Let’s say you’re walking your dog past a hole in the ground, look up and see a LUXURY CONDO COMING HERE sign. It’s 2010 and you’re a little horny. You park the pooch, walk into the sales centre, write a cheque for five grand and buy a one-bedroom unit.

I mean, why not? Won’t be built for three long years, and in that time it’ll surely appreciate in value. If you don’t feel like living there for long, you can always sell the sucker to a greater fool. And because it’s your principal residence, any gains will be tax-free. Woohoo.

Now it’s 2013, the place is built and you list it. Good news. What you paid $260,000 for is now worth $380,000, and you’ve only had to pony up a fraction of the cost. You decide to sell, find a victim, close the deal, and think about the easiest $120,000 you’ve ever made – which you immediately recycle as a downpayment on a junker in Leslieville.

Then you get the call.

Adding to the misery settling over the most bloated condo market in the country is a new initiative by the Canada Revenue Agency to sacrifice flippers on the altar of F. Ottawa is now targeting those they think have not actually proven their residency, owned for too short a time, or intentionally entered into a real estate transaction with the ultimate intent of selling. For them, trouble.

Let’s remember how real estate is taxed. You’re allowed one principal residence that is used as your main home (on your driver’s license) and any money you make on it, you get to keep, no tax. Any losses are your problem – not deductible from income. Real estate that generates income (rental condo, duplex) or is a secondary residence (cottage, love nest) is subject to capital gains tax. Here you get to keep half the gain, and the other half is added to your annual income and taxed accordingly.

Flippers have their own special treatment. The revenue boys consider this to be a business (even if it’s not your occupation), and 100% of the gains are lumped in with your annual income and taxed at the marginal rate. That means, in our example above, that $120,000 is added to other earnings, likely bumping the flipper into the top tax bracket, and then taxed at a rate approaching 50%. Yikes.

Does it matter if you live there for a month, or three, or six, even if that’s your principal residence? Probably not. This is the government, after all. It can be as arbitrary as it wishes. It can come back on you years after you have sold a property, and reassess the transaction, classifying it as a business venture. You can certainly hire a lawyer and go to tax court, but good luck with that.

The condo market is especially tasty for the CRA these days since flipping units has been endemic among developers, brokers, offshore investors and the naive welder from Peterborough who went to a Brad Lamb seminar. Without sustained, long-term (give it a year) residency, the allegation is that the intention was always to dump the unit back into the market, and pocket the appreciation without reporting it as taxable income. Which, in many cases, it was. Duh.

Now, what about the market?

As I’ve told you, there are more than 30,000 condos currently for sale in the GTA alone. Over 6,000 are resales and more than twenty thousand are new and vacant. There are selling at a rate of about 1,200 a month, which represents a two-year supply. In turn, that means prices have only one direction in which to travel. So far in April, according to the Toronto Real Estate Board, condo sales in the GTA are 6% less than a year ago. And there are 60,000 more under construction. Almost makes ya want to join the CRA, doesn’t it?

By the way, TREB is fibbing again.

“Greater Toronto REALTORS® reported 4,260 sales through the TorontoMLS system during the first 14 days of April, representing a slight dip of less than one per cent compared to the same period in 2012,” the board said in its release this week. But a year ago it said this: “Greater Toronto REALTORS® reported 4,557 transactions through the TorontoMLS system during the first two weeks of April 2012.”

That’s a sales decline not of “less than one per cent,” but of 6.5%.

Man, do the realtors think we’re all idiots?

Don’t answer that.


#1 Godth on 04.16.13 at 8:35 pm

How to cheat basic arithmetic

#2 Mrs. Riverview in Winnipeg on 04.16.13 at 8:38 pm

Is CRA going to permit flippers to claim their losses as an offset against regular income? Somehow I think not….

CRA will suck and blow… If you make money, it’s business income, you pay tax…if you lose money, it’s…well…too bad.

#3 finches on 04.16.13 at 8:39 pm

Here in willowdale nothing is happening. Prices up, condos still sell. I guess is about low inventory. I guess people move here because is an island in the mess around. Scarborough and brampton, or newmarket is for the cheapos. Move there and die commuting.

#4 Dr. Hoof - Hearted on 04.16.13 at 8:40 pm


#5 Chickenlittle on 04.16.13 at 8:41 pm

“Man, do the realtors think we’re all idiots?”

Yes, they do. Any land pimp who pumps a $500k apartment with $600 maintenance fees to pay for the “amenities” that the building comes with is worse than, I don’t know, Avril Lavigne.

They always seem to have a good reason why a particular house is worth spending your whole life paying off.

“That means, in our example above, that $120,000 is added to other earnings, likely bumping the flipper into the top tax bracket, and then taxed at a rate approaching 50%. Yikes.”

RE agents never tell you that, now, do they? Wow! Does this happen on EVERY house you sell, even if you have been there for thirty years?

#6 Chester on 04.16.13 at 8:42 pm


#7 finches on 04.16.13 at 8:42 pm

And…. those who live in Vaughan and think they live in mannhatan…foggetaboutit!!! Lol price will drop like flies for bunnies like that

#8 Nemesis on 04.16.13 at 8:43 pm

You know, OldPol… as much as I appreciate the thematic SubText of your LeaderIllustrations of late…

How I long for the DaysOfLurid.

Something like the ‘BirthdayParty’ for one would be nice.

Thank you.

#9 Brad J Lam on 04.16.13 at 8:46 pm

First ten?

