HST Liability
This is not legal or tax advice, but merely a recounting of some (rather scary) experiences of some of our clients. With HST rebates of about $30,000 per unit, the CRA and their collection agents (the new home sellers) have (we are told) hired additional staff to “crack down” on tax fraud where the Ministry of Finance (Land Transfer Tax) reports multiple transactions from the same person(s). Buyers mostly fall into one of 3 categories: Moving In – No problem. Renting- You pay the full HST (rebates are added back to the purchase price) to builder and will likely recover all the rebates 3-6 weeks later upon application to CRA: http://www.cra-arc.gc.ca/E/pbg/gf/gst524/README.html Flipping-Big problem. Like Renting, no principal residence exception to capital gains tax. Worse if CRA deems the flipping as income from a business (where profits are taxed as income not capital gains) if flips are frequent and form a substantial part of taxpayers income. Also NO HST REBATE. Also figure about 10% of the tax owed for penalty and 4% over TBill rate for interest see http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/bspsbch/rtrns/pnlts-eng.html CRA and builders are increasingly asking for drivers licenses, utility bills (in addition to the usual sworn statements) linking buyer(s) name(s) to the new address. Also, please don’t ask us to swear your false or misleading statements so that your tax problem also becomes our ethical problem. If you can’t cover the tax and transactional costs on the flips, get out of the game and the CRA will have to look elsewhere for its money. You definitely need specialized tax/legal advice. We can refer or there’s always those tax lawyer guys advertising on 680 News and...
Read MoreHow Much To Buy Or Sell My House?
HOW MUCH TO BUY OR SELL MY HOUSE? I am often asked how much to buy or sell my house? Most clients pay about $1,000.00 for a sale and about $1,800.00 for a purchase all inclusive. I would want to know much more about your deal before giving a more accurate estimate or quote. Can you do any better? I’m cheap too, but at least I’m smart about it. Firstly, we sell a service, not a commodity like a car or an appliance (even there, I would pay a large premium for after sales service!). I don’t use the cheapest dentist or accountant in town, do you? We are a one office, two lawyer, 2-3 law clerk operation. Our clerks are very experienced in real estate transactions. The lawyer/staff ratio allows us to closely supervise our staff and have a lawyer return your call if needed. We are not a “mill”. Secondly, it amazes me that the same clients that haggle over a hundred dollars or so in fees do not even care about the value received for their money. Most lawyers charge little or nothing extra to review the agreement BEFORE it is signed, potentially saving the client from a huge mistake. The “hagglers” often call just before closing when the lawyer can do the least amount of good. Thirdly, no two deals are the same. A single person selling a “cookie cutter” home in a subdivision comes close, but add in estate considerations (for elderly clients), tax readjustments (for recently built homes), complex documentation review (all condos and new homes), title repair (often owners who have lived at the same house forever), tier B and private mortgagees (each with unique requirements), last minute negotiations for property damage or financing issues, and it is easy to see that some deals require greater effort and attention, the very thing lawyers charge for. Finally, I have seen many lawyer’s bills in my career. I am convinced that our clients get excellent value for their money in a business that is so competitive that rates charged do not reflect the cost and risk involved in acting on a transaction. Why do we continue to offer residential real estate services to individuals (many firms got out of the business)? Our services include many things besides real estate. We want clients, not deals. That is he mindset of who you are haggling with. Who should not use our services? People who can’t communicate in English or Mandarin – our small staff means that we can only offer services in these languages. Hagglers – see above. Fraudsters – We cooperate with police / RCMP investigations where it is apparent that fraud has occurred. Client’s who want us to do half the job – ie. “Don’t check adjacent properties for inconsistent descriptions, Don’t ask too many questions….” Who should (we hope) use us? We value referrals from realtors (they control the business, after all) but we put the clients interest ahead of protecting the agent’s commission (and repeat referrals) in the rare instance the two are at odds. Check our website for any upcoming free breakfast seminars on topics of interest to real estate professionals. Our preferred client is a small business owner who may avail themselves of other services such as Wills, Family Law and Litigation services. It bears repeating that we want clients, not...
Read MoreBuying a former grow op?
Best way is to check the local police site, most of which indicate properties formerly used for illegal purposes. Please contact me as we have had some experience in these matters. Scarborough Grow Op List
Read MoreUn-bundled legal services
Prospective Client: “I want justice!” Lawyer: “How much justice can you afford?” Client: “I make $12 an hour” Lawyer: “So do I, but I charge $250 an hour because of overhead. I also have a $5,000 insurance deductible if I make a mistake” Client: “Legal Aid said I make more than $19,000.00 annually so no luck. I can pay you $500 now and $500 in a month or two. My court date is in 3 weeks” Lawyer: “I can write the Court and ask for a lengthy postponement because an important witness, “Mr. Green” is absent (Lawyer motions in direction of client’s wallet) Client: “I thought the Charter gave me a right to a lawyer if I get into serious trouble” Lawyer: “That’s only at the time of arrest, not for going to court, when you really need one, and not for civil / family / housing cases” Client: “Can you help?” Lawyer: “In the past I would limit my retainer, but now there is this new thing called unbundling” Client: “What’s that?” Lawyer: “Think of it as hiring your surgeon only for only the most challenging parts of your surgery, and leaving the routine parts such as anesthesia and sewing the incision back up for you to do” Client: “What a good idea, you do less so you can charge less?” Lawyer: “Exactly. We do less and have less control so there is a greater chance you will botch up somewhere and make a claim against me. In this way we can increase access to justice for low income people like you” Client: “Where do I sign? Lawyer: “Right here. Check off those parts of your lawsuit / crisis that you want me to handle and those parts you will be doing yourself. (Lawyer reviews form with client) Client: “I’ll chose Pleadings” Lawyer: “Good choice, that’s $200” Client: “I’ll chose for you to show up at the court” Lawyer: “Good choice, but please note that advocacy is extra” Client: “What’s advocacy?” Lawyer: “An extra $300…$400 if I know the Judge” Client: “Nah, I think I’ll skimp on that, I have to cut somewhere” Lawyer: What about investigation, answering correspondence, and reporting” Client: “I don’t need all the bells and whistles, here’s $500” Lawyer: “Thank you. Are you perfectly clear on what unbundled services are your responsibility and what are mine?” Client: “Absolutely, it’s all spelled out on the form. Hiring a lawyer was cheaper than I thought!” Sheldon Tenenbaum...
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