Edmonton Real Estate Blog

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

Three projects that will give you the biggest return on your investment…

The Kitchen

The kitchen is the best place to put your money, hands down. According to the Appraisal Institute of Canada, the average amount home-owners should spend on a kitchen reno is about 10 to 15 per cent of the overall value of their home. If you’re renovating the kitchen for personal use and not only for the purpose of investment, and if you are going to live in your house for more than five years, then you should spend 15 to 25 per cent or more. In most cases, you will recover the cost by the time you sell your home – with a 44 per cent higher return on investment than the average.

What do buyers look for?

• space, functionality and effective, well thought-out storage
• granite countertops create elegance, plus its resistance to scratches and easy maintenance make it ideal for everyday use
• quality – don’t skimp on appliances or labour – having the job done well is a value adder; doing it poorly may reduce the value of your home!

The Bathroom

After the kitchen, bathrooms are the next key space potential buyers look at. A study from Canada’s leading real estate companies shows that a well-designed bathroom renovation can generate up to a 56 per cent better return on investment than the average. Usually a bathroom renovation involves the complete replacement of existing finish and fixtures – tubs/showers, toilets, faucets, sinks, tiles, flooring, lightings, cabinetry and tile-work. Sometimes a bathroom renovation also involves the re-location of fixtures and the removal of adjacent walls to create a better layout.

What do buyers look for?

• a spa-like environment: light colours, rich textures
• luxuries such as water jets in the tub or a steam shower stall
• a large master ensuite with a soaker tub and double sinks

Floor and Wall Finishes

Don’t undervalue the paint and flooring in your home! Many buyers want a home that’s move-in ready, so the more appealing the walls and floors are, the more interest your home will generate on the market. Flooring can generate a 22 per cent better return on investment than the average. If you have carpet in the family, dining and living rooms, it is recommended to change to hardwood and/or tiles. Not only will it make your home more elegant, but you will also enjoy the benefits of a healthier indoor environment, with less allergens. Simply repainting your walls a warm, neutral colour will give you a 29% better return than other popular renovations.

What do buyers look for?

• walls should be smooth and painted in a neutral colour which will help enlarge the space
• currently, hardwood or tiled flooring if not throughout, then at least in the main areas, is the more popular choice for potential buyers
• flooring should create a good flow between one room to the next and be able to tie in with other elements such as cabinetry, wall colours and baseboards

By Kenneth Ho, www.chatelaine.com

Sandra Magsamen shares five artful and inexpensive home improvement projects that will stimulate, captivate and motivate you!

Just because you don’t have a lot of extra cash doesn’t mean you can’t invest in your home. Artist and author Sandra Magsamen offers some artful, low-charge and no-charge ways to create a home that stimulates, captivates and motivates.

Color Outside of the Lines
Color is a wonderful gift, and paint is low cost. Repaint a room or all the rooms in your home. Dream about what feeling you want a room or rooms to share, and think through possible color choices. Journey down to the local paint store for an adventure, and gather tons of paint chips for your consideration and reflection (they are free).

Rummage and explore magazines, pulling out pages of rooms that you want to live in. Look for inspiration everywhere, including friends’ homes, museums, movie sets and nature.

When you are ready to paint, make it fun. Host a paint party and invite some friends over. Make a plan for the evening and give everyone a job. Before you know it, you’ll have splashed some new life into those old walls.

Remember when thinking about color that white brings in light and is the perfect canvas for hanging colorful art. Red is bold, primary and dramatic. Blue is reflective and peaceful. Green is all about nature and calm, and yellow activates and brightens any room.

Putter the Clutter
In my home, clutter seems to multiply magically. Piles of books form here and there, baskets of unrelated items seem to pile up throughout my house and stacks of papers simply grow bigger in size without any human intervention.

For some of us, clutter can be daunting and can make our homes feel messy and unorganized. For others, clutter feels comfortable and fine. If you are one of those folks who love clutter, skip right past this section, but if clutter annoys you, my advice is to “putter the clutter.”

It is really hard to declutter a house in one day because it is such a daunting task, so putter around in each room. Break down the job and pick a room to declutter, then move on to the next room another day. Remember, all this clutter didn’t gather in one day and it doesn’t have to go away in one day either.

If you break this job into small puttering steps, you’ll have a better chance of getting it all done and not be overwhelmed by doing it. Make this job as fun as you can by putting on some great favorite music and dancing your way through the job. Ask yourself as you start this job, “What do I really need and want?” Today is the day to recycle old magazines and donate clothes, furniture and items that could help someone else. Pare down to what feels comfortable and nurturing for you.

Rearrange for Change
If you have grown tired of the same old furniture in your living room and don’t have the finances right now to go out and buy all new pieces, I suggest you do a little rearranging and you’ll be delighted by the change. This tip costs nothing — the only thing you will need is the willingness to play!

Play around with what you already own and see how you could reuse or rearrange in your home. You could go wild with this idea, like moving the living room into the dining room and the dining room into the old living room, or simply rearrange the bedroom by moving the bed under the window so you can feel the spring and summer breezes.