#10 Not 1st on 04.16.13 at 8:48 pm

Garth your conf call was overloaded and not letting people in. Is there a recording of it?

#11 JSS on 04.16.13 at 8:52 pm

So Garth –
Thoughts on the TSX today?

Given the continuing weakness in oil and gold, a good job. — Garth

#12 Toronto Condos on 04.16.13 at 8:53 pm

With the Leafs playing well and in play-off contention, do you think Condo values will get a short term bump here?

#13 T-bone on 04.16.13 at 8:53 pm

When the truth actually emerges from our realtons it will not be pretty.

#14 Humpty Dumpty on 04.16.13 at 8:53 pm

IRS to monitor Facebook, Twitter for tax cheats

Is the IRS about to get too close for comfort? New reports brought to light by one privacy and data security expert suggest that this tax filing season the Internal Revenue Service may be monitoring social media for any clues of tax cheats

#15 Spiltbongwater on 04.16.13 at 8:55 pm

Garth,does the notary withhold and pay any taxes owed on the transaction?

No, why? — Garth

#16 tkid on 04.16.13 at 8:56 pm

My ex-landlord’s real estate agent contacted me the other day. Hydro sent her a bill for eighteen months (incurred during the months of my tenancy) worth of unpaid hydro bills with her name on it, demanding payment.

Real estate agent demands I show at the agent’s office and hand over the cash for these bills. Instead I hand over proof I paid my hydro bills (incurred during the same tenancy and having my name on them). The real estate agent was very pleased. Apparently my paying my bills gets her off whatever hook the ex-landlord had her snagged on.

I am guessing the landlord never informed the hydro company she had a tenant as of date X. It’s a muck up to end all landlording muck ups.

Never again will I rent from an amateur landlord.

#17 HD on 04.16.13 at 9:01 pm


Germany has for years been aggressively pursuing people who hide money abroad. But while some of Germany’s 16 states have resorted to buying confidential bank data, the country’s federal government has been trying to sign an agreement with Switzerland to solve the issue of tax evasion once and for all. Opposition parties have so far blocked the deal, arguing that it amounts to an amnesty for German clients of Swiss banks.

#18 Andrewski on 04.16.13 at 9:04 pm

Plane landed just before 5. As soon as I got off the airplane @ YYZ I tried to dial in & listen in on your conference call, to no avail? What did I miss?

#19 Frustrated Kiwi on 04.16.13 at 9:07 pm

It’s official – HAM has moved down under. ;-)
Actually, it’s a good analysis of our own special bubble here.

#20 buying condos? on 04.16.13 at 9:08 pm

Who are the 1,200 people buying condos every month? There has to be an interesting story there…

#21 finches on 04.16.13 at 9:09 pm

Markham, unionville, what a mess, asians are in for big loses..more so with the new arena and big taxation ahead..time to get out Mr. Wang

#22 Victor V on 04.16.13 at 9:10 pm

For many people, buying a condo is the most expensive purchase they will ever make. And many condo buyers trust that the provincial government will be there to make sure they don’t get ripped off by a bad developer, stuck with an incompetent building manager, or ruled over by a tyrannical condo board.

But the fact is, it’s still a Wild West out there in condoland.

New condo buyers enter a developer’s showroom, unaware of the scant protections against false claims, deceitful contract language, or defects hidden behind a freshly painted wall.

They are not told how property managers are routinely hired by the developers, and have an incentive to keep quiet about building deficiencies or else lose out on future jobs.

They are not told how a condo board can be stacked with cronies, who then have the power to make your life miserable if you cause trouble.

Instead of the worry-free lifestyle that is promised, the dream of affordable home ownership can quickly turn into a nightmare.

#23 Geeks on 04.16.13 at 9:15 pm


I think they’re right on this one.
For them two weeks meant 15 days in 2012. Since they do magic they were able to make 4,557 – 4,260 = 297 transactions on the 15th day this year. It was just a typo when they said the first 14 days – they meant the first 15 days.

#24 Tom Vu on 04.16.13 at 9:17 pm

Much confusion:

My blind friend …. err visually challenged..not see why that hot chick with sign would not have faithful other 50%

#25 visorman30 on 04.16.13 at 9:25 pm

I think if you are a flipper you might be able to deduct any losses. As Garth said, even if your main job isn’t to flip houses CRA will count gains as regular income. I believe the wording is something weird like “an adventure in the nature of business or trade”. Pretty much, as long as the intent is to make money then any income if fully taxable and so would any losses. I might have messed up in a couple of places, but I think that’s the gist of it.

#26 Victor V on 04.16.13 at 9:26 pm

For those that wish to read more about the CRA audit issue:

#27 Notta Sheeple on 04.16.13 at 9:30 pm

“…Man, do the realtors think we’re all idiots?…..”

Ever wonder why the majority of Canadians regard REALTURDS® (homo maximus bull$hittus) as a lower life form than even the film on the inside of a used milk bag?

#28 What about CMHC? on 04.16.13 at 9:34 pm

Finance Minister Jim Flaherty wants the CRA to collect more than 0.5B extra from suspected tax cheats this year.

But, what about keeping a close tab on CMHC?

#29 Squatter on 04.16.13 at 9:35 pm

Garth, I think the picture of a shark would be more appropriate.

#30 T.O. Bubble Boy on 04.16.13 at 9:41 pm

Can someone summarize Garth’s 5pm EST conference call for those of us who couldn’t join?

