means, “first ask the provider if they offer the extra grants before you sign up,” warns Mike of the Four Pillars blog.

In short, it is a good idea to know the nooks and crannies of RESPs. Sources include the RESP section on the Four Pillars blog, online discussion forums, CanLearn, and Human Resources and Skills Development Canada. And get an early start on opening an RESP to give time for the compounding of returns to work.

3. What will the kids think?

Some parents believe in a conservative approach when investing for their children’s sojourn in the halls of higher learning. Lower returns are acceptable to them as a trade-off for minimizing the risk of losses – something their kids might not look kindly upon.

“I look at it like I am the trustee of the funds and have a responsibility to be prudent with the investment choices,” explains Jim Yih, a fee-only financial adviser with financial firm Retirement Think Box in Edmonton. He has put half of the RESP funds for his four young kids into a balanced mutual fund and the other half into fixed-income instruments.

In the end, whether a parent goes with a high or low allocation to volatile investments such as equities is a matter for risk tolerances. Those who go with higher allocations will likely wind up ahead of the game given the superior long-run returns of stocks – see Jeremy Siegel’s Stocks for the Long Run – but the price of admission is a greater risk of ending up with sub-par returns.

4. Become a couch potato

A popular choice within the Canadian personal-finance blogosphere for investing RESP funds appears to be the Couch Potato Portfolio. It spreads money over a diversified basket of low-cost index funds. According to MoneySense magazine, the “classic” version has generated average annual returns greater than 10 per cent over the past three decades.

One of the more popular instruments for implementing the Couch Potato portfolio in an RESP is the TD e-Series Funds, a family of index mutual funds only available online – but at the lowest of annual fees for mutual funds. The Pre-Authorized Purchase Plan (PAPP) allows investors to automatically invest small amounts at regular intervals, without commissions.

The Couch Potato Portfolio from the author of the Million Dollar Journey blog is diversified across Canadian equity (30 per cent), U.S. equity (30 per cent), international equity (30 per cent), and Canadian bonds (10 per cent). It’s rebalanced annually. At the 10-year mark, the asset mix will begin a transition to a more conservative stance, which by the 18th year it will consist of guaranteed investment certificates (75 per cent) and money-market funds (25 per cent).

5. Automate asset shifts

Shifts in the asset mix of an educational fund from the aggressive to conservative, as described in the above tip, seek to maximize returns while controlling for the volatility of equities as your children’s university or college enrolment dates approach. Target-date funds automate this shift in asset mix. An example is the RBC Target 2025 Education Fund.

They offer the convenience of one-stop shopping to investors who don’t have the time or inclination to do their own research. In return, there are some trade-offs. One is higher fees. Another is that the fund’s asset mix may not be suitable for a family.

6. Fine tune the asset allocation

Mr. Milevsky urges investors to think of their total wealth as including their human capital (discounted value of salary, wages, and other income earned over one’s working life). “While conceptually this asset is different from your tangible, financial assets, it should be considered and diversified in tandem with your financial capital,” writes Mr. Milevsky in his book, Are You a Stock or a Bond?

Thus, the rule of thumb is to have an allocation to stocks equal to “100 minus your age” can be fine tuned. Couples with secure jobs, like tenured professors, could allot more to equities than what the rule suggests for their age group. Couples with variable commission income, such as stockbrokers, should go with lower equity allocations.

Another consideration is that the age-related rule of thumb is usually applied more to investing for retirement, where the investing horizon is 25 to 40 years. For children’s educational funds, the horizon usually runs from 10 to 15 years, which is less time for the superior returns on stocks to take shape. Lower equity allocations may perhaps be more prudent within this time frame.

7. Put those child benefits to work

Many parents funnel the Canada Child Tax Benefit (CCTB) and Universal Child Care Benefit (UCCB) into RESPs to get the government grants. However, if a family has a good income and savings rate, they could consider maxing out the RESP with their own funds and investing the CCTB/UCCB outside of the RESP.

That’s because income earned from investing the CCTB/UCCB in a separate account for a child is not attributed to the parents but to the child. The returns will compound virtually free of tax.

Charlene Walker of Nepean, Ont. directed monthly family allowance cheques after her daughter’s birth into a separate bank account and then into shares of Bell Canada through its Dividend Reinvestment Plan (DRIPs allow investors to automatically reinvest dividends and buy new shares at no cost). A few years later, Ms. Walker diversified into DRIPs at six companies. By 2008, her daughter’s nest egg was worth nearly $85,000.