By simply playing around and moving around what you already own, you can change the whole look and feel of your home.

Get Creative
There are so many fun projects to explore and create as you invest in your home. Instead of running to the store to buy an accessory or home decorating item, think about how you might recycle, reuse or create a work of art instead.

• Make new pillows for the sofa by recycling and reusing fabrics.Sew a quilt from clothing that you no longer want to wear but that would be beautiful as a patchwork quilt.
• Paint a whole wall in chalkboard paint and enjoy writing, doodling, drawing, leaving messages, sharing famous quotes, creating or simply jotting down the grocery list.
• Need some lighting? Instead of purchasing a new lamp, why not decorate a lamp shade to match the room? Hot gluing colorful ribbons, buttons or fabric to a shade can look beautiful and artful. Using ceramic tile adhesive on a lamp base and gluing in shards of pottery or stones can create a beautiful mosaic feel to any lamp.
• Need a new rug in the foyer? Try painting a large piece of canvas and make a durable canvas rug. Using acrylic paint, paint the canvas with a design, paint splatter, words or any art that you love. Once dry, varnish with water base polyurethane four or five times, and you’ll have a canvas rug that will be a work of art.
• Make a wreath out of vines you find on a walk in the woods. Gather vines and roll them up in a circle, then tie them together with string. You can decorate the wreath with anything or nothing. 

Grow Beauty
Create a garden in a window, a window box, a terra-cotta pot or the whole front yard. Growing flowers and vegetables is fun, satisfying and always makes a home more beautiful.

Enjoy planting and nurturing your garden, no matter its size. There is great joy and accomplishment that comes from helping anything grow. Make a lettuce garden and enjoy wonderful salads, plant herbs to use all year round, grow flowers you can cut and make a beautiful bouquet from and share your garden with others. You’ll grow great friendships.

You don’t have to spend big money to create the home of your dreams — you only need to spend some time and energy putting your imagination to work.

By Sandra Magsamen, Oprah.com

Source: TD Insurance

A guide to deterring robbers.

Statistics Canada reports that of 230,000 break-ins across the country in 2007, about 60% (almost 140,000) were residential. While the installation of alarm systems and motion detectors have contributed to a steady reduction in home break-ins in recent years, alone they may not deter a determined thief. They should be combined with other measures that help keep burglars from finding your home an attractive target.

 Make your home less vulnerable by following these tips.

 Outside the home

You want your home to appear impenetrable. If it looks difficult to break into, chances are a burglar will move on to another target.

• Keep shrubs and bushes well trimmed and away from your doorways. This helps eliminate possible hiding places for intruders.
• Make sure that yard work tools are not left out. They can be used by an intruder to break into your home.
• Consider installing lights or motion detectors around the exterior of your house.
• Never hide extra keys outdoors, especially in obvious places such as door ledges, mailboxes or under the mat.
• Home alarm systems or dogs that bark at strangers are great deterrents for burglars, as are signs like “beware of the dog” and home alarm stickers placed on your doors and windows.
• Do not put a sign with your family name on the outside of your house. A thief could look up your number in the phone book and call to see if anybody’s home.
• If you go out, never leave a note on your door indicating when you will be back.

 Doors and windows

These are the main entry points of your home. Make sure they are secure and difficult to get through.

• Always lock your doors and windows. A surprising number of robberies occur through unlocked doors or windows. An open window seen from the street can seem like an invitation to enter your home. And don’t forget to lock your garage door.
• Exterior doors should be of a strong, solid material and equipped with high-quality locks.
• Secondary locks on doors and windows act as an added deterrent.
• Always change the locks when you move to a new home or if you lose your keys.
• Install security bars on your basement windows.
• Sliding doors should be secured with a stick or metal bar. The stationary door pane should also be secured; otherwise it can be easily lifted off the track. Use an auxiliary lock or door pins hooked into the frame.

 Protecting valuable items

If a burglar can spot valuable items from the street, it’s like an invitation to come in.

• Never leave valuables in places where they can be seen through a door or window. Consider placing items like expensive jewellery or stock certificates in a safety deposit box. Or invest in a fireproof safe for your home.
• Engrave your drivers’ license number on your valuables. And keep an inventory stored in a safe place.

 When you’re away from home

Your goal when you are away on vacation should be to make it look like someone is still living in your home.

• Use timers on your lights, stereos and televisions. The lights and noise will give the impression that someone is home. Setting lights to go on and off at irregular intervals makes it look like someone is moving through the rooms of the house, as they would be if you were home.
• Cancel your newspaper and ask a neighbour or friend to pick up your mail.
• Hire someone to cut your grass or shovel the snow. Ask a neighbour to leave a bag of their garbage out at your house on pick-up day.
• Leave a car in the driveway. If you take your car on vacation, ask a neighbour to park in your driveway.
• Turn down the ringer on your telephone. Do not change your phone message to say you are away.
• Turn off your computer and disconnect it from the Internet. Make it difficult to access any personal information you may have on your hard drive.
• Make sure you let your neighbours know if you’re planning to be away, even if it’s just for the weekend. That way, they can keep an eye out for any unusual activity around your home.
• Before leaving, do a complete check of your home to verify that everything is secure.