#31 Dean Mason on 04.16.13 at 9:44 pm

I’m not sure but I heard from a friend that if you rent a portion of your primary residence even though you still live there than it ceases to be capital gains tax free from the date you started renting that space in the house,condo etc. If this is true CRA has a great number of people to catch because a great number of people don’t even claim their rental income.

I guess this is why the CRA gives RRSP contribution room from net rental income so people would include it in their annual income tax return and possibly make RRSP contributions to deduct from their net rental income reducing or avoiding paying income taxes.

People have to be very careful with real estate as it can get you in tax trouble because people think that if they don’t receive a T5,T3 or any other tax slip they don’t need to report it to the CRA and pay incomes taxes on that income or profit.

#32 Idiot on 04.16.13 at 9:45 pm

Realtors don’t think you’re idiots…they’re order takers mostly. If you’re looking for people to blame this hot mess we’re heading into, look at the Lamb’s of the world, but not wearing his realtor hat, the builder one!

#33 TurnerNation on 04.16.13 at 9:50 pm

Great conference call with Garth and Blog Dog Scott.

#34 Tom Vu on 04.16.13 at 9:55 pm


Much enjoyed being moderator while you busy on “conned ference” call.

Amazons washed moi’s cars…Justin Turdeau dropped by(won’t be back)….found out Smoking Mans secret identity(Ugghhhh…need eye surgery)….and saw how many Brad Lamb death threats you dodged hourly.

PS: Any time !!!!

#35 TurnerNation on 04.16.13 at 9:56 pm

The Calgary Trade (where I am visiting, currently).

Short sell which ever name is on the Saddledome.

Early 00s: Canadian Airlines (bought by Air Canada). Went BK .

Next, Pengrowth: fell from $25 to 4 bucks.

Currently: Scotiabank.

Da Dummm. Cure scary music. “You are bitchier than you think.”

#36 W on 04.16.13 at 9:58 pm

It’s the intention criteria that is absurd. The CRA has too much leeway. If you don’t have an inventory and flip frequently then it shouldn’t be considered business income.

#37 Fleabitten Monkey on 04.16.13 at 10:07 pm

Where is CRA getting their target “list” from in this new initiative? What source docs they work off?

#38 Blinded on 04.16.13 at 10:07 pm

Yup, it ranges from GTA Realtors fibbing to central banks admitting to fixing LIBOR rates for 300 trillion but a gold price slam is a true reflection of sound capital forces at work.

#39 Blinded on 04.16.13 at 10:13 pm

The recent gold price slam is used by some as an indicator that all is well in the monetary system, but those same voices think the monetary system was fine when gold moved from $250 to $1900.

#40 Jordy on 04.16.13 at 10:13 pm

Conference call was interesting today, thanks Garth. I like the etf balanced portfolio approach, but I am having trouble resisting the under valued Canadian oil and gas sector right now, a lot of the stocks are getting beat up pretty bad and look attractive.
Keep up the edu-tainment :-)

#41 Gladiator on 04.16.13 at 10:24 pm

As I wrote many moons ago, this all looks like a well planned action: corral the sheep, then slaughter them. Average Joe was given the false impression that he can make an easy buck via the condo boom, then was nicely bent over and “had”.
How else would you explain the 0-40 mortgage loans, and then after enough fish bit the hook – the cardinal change of rules: the cancellation of 40-year mortgages, no more CMHC coverage for 1M+ mortgages, and now – the going after the speckers?
Gosh, I hate this tin foil but it looks like i have no choice for now. It just comes together so seamlessly that it looks well-planned.

#42 Tiggertoo on 04.16.13 at 10:25 pm

Not a gold nut – but isn’t this a good time to buy a little to round out an investment portfolio?

#43 benchwarmers on 04.16.13 at 10:27 pm

Garth, was the conference call recorded? If so any chance of a rebroadcast?

#44 Blacksheep on 04.16.13 at 10:29 pm

Julie 218,

This blog requires a tactical approach. The game is, trying to sneak systemic truths into your comments, bolstered by facts and links. Some Cattle are not ready for ‘the hard to accept’ realities and will resist, especially if they benefit, status quo.

Realize, the gatekeepers play the game too and will never concede to your views, even if sound. Don’t waste energy trying to enlighten, them.

#45 Smoking Man on 04.16.13 at 10:30 pm

I think dogs are smarter than people..

When Buffy was down to her last few breths, the little one. Our tazmanian toy paddle went up to her big sister, wee lick good by, Buffy was gone.

Taz was depressed up until today.. I brought buffs ashes back in an Ern, said to my wife buffs is back, I put the Ern on the coffee table.

Taz jumped up and smelt the Ern, wee lick.. Taz is back to her self, barking at any animal on TV.. Wow… She even barked at a cartoon dog..

Taz us not her real name she told me if I put on the blog she wants a fake name too.

Yet humans are still buying condos in Toronto…

#46 dave b on 04.16.13 at 10:35 pm

The Realtors will continue to lie, and why not:

#47 David W on 04.16.13 at 10:42 pm

Condos are insane. A new build condo in central Ottawa will set a person back $450K or more for a 2bd 2 bath. And for what, a 900 sq ft shoebox in the sky that doesnt even include parking in that price (another $30K)? So not worth it. Developers and sales agents should be ashamed of themselves for feeding on the sheep.

