Posts Tagged value
Reasons For An Extended Lease
Posted on July 25, 2011 | Real Estate Law.
Getting an extension on a lease is a benefit to most leaseholders and therefore is something which is seriously worth considering. Under statute you have the legal right to get an extension on your lease for up to 90 years (Leasehold Reform Act 1993). Once this extension is granted, you are no longer liable to pay ground rent to your landlord. This article discusses the benefits of getting an extension on your lease.
One of the main reasons you should think about extending a lease is because as your lease decreases, so does the value of your property. If you have a very long lease (such as one that lasts for more than 100 years) then this will make little difference to the value of your property, but once that number starts to go down, then the money you can expect to make on the flat or house will also decrease. This is why extending a lease is encouraged.
Another reason to consider an extended lease as soon as you can is to avoid having to pay what is called marriage value. This is charged on leasehold extensions where the original lease has less than eighty years to run, so it is definitely in your interests as the leaseholder to start the application process as soon as you can. As long as you have owned the property for two years and your original lease had at least 21 years on it, you will be eligible to apply.
Also, if you think that you are going to want to sell your property in the future, then you should give some thought to an extended lease. This is because it can be harder to sell your property on if the lease has less than 60 years to run as mortgage lenders are more likely to view it sceptically. So, not only will a short lease make it harder for you to find a buyer for the property, but even if you do then your buyer is likely to find it tricky to get a mortgage to complete the deal.
Finally, extending a lease can give you peace of mind as it means you won’t have to worry about what will happen if you are still living in the property when the lease runs out. It makes overall good sense, so if you are interested in an extended lease, get in touch with a specialist solicitor.
Another Government Program to Assist Home Buyers
Posted on June 15, 2011 | Real Estate Law.
Last week’s column discussed the National Home Buyer’s Plan, a popular government program designed to help first-time buyers enter the housing market. This week’s column will discuss a program with a similar purpose — to encourage consumers to invest in the real estate industry. Unlike the National Home Buyer’s Plan, however, this program is limited to the Province of Ontario.
In Ontario, when a home is bought, the purchaser must pay a special tax known as Land Transfer Tax. This tax is payable on closing. The value of Land Transfer Tax is based on the value of the home being purchased. For example, if you purchase a house for $200,000, you will owe $1,725.00 in Land Transfer Tax.
In an effort to stimulate the real estate industry and the purchase of new homes by first-time buyers, the Ontario government introduced a refund of Land Transfer Tax in its 1996 Ontario Budget. The program was subsequently renewed every year, and it is now a permanent program.
Firstly, the program only applies to newly built homes. Those buying a resale home may not participate in the program. Secondly, you must be a first-time homeowner. Thus, you cannot have previously owned a home or an interest in a home anywhere in the world. The same rule applies to your spouse for the period of time that he or she has been your spouse. Thirdly, you must be at least 18 years old to qualify for the program.
The maximum rebate of Land Transfer Tax is $2,000, the equivalent to the Land Transfer Tax payable on a purchase price of $227,500 (net of GST). If an individual owns less than a 100 per cent interest in the newly built home, the amount of the rebate would be reduced and calculated according to the interest in the home. For example, if you own 100 per cent of your new home and you paid $250,000 for the home, the amount of Land Transfer Tax payable is $2,225. You would receive the maximum refund of $2000. If, however, you own a 50 per cent interest in your home, the amount of the refund would be 50 per cent of $2000, or $1,000.
Individuals who have received a refund of Land Transfer Tax based on the Ontario Home Ownership Savings Plan (OHOSP) do not qualify for the program.
The Land Transfer Tax refund program allows eligible participants to receive their refund by filing an Affidavit (a sworn statement that your lawyer will prepare on your behalf) for refund at the Land Registry Office at the time of registration. If you do not apply for the refund at the time of registration, you may apply by contacting the Ministry of Finance.