8. Other ways to launch the kids

There are a number of ways to invest in children’s futures beside RESPs, as certified financial planner Alexandra Macqueen discusses in the February, 2009, edition of the Canadian MoneySaver magazine. The benefits of these alternatives include no limit on contributions and flexibility in the use of funds (which can be used to supplement RESPs or finance other ambitions such as starting a business).

One of the more popular seems to be informal in-trust accounts, which are easier to set up than formal trusts. Interest income is attributed to the contributing parent but capital gains are taxed in the child’s hands. Consequently, growth investments would appear to be more appropriate for this channel.

Paying down mortgage and other debt is desirable in itself but it can also be a strategy for helping one’s children get through college. That’s because extinguishing debt frees up cash flow that can be directed as required during the post-secondary years. Other methods include juvenile life insurance (savings component grows tax free and can be withdrawn), tax-free savings accounts (TFSAs) and the indoctrination of your offspring on the importance of saving allowances and working at part-time or summer jobs.

9. Let’s give them a really good start

Some families have more options for assisting their children. “Our kids have RESPs but we haven’t been diligent about maxing them out. We have also purchased income property for our kids’ futures,” says Dana from Ajax, Ont.

She expects the multi-residential properties will be paid off by the time each child is finishing high school. “They can use the income from the property to cover their expenses, or sell the property and use the proceeds to fund their endeavours, or live in one unit and use the cash flow from the others.”

“Not everybody pursues traditional post-secondary education and we want our kids to have an option should they decide to go into business for themselves, work or learn abroad, or pursue graduate programs that their RESPs and other savings wouldn’t have covered.”

10. Buy the house right

Ask people what their best or worse financial moves were and some aspect of buying a house is a frequent response.

“My best move would be never spending too much on a home,” says Tim Stobbs, author of the Canadian Dream: Free at 45 blog.

“We saved in our RRSPs for years and then bought a modest house [which was later sold]. On the next house, we made sure to keep the mortgage to around $150,000. We will likely be mortgage-free by the end of current term, which would mean we only had a mortgage for less than 10 years.”

Margot Bai, author of a personal-finance book, Spend Smarter, Save Bigger , says both her best and worse financial moves were directly related to buying a house.

“When I bought my first home, I locked in my mortgage for five years, a mistake that ultimately cost me about $10,000. By paying a penalty to break my mortgage contract, I was able to recover the penalty and gain another $5,000 over the next two years. Now I stick with open variable mortgages.”

This article is the fourth in a series on personal finance and investing at different stages of your life. As some issues may overlap the different stages of life, they could be covered in a prior or subsequent article.

By Larry MacDonald

A new report will be greeted as a good news/bad news proposition for Canadians, depending on which side of the home ownership fence they currently reside. Good news for home owners, who can expect housing values to end 2009 at an average of $318,000, up five per cent from 2008; and bad news for those still waiting to break into the market, as prices are expected to rise another 2 per cent by the end of 2010 – the highest level in Canadian history. Where are home prices headed across the country? Click to find out.

Canada
Average price in 2007: $307,265
Average price in 2008: $303,594
Average price in 2009: $318,000
Change in ’09: +5%
Average price in 2010: $325,000
Change in ’10: +2%
Source: CREA, Local real estate boards, RE/MAX

Edmonton

Average price in 2007: $338,636
Average price in 2008: $332,852
Average price in 2009: $321,000
Change in ’09: -4%
Average price in 2010: $330,000
Change in ’10: +3%
Source: CREA, Local real estate boards, RE/MAX

Well it appears that the seasonal slow down in starting to hit us here in the Edmonton marketplace.  The number of single family dwellings in Edmonton proper listed dropped significantly from last week from 1,762 to 1,649.  That is a 6.4% drop in one week and that is very significant.

The number of sales also drop significantly in the last week from 545 to 494 in the past 30 days.  That is a 9.4% drop in sales volume.  Again the trend that is of concern to me is that the number of sales are dropping faster and by a greater amount then the number of listings.

What does that mean?  Well it means that our listing/sales ratio his risen from 3.27:1 to 3.33:1, which means that I am concerned that valuations could drop if the trend continues.