#48 Snowboid on 04.16.13 at 10:43 pm

For a bit of humour from our favorite Schwarzenegger sound-alike and his son with their mid-April Kelowna RE update, enjoy…

Especially like the part where BC prices will remain stable, or “maybe just a smidge down”

You have to love the enthusiasm, even if the story is so wrong – but if you have any questions they promise to offer unbiased and honest opinions!

BTW, the condo flippers in Kelowna are showing signs of severe distress.

One condo original presale: $ 599K in 2009, actual sales price $ 499K – just listed at $ 399,900

#49 X on 04.16.13 at 10:46 pm

I have claimed all income property sales as such, and have paid taxes accordingly.

The gov’t should very well crack down on improper usage of claiming principal residence on a residence that is blatantly not.

#50 Toronto April mid-month numbers explained (beheaded market) on 04.16.13 at 10:48 pm

These are the numbers behind the map that I posted here yesterday. As you can see the Toronto house market was beheaded above 1mil$. Active listings above 1mil are around 30% of the total number of listings but the sales for houses above 1mil$ are just 18% of the total numbers of sales

sorry if this is a duplicate I am having some problems with my computer.

#51 Humpty Dumpty on 04.16.13 at 10:50 pm

Napoleon Bonaparte re-incarnated…

Hard hit by a tax evasion scandal that forced the resignation of his budget minister, French President François Hollande vowed Wednesday to make banks expose their overseas activities, saying tax havens “must be eradicated in Europe and the world”.

#52 From Mississauga With Love on 04.16.13 at 10:58 pm

Questions to all: in Ontario, specifically in Mississauga, if a buyer submits an offer in writing (and in there puts a clause that we request the seller to initial and sign the offer even if rejected), then is the seller obligated to reject it in writing?

No. It’s an offer, not an obligation. The seller can totally ignore you. — Garth

Garth, apparently you’re wrong on this one. My agent called RECO and they told him that the Seller or his agent must sign back the offer indicating rejection. They cannot simply ignore it. This is to ensure that the Seller was presented with all offers and that the agent did not hide one from them.

and on the topic of calling the Seller, how exactly does one get their phone number when at best you have their name.. ummm, no, they’re not on the white pages.

(a) There is no legal obligation, (b) so go visit. — Garth

#53 Charles Ponzi on 04.16.13 at 11:07 pm

I have no problem with sacrificing flippers as long as no marine animal is hurt in the process.

#54 Charles Ponzi on 04.16.13 at 11:18 pm

@Frustrated Kiwi comment #19:

To add injury to insult to all Australians, HAM is not the only group now preferring New Zealand which has now become a magnet for asylum seekers–it must be all that cheap real estate for sale in Aukland.

#55 The Man From Nantucket on 04.16.13 at 11:18 pm

Husband is steppin out?

After you worked so hard to stay in shape for him?

#56 The Man From Nantucket on 04.16.13 at 11:24 pm

#14 Humpty Dumpty on 04.16.13 at 8:53 pm
……….this tax filing season the Internal Revenue Service may be monitoring social media for any clues of tax cheats

Anyone who gets pinched due to this evidence deserves everything that follows!

Gloating about a crime on a semi-public forum where you don’t even own the copyright for your words is a special kind of stupid!

#57 Shawn on 04.16.13 at 11:26 pm

Visorman30 at 25 said…

Pretty much, as long as the intent is to make money then any income if fully taxable and so would any losses.


So, I guess this implies stock gains only attract taxes at the 50% rate because Canada Revenue figures no sane person would expect to make money in stocks?

#58 Jonah on 04.16.13 at 11:37 pm

We had gone to Monarch in Ajax last month who quoted us 780,000 for 3400 square foot on a “premium lot”. The lot itself is worth 80,000 and that is a starting price as it can go as high as 180,000. When asked why the prices are so high, I was informed that investors from city buy the properties at the asking rate and then sell them within a year.

There are three of us in family that are trying to buy a house and live together under a single roof. Between us we make around 230K before taxes and despite that we are finding hard to afford a house over 550K. Land Transfer Tax, Mortgage insurance, property taxes, Lawyer fees, Home inspection, and then mortgage itself with cumulative interest on already inflated prices along with long commute time, 407 ETR scam, job insecurities puts us in a situation where we feel that we are getting ripped off by Government, Real Estate companies, banks, home builders, and property investors. I can never understand how can two people who earn less that 200K afford a house that is over 500,000. It just doesn’t make sense!!!

#59 blok existentialist on 04.16.13 at 11:43 pm

I could have a piece of street-level information useful to investors. It may be something you already know, but then again, maybe not. As a financial illiterate, I have no means of judging.
Working as a produce manager these days … it’s a small store so I’m also responsible for floral/garden sales as well as helium balloon sales.
We give a lot of regular balloons away free to the kids on a daily basis and just charge for the foil balloons.
My boss is like any other boss these days and is necessarily obsessive about watching the bottom line. He got a $400 bill for our helium tank refill today … his hair was pretty much standing on end. This was just for one tank. I know helium has essentially doubled in price in the past 10 years or so, but this was nuts.
My boss never pays a suspect bill without checking it out first. He tracked down the helium supply company who supplies the local who supplies our tank rental and helium refills.
The guy informs my boss that helium (which is tied to oil production?) has skyrocketed in value because hospitals are using more and more of it. (I don’t know if this specific reason is true, but this is what the guy contends.) If fact, then it’s somewhat similar to the corn situation two years ago. All the corn was being bought up at a higher price as fuel.
It was impossible for food suppliers to buy enough for people to actually eat (even the genetically-altered stuff). And when you did manage to get it in for your store, it was both expensive and lousy quality. That went on for two corn seasons until the supply caught up with the demand.
At any rate, roughly the same thing going on for helium as for corn — but it’s not going to go away: the supplier informed my boss that hospitals/medical centres get first dibs on the helium which they are consuming at an increasing rate. Helium for decorative balloons is a minor sale/consideration by comparison. And the price is going to keep going up.
So I will no longer be blowing up free balloons for the kids. Further, we have shut down our balloon sales, period. While we’re the only store in this community that provides helium balloons, we’d now have to charge $19 and up for a filled foil balloon (currently charge $4.99 which would be considered ridiculously high in the city) to break even. No one’s going to pay that for a balloon. So as soon as this tank is done, we’re out of the balloon business … because helium prices are expected to keep shooting up.
Sad. I’ll miss seeing the kids’ faces light up whenever I give them a free balloon.

