Posted on: 08-02-09 23:03:55
Dear CD
Due to economy crisis, I have to move out of Canada for Job with Family, I purchase condo townhouse three years back, and due to the current situation it is hard to sale home.
I have a private offer from one family which is little less than purchased price.
What would be the right decision; to sell what ever price I am getting today or keep it this house on rent for couple of year until house market will grow and sell home that time?
Thanks for advice and comments!
Parth
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"First they ignore you, then they laugh at you, then they fight you, then you win" - Mahatma Gandhi
Hi Parth
I hope amit kalia, cd member & real estate broker reads this & sheds his wisdom, if not try sending him a pm or contct him otherwise....he is really good at what he does & may be show you both sides of the coin properly.
good luck
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Pooja
If I were you, I would certainly rent it and ensure a steady income each month, reather than selling it off at a lower price than what you have bought it with. Real Estate market will keep up in few coming years and until then, you will have recovered your loss in the form of rental income.
That's my $0.02.
If you are getting $X for the house as sale price, after your mortgage $Y, the balance is (X-Y). If you put this balance out in the market in a high interest account for safety you can get 3.5%.
Now compare this with the rental income (A) and the mortgage payment, plus utilities, plus taxes (B)
If (A-B) is positive and more than the interest you will receive in the HI account do not sell, if A-B is negative sell immediately.
Factor in selling costs, and legal costs in your sale price.
Quote:
Originally posted by parth1970
Due to economy crisis, I have to move out of Canada for Job with Family, I purchase condo townhouse three years back, and due to the current situation it is hard to sale home.
I have a private offer from one family which is little less than purchased price.
What would be the right decision; to sell what ever price I am getting today or keep it this house on rent for couple of year until house market will grow and sell home that time?
Thanks for advice and comments!
Parth
After factoring in your buying, selling, legal and other carrying costs, you might not be able to break even in a short span of 3 years. Even if you did, it won't be much.
If your family member is suggesting a lower price than the market rate, calculate if it makes sense after you reduce the selling fees of 5%, cost to break your mortgage ( you may ask him to assume your mortgage), lawyer's fee, plus some loss in property value over the next few months.
Keeping the house rented as an absentee owner may not suit everybody. You might need to pay someone to manage the property on your behalf, file taxes, resolve tenant issues and look after repairs etc.
On the other hand, there are many non-resident investors who are doing this sucessfully remotely.
Regards,
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Amit Kalia, Broker, REALTOR®
RE/MAX Real Estate Centre., Brokerage
independently owned & operated
100 City Centre Dr, Unit 1-702
Mississauga, ON L5B 2C9
Phone No.: 905-339-5111
Website: https://www.realestate-ontario.com/
Condo Blog: https://condopundit.com/blog/
I think you must sell this for 2 reasons : real estate prices are going for a tumble currently , and no one knows when the correction will come but when it comes it is going to be gradual .
Secondly from a tax perspective , you are not liable to the CRA for tax on your world income IF you are not a resident of Canada and DO NOT have any 'residential ties' which might include bank accounts , house etc . If you choose to retain the house , you will be liable to submit your tax / return on your world income .
Thirdly , by selling the house , you will be at peace ... if you have the money , you can buy any day - with your mortgage payments gone , you will again be at peace .
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Fido.
Quote:
Originally posted by Fido
Secondly from a tax perspective , you are not liable to the CRA for tax on your world income IF you are not a resident of Canada and DO NOT have any 'residential ties' which might include bank accounts , house etc . If you choose to retain the house , you will be liable to submit your tax / return on your world income .
Fido,
I have some doubts regarding the above.
As a non-resident he can own a home in Ontario. His rental income will be taxed under Canadian law.
Withholding tax is payable, however, on earned income (such as rent) or sale proceeds in accordance with the terms of the tax treaty between Canada and the respective non-resident country.
Providing that any withholding tax and certificates are remitted to Revenue Canada there are no other requirements needed to satisfy the tax authorities.
Parth should consult a tax expert for more information regarding the above.
Regards,
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Amit Kalia, Broker, REALTOR®
RE/MAX Real Estate Centre., Brokerage
independently owned & operated
100 City Centre Dr, Unit 1-702
Mississauga, ON L5B 2C9
Phone No.: 905-339-5111
Website: https://www.realestate-ontario.com/
Condo Blog: https://condopundit.com/blog/