Edmonton’s healthy residential housing market was the first to emerge from the depths of the recession, with sales surpassing year-to-date figures for 2008 in June 2009. Low interest rates, greater affordability, and pent-up demand were behind the push for real estate early in the year, as consumer confidence levels slowly escalated. First-time buyers snapped up entry-level product at significant cost savings. By October, momentum had reached the top-end of the market, with sales over $750,000 moving ahead of 2008 levels. Given the solid percentage increases reported since June, the number of homes sold by year-end is expected to climb to 20,500 units, up 18 per cent over 2008, and on par with 2007 figures. Average price, after peaking in 2007 at $338,636, has since stabilized at $321,000-down just four per cent from 2008 levels. The balanced residential marketplace took both realtors and consumers by surprise in 2009, many of whom hoped for the best but prepared for the worst. However, economic performance, with a 2.8 per cent decline in GDP growth forecast for 2009, has been less than stellar. The energy sector continues to battle back in Alberta-oil prices are on the upswing and forecast to rise further next year. While challenges still lie ahead, some positive industry developments, namely the Kearl oil sands project, are hoped to return to the oil sector to a growth cycle or at least off set recent contraction.

The good news is that real GDP is expected to climb three per cent in Alberta in 2010, bolstered by housing, new construction, a recovering oil and gas sector, and consumer spending. Oil prices are expected to hover around the $80 mark-which should serve to kick-start activity in the mega sand projects. Improving global demand for commodities is forecast to place upward pressure on prices, while rising confidence and more normal crop conditions should also have a positive impact on economic performance in 2010. Retail sales at 5.6 per cent will be one of the top performers in the country, falling just behind British Columbia and Saskatchewan. Unemployment levels hover at approximately 7.1 per cent.

Building on the real estate recovery already underway, the number of homes sold in Edmonton is expected to edge slightly higher in 2010, rising to 21,000, up two per cent over 2009. Housing values, finally on the upswing, should reach an estimated $330,000 by yearend 2010-a three per cent increase over one year earlier. Inventory levels-at about 5,500-are forecast to remain stable, representing a three to four month supply. Market conditions should be balanced throughout much of the year, leaning slightly in favour of the seller. First-time buyers are expected to once again play a significant role, stimulating activity in virtually every segment of the market. It’s anticipated that demand for condominiums will be constant, given their affordable entry-point. An influx of new conversion units in months ahead should be absorbed relatively quickly but fewer multi-unit housing starts in 2010 overall may apply some pressure to the resale market.

With barely a month to go before the end of the year, it is time to get your house in order. Herewith, your top 10 end-of-year tax tips:

1. Tax-loss selling

This is the practice of selling investments that are in a loss position at year-end in order to offset capital gains elsewhere in your portfolio. To guarantee that a trade of public securities is settled in 2009, the trade date must be Dec. 24, 2009, or earlier. This will make sure that the settlement takes place in 2009 and that any losses realized are available to the taxpayer this year. Any trade made after Dec. 24, 2009 will not settle until 2010, so those losses would not be available until next year.

2. Fix your house

The deadline is fast approaching to qualify for the home renovation tax credit (HRTC). The HRTC is a 15% tax credit for eligible renovation expenditures made to your home or vacation property. The credit applies to any amounts spent over $1,000, up to a maximum of $10,000, producing a maximum credit of $1,350.

Although the deadline for the credit is Jan. 31, 2010, the Canada Revenue Agency (CRA) has stated that as long as any materials you purchase to be used in a renovation are acquired by this deadline, they will qualify for the credit, even if they are installed after January 2010. The same, however, does not hold true for labour expenses, as only work completed before February 2010 will qualify for the credit, even if the amount is prepaid.

3. Turning 71 in 2009?

If so, you must convert your RRSP into either a Registered Retirement Income Fund (RRIF) or a registered annuity by Dec. 31. In addition, you only have until Dec. 31 to make your last RRSP contribution — if you plan to do so. You don’t have the advantage of delaying until March 1, 2010. If, however, you have a spouse or partner who is under 72, you can continue contributing to a spousal RRSP in his or her name, provided you still have contribution room.

4. Contribute to your children’s future

If you have a child or grandchild who has never participated as a beneficiary in a Registered Education Savings Plan and who turned 15 sometime in 2009, Dec. 31 is the last chance to contribute at least $2,000 to his or her RESP to be allowed to collect the 20% Canada Education Savings Grant for 2009 and create eligibility for the grant in 2010 and 2011. If you miss the deadline, the child or grandchild will not be eligible for any grants in the future.