#60 mid on 04.16.13 at 11:44 pm

#30 T.O. Bubble Boy

Here’s a brief recap of what I remember, not verbatim
• tsx down Monday by 300 pts.
• tsx commodities and resource heavy
• tsx up today 115 pts.
• stick to 60/40 equities/fixed
• Cdn economy slowing down, gdp 1.5%
• Dow y-to-date up 13%
• tsx negative compared to us market
• need multiple asset classes for protection
• and I told you so about gold

#61 T.C. on 04.16.13 at 11:44 pm

Best news I’ve heard today…

#62 Smoking Man on 04.16.13 at 11:52 pm

#44 Blacksheep on 04.16.13 at 10:29 pm

No one cares man….. Even when they are awake, the machine will crush and demonize. the herd will be with the machine.. Lose the black tee shirt, put on a suit, and go bend over a sheep…

#63 GenXer on 04.16.13 at 11:53 pm

Garth – don’t forget that this April had one extra sales day in the first two weeks – which is 11% more sales time. Combined with your 6.5, that could easily turn into double digit declines through the end of the month. Stay tuned.

#64 T.O. Bubble Boy on 04.16.13 at 11:53 pm

@ #60 mid on 04.16.13 at 11:44 pm

#30 T.O. Bubble Boy

Here’s a brief recap of what I remember, not verbatim
• tsx down Monday by 300 pts.
• tsx commodities and resource heavy
• tsx up today 115 pts.
• stick to 60/40 equities/fixed
• Cdn economy slowing down, gdp 1.5%
• Dow y-to-date up 13%
• tsx negative compared to us market
• need multiple asset classes for protection
• and I told you so about gold


many thanks!

#65 Tom Vu on 04.16.13 at 11:54 pm

Re: Conned inference call

I like that Garth gave out winning 6/49 numbers! (and Stan Lee Cup winner….sorry Maple Leafblower fans….Haleys comet hint- hint)

Not sure which draw ….but forearmed is 4worned.

#66 TurnerNation on 04.16.13 at 11:54 pm

#30 T.O. Bubble Boy

Information was provided to the True Believers.

As you know we are awaiting the spaceship taking us to Planet TurnerNation – located in the Garthosphere – which is a home to stern risk managers and a dying Amazonian tribe in desperate need of an intensive breeding program.
Share the preferred punch. I’m ready.

#67 T.O. Bubble Boy on 04.16.13 at 11:55 pm

Corus Entertainment blames the kids for their financial results:

Why the kids? Why not the debt-addict parents, or the overall Canadian economy? Why not blame Flaherty, like the realtors do?

#68 FTP - First Time Poster on 04.16.13 at 11:59 pm

Party Like it’s 1999?

#69 Adrian on 04.17.13 at 12:01 am

Friend of mine bought a pre construction condo in a GTA as an investment property. He already lives in his own condo which is his primary residence. The completion date of the new one is sometime in 2014.

This is a very intelligent person. When we discuss the real estate market he acknowledges it seems to be overheated, and that a correction is likely!

His strategy is to wait for his realtor “friend”, to give him the signal to sell the assignment. So far no signal. This same realtor advised to buy the investment property in the first place, and is apparently looking out for my friend’s best interests. I’m not sure if it’s their friendship that is the problem or is it the realtor’s understanding of the market.

I don’t understand how anyone can take on so much risk knowing what’s around the corner. It is exactly this type of blind realtor trust that is going to get a lot of people in trouble.

I wish my friend the best, but i have a feeling he’s going to learn his lesson the hard way. He may lose everything on this deal. The realtor will lose a client, maybe a friend even, then move on with his life.

#70 Smoking Man on 04.17.13 at 12:05 am

I realized I’m a real man, midnight blogging and drinking, but at the tax farm at 6am..every day.

Dudes you got teen aged daughters, bring home a boy. Tell your daughter abserve how he treats his sisters and his dog.

If bad to dog or sister lose him. If family don’t have a dog, lose him.

If he like cats definitely lose him….

Just saying

#71 Cheatin — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | The Affluent Boomer™ on 04.17.13 at 12:06 am

[…] I mean, why not? Won’t be built for three long years, and in that time it’ll surely appreciate in value. If you don’t feel like living there for long, you can always sell the sucker to a greater fool. And because it’s your principal residence, any gains will be tax-free. Woohoo. Continue reading → […]

#72 angel on 04.17.13 at 12:18 am

Toronto’s Condo King Brian Lamb’s latest sales pitch.

“If you’d rather not eat cat food in your retirement, you’d better invest in condos.”

– Developer Brad J. Lamb.