 Always be aware and prepared

Know what to watch and listen for, and be smart when talking to strangers.

• Make sure trusted neighbours and friends have a way to reach you, in case they notice something strange happening around your home.
• Report suspicious activities in your neighbourhood such as unknown persons hanging around, slow moving vehicles circling the block, unusual noises or unfamiliar parked cars.
• Do not allow strangers into your home. If someone knocks on your door and says they are hurt or need help, keep your door locked and call the police for them.
• When replying to calls from strangers, such as people who say they are telemarketers or conducting a survey, never mention when you are planning to be away. Likewise, do not discuss travel plans in public places where you don’t know who may be listening.

Vermiculite is a volcanic mineral that is fire-resistant and has strong insulation properties. It was incorporated into home insulation products branded Zonolite Attic Insulation in Canada and installed in hundreds of thousands of homes across the country.

Vermiculate from the Libby Mine in Montana were used in insulation products sold under the brand name Zonolite Attic Insulation in Canada. Health Canada notes that vermiculate from the Montana mine may contain amphibole asbestos, which when inhaled may cause serious health problems, including cancer.

If you have Vermiculite insulation: stay away from it – if it’s left untouched in the attic, there should be minimal or no risk at all, according to Health Canada. The asbestos fibres must be airborne to be inhaled. Each time you breathe asbestos fibres into your lungs, you increase the chance of developing health problems.

The fibres can become trapped in the lungs and can cause lung cancer and mesothelioma, a cancer of the lungs’ lining or the abdominal cavity.

It’s impossible to tell just by looking at Vermiculite where it was produced or whether it contains asbestos or not. Often, empty Zonolite kraft paper bags were left in the attic. If the bags show that ore was processed by W.R. Grace Canada, Grant Industries or F. Hyde and Co., the product is probably from Libby. If you know you have vermiculite insulation in your attic or walls and you’re concerned about it, it probably makes sense to test the material to see whether it contains asbestos. It is suggested that you hire a trained consultant or contractor to collect the sample and get it analyzed at a laboratory. There are numerous consulting companies that perform this kind of asbestos analysis work.

Removing asbestos-containing materials is typically very expensive. If a significant amount of material is involved, it will probably cost thousands of dollars. Due to the physical characteristics of vermiculite, the risk of the material getting into the air is low. If the insulation is not exposed to the home environment – for example, it’s sealed behind wallboards and floorboards or is isolated in an attic that is vented outside – the best advice would be to leave it alone.

If you are renovating and you suspect you have vermiculate insulation, you should hire an asbestos removal professional before proceeding. Health Canada also suggests sealing cracks and holes in the window frames, door frames and walls. If you suspect Zonolite was installed in your attic, seal up any cracks in the ceilings of the rooms below.

Source: Dave Watson, Canadian Residential Inspection Services (780) 909-8945

The cold weather and storms of the winter season can wreak havoc on the exterior of a home and the surrounding property. Sometimes it isn’t that there is significant damage, but simply the fact that it may have been several months since you last paid attention to or attempted any outdoor maintenance.

Now is the time to do a winter-end check to make sure everything is in order and your home is ready to withstand those spring-time showers and the pending heat of summer.

While all exterior areas should be checked periodically, one area that typically requires special attention at the end of the winter season is the roof. To identify possible roofing concerns, look for:

• Ceiling stains – A possible warning sign that your roof system needs repair or replacement. If localized, it may be an isolated point of damage or a flashing leak. Ceiling stains can also be associated with excessive attic moisture and/or ice dam conditions, which may require additional attic ventilation and/or insulation to prevent a recurrence. If there are stains on lower level ceilings, a plumbing leak could be the cause.
• Loose or missing shingles – Any loose or missing shingles should be repaired or replaced immediately to avoid additional leakage and damage to the roof deck or interior of your home.
• Loose, lifted or cracked flashing – This is the sheet metal or other type membrane found at the base of chimneys and roof penetrations. Damaged flashing should be repaired or replaced to prevent leakage. Any open gaps should be sealed with roof cement.
• Lifted or curled shingles – This may be an indication the roof is worn and at or near the end of its service life, or, at the very least, makes it conducive to wind damage. If found just in an isolated area, spot replacement may be possible, but if widespread, get a professional opinion on the roof’s condition.
• Heavy granule buildup in gutters or at base of downspouts – The granules on roof shingles gradually wear away to the point where the underlying material is exposed over large areas. Once this happens the rate of shingle deterioration accelerates. If granule loss is excessive, it may indicate aging shingles that need replacement.

Any roof maintenance check should also include gutter cleaning. This is an areas often not paid attention to until an overflow creates problems. Gutters need to be checked year-round to help avoid expensive water damage to the siding or house structure. Extensions or splash blocks at downspouts help divert water away from the house, avoiding soil erosion and infiltration through basement or crawlspace walls.

If you have questions on your roof system, consider utilizing the services of a professional home inspector or qualified roofing contractor to determine conditions.

Remember, these tips are only general guidelines. Since each situation is different, contact a professional if you have questions about a specific issue.