5. Give big

Dec. 31 is also the last day to make a donation and get a tax receipt for 2009. Keep in mind that gifting publicly-traded securities with accrued capital gains to a registered charity or a private foundation not only entitles you to a tax receipt for the fair market value of the security being donated, but eliminates any capital gains tax as well.

6. Contribute to a registered disability savings plan (RDSP)

The RDSP is a tax-deferred registered savings plan open to Canadian residents eligible for the Disability Tax Credit, as well as their parents and other eligible contributors. Up to $200,000 can be invested within the plan with no annual contribution limits. While contributions are not tax deductible, all earnings and growth accrue on a tax-deferred basis. Contribute before the Dec. 31 deadline to qualify for the 2009 matching Canada Disability Savings Grant and potentially, the Canada Disability Savings Bond.

7. Splurge on office furniture

If you are self-employed or a small-business owner, consider accelerating the purchase of new business equipment or office furniture that you may have been planning to do in 2010. You are permitted to deduct under the “half-year rule,” one-half of a full year’s tax depreciation in 2009, even if you bought it on Dec. 31. For 2010, you can then proceed to claim a full year’s depreciation. For computer equipment purchased after Jan. 27, 2009 and before February 2011, you can write off 100% of the cost in the year of acquisition — with no half-year rule.

8. Consider a low, low loan

The government’s prescribed interest rate is set at the all-time low of 1% until at least Dec. 31, 2009, providing couples with a significant income-splitting opportunity. Under this strategy, the higher-income spouse loans funds to the lower-income spouse at 1%, with interest paid annually by Jan. 30 of the following year.

If the loan is made before Dec. 31 while the prescribed rate is 1%, any investment returns above the 1% rate can be taxed in the hands of the lower-income spouse. Note that even though the prescribed rate varies quarterly, you need only use the rate in effect at the time the loan was originally extended.

9. Pay investment expenses

To deduct any investment-related expenses on your 2009 tax return, the amounts must be actually paid by year-end. Such expenses include interest you paid on money borrowed for investing, investment counselling fees for non-RRSP accounts, professional accounting services for tracking rental or business income and safety deposit box rental fees.

10. Get a head start for 2010

If you routinely get a large tax refund each spring due to RRSP contributions or child-care deductions, the CRA can authorize your employer to reduce the amount of income tax withheld on your employment income. Send a completed CRA Form T1213 “Request to Reduce Tax Deductions at Source,” with all supporting documents to the Client Services Division of your local tax services office.

 Financial Post

Edmonton, December 2, 2009: Total sales through the Edmonton and area Multiple Listing Service® system to the end of November have surpassed total year end sales in 2008. The total value of all types of property sold to the end of November is $6.64 billion. The same figure at the end of December 2008 was $6.42 billion. There have been 20,355 property sales so far as compared to 19,448 at year-end 2008.

“Both sales and the value of sales have exceeded our expectations this year,” said Charlie Ponde, president of the REALTORS® Association of Edmonton. “We anticipated sales levels would be the same as last year but REALTORS® have already sold more property than last year with a month to go. This is a good indicator of the strength of our local market.”

In November, the average price of a single family dwelling went up 1.2% to $368,018, reversing a 2% drop in the previous month. Single family dwelling prices are 1.5% higher than the same month last year.

Although condominium prices are down 2.5% from last month they are just $50 higher than condo prices a year ago. The average price for a condo in November 2009 was $231,684. At $284,849, the duplex and rowhouse prices were down 4.7% from last month and down 9.5% from a year ago. Overall, the all-residential average price is down marginally from October and the previous November. It sits at $318,482.

There were 1,894 homes listed on the MLS® System in November with 1,261 sales for a sales-to-listing ratio of 67%. The total value of residential sales in November was $402 million and total available inventory was 5,226 homes which is a typical four month supply. Homes sold on average in 48 days which is up one from last month but much brighter than the 63 days it took to sell a home in November 2008.

“The market remains rock steady,” said Ponde. “Prices vary from month to month within a small range and with a slow gradual upward trend. Buyers have confidence in this market and REALTORS® are prepared to match their needs with the perfect housing option.”

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Highlights of MLS® System activity

¹. Residential includes SFD, condos and duplex/row houses.
². Single Family Dwelling
³. The middle figure in a list of all sales prices

* Average prices indicate market trends only. They do not reflect actual prices, which may vary.