#73 angel on 04.17.13 at 12:21 am

Lamb’s strategy?

Scrape together $20,000 (that’s your down payment on a small condo that is also your own residence) and using what he called conservative projections of 4% annual growth in real estate values, Lamb says you’re soon able to use the equity in your unit to buy a second one. You rent that out for enough to cover its mortgage, condo fees and other costs and eventually sell it for a profit.

#74 Real_Professional on 04.17.13 at 12:26 am

Awesome blog tonight Garth – wow good one!!!

#75 truth-teller on 04.17.13 at 1:20 am

Anyone who thinks that the US economy is poised for a robust recovery north of 3%/year is either an idiot or a propagator of lies….

GDP growth in Q1 was 3%. — Garth

#76 Buy? Curious? on 04.17.13 at 2:05 am

Condo owners? Is that, like, an oxymoron i.e., “Jumbo Shrimp”, “Military Intelligence” or “Brad Lamb’s wealth seminar”? Bahahaha!

Great post, Garth. I love nothing more than hearing how the tax man/woman catches up with the smug dudes that bragged at parties at how they used their student loans to buy a condo, lived with their parents while I was living about a Chinese restaurant with a messy roommate.

Ladies, not only do I like to dance, I care about sustainability. Thoughtful AND Sexy? Yes, I know it.

#77 brew on 04.17.13 at 2:21 am

Not many comments. It sounds like the tax cheats have lawyered up.

#78 Tony on 04.17.13 at 2:31 am

Haven’t heard of that one but wouldn’t CRA have to deem a valuation day like in the past if they change the tax rules on you? Problem is real estate is declining in price so you’d be looking at a capital loss after the valuation day in which case you could write-off 100 percent of the capital loss against any capital gains.

#79 HD on 04.17.13 at 2:59 am

Wealthy households would face new taxes on property and other assets under German plans to prop up the struggling eurozone.

Taxes on property or other assets would mark a significant change in Europe’s approach to funding bail-outs for eurozone members. Until now, the cost of rescue packages for countries like Ireland, Greece and Portugal has fallen largely on people who invest money in either those countries’ bonds or – in the case of Cyprus – bank accounts.

#80 Humpty Dumpty on 04.17.13 at 3:48 am

Who says cheaters never prosper…

How Congress Quietly Overhauled Its Insider-Trading Law

On Monday, when the president signed a bill reversing big pieces of the law, the emailed announcement was one sentence long. There was no fanfare last week either, when the Senate and then the House passed the bill in largely empty chambers using a fast-track procedure known as unanimous consent.

S. 716, which eliminates the requirement in the STOCK Act to make available on official websites the financial disclosure forms of employees of the executive and legislative branches other than the President, the Vice President, Members of and candidates for Congress, and several specified Presidentially nominated and Senate-confirmed officers

#81 Canuck Abroad on 04.17.13 at 4:22 am

36 / W – “It’s the intention criteria that is absurd. The CRA has too much leeway. If you don’t have an inventory and flip frequently then it shouldn’t be considered business income.”

Disagree. If it’s not your principle residence and you can’t prove that it is, why should you be entitled to the gain tax free? People have come to regard real estate as a no-lose tax-free casino and the sooner that idea is crushed the sooner sanity will be restored. It should be pretty easy to establish if a home is your principle residence and let’s hope the CRA is tough on this one.

Next stop, all the tax cheats who rent out their basement “suites” (Vancouver is full of them) and fail to declare the income as rental revenue. CRA are you reading this? CRA should definitely start with Vancouver and it’s probably going on in Toronto too. Do people still disclose rent paid on their tax returns (I’ve been away a long time)? If so, the CRA can match up all the rentals in private homes to the owners of those private homes to see if rental income was disclosed. Then tax away.

Oh, and penalties would help raise revenues too. Maybe the CRA could implement a short term tax amnesty to give people a short window of time to come clean on all the rental income tax cheating before big penalties kick in. Amnesty from penalties only of course, you still get to pay the tax.

#82 Jay on 04.17.13 at 5:23 am

Hi guys,

I thought I’d share something I saw the other day.

Know how everyone tells us that there couldn’t possibly be a housing bubble because Canada doesn’t have adjustable rate mortgages?

Interesting. Right in Ottawa, no less!

#83 eagle eyes on 04.17.13 at 5:40 am

How does CRA differentiate between flippers and investors? Mainly who gets dinged capital gains at 50% or business income at 100%? This is a very gray area. You can hold more than 10 properties for 10 years, then gradually start selling them off 1 by 1. Each one would then be deemed capital gains, thereby you would only have to pay 50% on the “gains”, OR 100% taxed on business income because you have a large real estate investment portfolio? Do we have any accountants in the house?

#84 Timbo on 04.17.13 at 7:12 am

“A senior Chinese auditor has warned that local government debt is “out of control” and could spark a bigger financial crisis than the U.S. housing market crash. ”

out of control is the new catch phrase…….

“The sweeping US immigration bill, likely to be unveiled today, may propose a substantial increase in the much sought after H-1B visa, but the conditions imposed therein, if approved by the Congress, would prove to be a death knell for Indian-American companies.”

Here that RBC , the US is starting to protect against outsourcing….what’s your move??…..

#85 fancy_pants on 04.17.13 at 7:41 am

The CRA is like a rabid dog. They bite first, ask questions later. And immediately after you file, you are automatically assumed guilty until proven innocent.

#86 fancy_pants on 04.17.13 at 7:45 am

#79 HD on 04.17.13 at 2:59 am

yup, only two guarantees in life … death and taxes.

#87 fancy_pants on 04.17.13 at 7:48 am

#70 Smoking Man on 04.17.13 at 12:05 am

what if he’s a smoking man? Hello foot – meet kids a s s
bye bye

#88 Mark CA Toronto on 04.17.13 at 7:53 am


I am CA in Toronto who specializes in Tax. I have a a school teacher \ Mom client who bought a Condo 6 years ago and sold it shortly after it was registered. She got reassessed by the CRA who is trying to tax the gain at full rates on account of Income and not even as a Capital Gain. I’m fighting the Reassessment for her as she has a somewhat good case in that she didn’t have a previous Principal Residence and she actually moved into the Condo for a short 3 months and can prove it. We’ll see what happens.

Sounds like you will lose. — Garth

#89 Herb on 04.17.13 at 8:16 am

#44 Blacksheep,

Don’t waste energy trying to enlighten, them.

Gee, that’s why I did not respond to Julie’s further comments, even the ones inviting me to counter. I mean, who needs facts to hold an opinion?

#90 NRI13 on 04.17.13 at 8:22 am

Perhaps, this will put pressure on the rental prices of condos to decrease as the owners, landlords of these units may have to lease/rent the unit instead of flipping….just saying..

#91 jess on 04.17.13 at 8:24 am

unusual lending practices just two weeks before the Icelandic system failed last October.

“On 31, July 2009, internal documents[10] from Kaupthing Bank were leaked: Wikileaks exposed a confidential 210 page document listing Kaupthing’s exposure to loans ranging from 45 million to 1.25 billion Euros.[11] The leaked presentation revealed the bank had loaned billions of euros to its major shareholders, including a total of €1.43 billion to Exista and subsidiaries which own 23% of the bank.[12]

#92 NRI13 on 04.17.13 at 8:25 am

Sorry, the same thing is happening in newer developments in Brampton, Vaughan with houses as well. Many individuals have bought homes that they flip within months of getting the possession, to boot these residences are claimed as principal residence too…sounds like they might be getting a call/letter from the revenue boys..

#93 neo on 04.17.13 at 8:25 am

GDP growth in Q1 was 3%. — Garth

When the revisions come out it will be lower. You know that.

#94 T.O. Bubble Boy on 04.17.13 at 8:28 am

Battle for sideline cash is on!

ING’s (Scotia’s) “special” 2.5% rate now has competition from PC Financial’s 2.6% rate:

On say $10,000, that 0.1% difference (for 3 months) adds up to what? $2.50 or so? That is like getting a free coffee on Roll Up The Rim!

#95 AK on 04.17.13 at 8:32 am

Rest assured, Gold Bugs.

Jim Cramer is on your side.

Jim Cramer – Booyah

#96 jess on 04.17.13 at 8:32 am

Swiss Bank Pushed Offshore Middleman to Skip Anti-Money Laundering Checks for Wealthy Clients


request came with a wrinkle: Clariden didn’t want to disclose to TrustNet the identities of its clients.

Law requires middlemen like TrustNet to verify the names and backgrounds of their clients — a process called “due diligence”

#97 Canuck Abroad on 04.17.13 at 8:35 am

88 / Mark – How does moving into a place for 3 months make it a principle residence? Nice try. And how does someone not previously have a principle residence? Was she renting? Then she still had a principle residence, it just wasn’t one that was owned. And where did she live afterwards? Her mistake was that she did not six years ago disclose her obvious flip as a capital gain. Had she done so, she would probably not be getting reassessed now.

#98 Canuck Abroad on 04.17.13 at 8:50 am

And just a further comment on 88/Mark’s comment. In fairness to your client, the lawyers do not help. I bought a condo in Toronto many (c.15) years ago, thinking I would use it as a pied a terre. Decided shortly after completion I would not use it, put it up for sale. Lawyer suggested if I could move into it for 3 months or so I could call it a principle residence and pay no tax! I was astonished and refused. Disclosed it as a capital gain. Not much of a gain involved, so no temptation whatsoever, but I could see how if the numbers were bigger, some people might decide to go for it. So, thank some of the lawyers for the audits to come.

#99 Fairtax on 04.17.13 at 9:07 am

I agree with how investment real-estate is taxed. It is fair. I also agree that Vancouverites renting out their basements without declaring the income should be hunted down and penalized. I know of three on my block.

I must pay tax on all my investments (stocks & excluding the ones in the TFSA), and really, I could never get away with cheating because banks must report all going-ons in my portfolio.

Perhaps CRA should set up a reward program for those who report basement tax cheats.

#100 Chet Sanders on 04.17.13 at 9:25 am

Man, do the realtors think we’re all idiots?
Don’t answer that.

Not only do I deny the allegations, I deny the alligator.

#101 Timbo on 04.17.13 at 9:35 am

“However, it says the household sector will also be less of a force in driving overall economic growth — particularly in the housing market.”

Mama is putting away the credit card…..nooooo!!!

“Now the seller has ditched the original realtor, listed with a new agent, and the asking price has been dropped to $19,888,000, that’s 48% slashed from that ridiculous February asking price.”

Haircuts are getting dangerous……..

#102 Rational Optimist on 04.17.13 at 9:40 am

#83 eagle eyes on 04.17.13 at 5:40 am

If you hold a property for ten years, it is not a flip. This is my opinion, not CRA interpretation. But what were you doing for those 10 years? Most likely earning rental income, and paying income tax on it.

Determination would be about the length of the holding period, not the size of the portfolio. Final interpretation is intent: whether you purchased intending to sell for an appreciation, or if you purchased intending to earn rental income.

#103 Ret on 04.17.13 at 9:43 am

When will the CRA go after taxes not paid on condo and other rental income? I live in the student ghetto around McMaster and lots of the slumlords have owned multiple properties for years. We are talking hundreds of homes with 6-7 students, each paying $4000 per year for one room. The same is happening around every university and college across the land. I’m sure that everything is above board with those rental incomes. Yeah, right.

The CRA could make a huge killing here if they bothered to investigate. Landlords openly advertise their properties, be they condos or student rooms, so rocket science it ain’t.

#104 Toronto_CA on 04.17.13 at 9:47 am

“There’s perhaps never been a better time to sit on the sidelines and see how things shape up over the next year from the comfort of your rental condo.”


#105 Gunboat denier on 04.17.13 at 10:05 am

57 Shawn – arent day traders gains taxed as income? Same intent with interest and dividends?

#106 The American on 04.17.13 at 10:08 am

At #75: Truth teller… Do your research before you write. The U.S. economy already surpassed 3% growth this year, and that happened by end of March. The economy is cooking here. Haven’t met an American in the last few months that would disagree. People are spending again, and spending rose sharply. Great news for a consumption-based economy. Bad news for Canada’s commodity-based economy as the U.S. becomes increasing more energy independent AND returns jobs back to U.S. soil. USD stronger than CAD, gold now lost 10%+ since last Friday (the largest drop for the rock in 30 years). I think you may crazy.

Anyone who believes Canada is going to ride the coattails of the U.S. recovery is insane. These are the same people who claim Canada didn’t repeat the bad behaviors of U.S. banks and consumers, perhaps the most ludicrous and stupid notion of all. Canada’s economy is already taking a tumble, and it will continue, and it will get increasingly worse, so hedge accordingly. I find it freaking hilarious how people can believe Canadian banks didn’t act even worse than U.S. banks (everyone else across the globe seems to clue into this fact now, except for, eh hem, Canadians). Canada’s economic demise is only lagging the U.S. by several years. It’s a wave that must happen to return to the mean, and it is quite difficult on everyone’s pocket books. You can’t say you were never warned like, oh say THOUSANDS of times.

#107 IvanDrago on 04.17.13 at 10:21 am

With the news of the CRA going after condo flippers….people are REALLY going to avoid them now….could see an easy 50% crash in Toronto and Van condos. Brad Lamb is going bankrupt, I LOVE IT!

#108 Gunboat denier on 04.17.13 at 10:25 am

Further to my comment just a reminder that dividends have already been taxed as income at the corporate level
and if eligible a tax credit is given for that portion ie it is still fully taxed overall.

#109 CRA is COMING for YOU! on 04.17.13 at 10:35 am

Perpare for GREAT FINANCIAL PAIN! thousands and thousands of people played this game and now the government of Canada has caught up to you and you will feel the PAIN. I don’t even think you can go bankrupt. You may now lose your house but the debt owned to the government is forever. Thousands of people to go bankrupt and lose everything. Looks likeeven more foreclosed houses on the market.

#110 Dr. Wayne on 04.17.13 at 10:35 am

#4 Dr. Hoof – Hearted on 04.16.13 at 8:40 pm



Is this moron ‘still’ breathing ???

#111 CRA is COMING for YOU! on 04.17.13 at 10:39 am

Mark CA Toronto on 04.17.13 at 7:53 am

I am CA in Toronto who specializes in Tax. I have a a school teacher \ Mom client who bought a Condo 6 years ago and sold it shortly after it was registered. She got reassessed by the CRA who is trying to tax the gain at full rates on account of Income and not even as a Capital Gain. I’m fighting the Reassessment for her as she has a somewhat good case in that she didn’t have a previous Principal Residence and she actually moved into the Condo for a short 3 months and can prove it. We’ll see what happens.

Sounds like you will lose. — Garth

LOL….Garth is right sounds like they will lose. This might be tens of thousands of people will will be upto their eyeball in debt. Don’t forget INTEREST is added since Day one of the offence.

#112 Bobby on 04.17.13 at 10:40 am

I recall a similar action by CRA here in BC in the 80’s. a lot of properties were changing hands and people were overlooking their obligations to pay tax.
Now that the word is out I would suspect we will hear more and more about this.

#113 Blacksheep on 04.17.13 at 10:41 am

Smoking man 62,

Your profiling needs work.

Been an owner since 1991. While the slaves toil, I
seek distraction. Note the word ‘game’. No delusion
of changing the system. Thanks for the feed back.

#114 Tony on 04.17.13 at 11:01 am

Re: #88 Mark CA Toronto on 04.17.13 at 7:53 am

A valuation day should be deemed by the federal government because the tax laws were changed. Since she bought before the valuation day that should be etched in stone, she is exempt from paying any tax.

#115 Old Man on 04.17.13 at 11:08 am

#45 Smoking Man – Your observations are so correct, as no woman could befriend me at my residence unless my dog gave her a pass with a sniff test. Now if my dog wagged its tail she could stay, otherwise had to leave.

#116 Ross K on 04.17.13 at 11:27 am


Just a comment on any statistic released by any Organized Real Estate body in Canada.

All MLS supporting organizations have a Legal Binding Obligation to REPRESENT the interests of their “effective” clients, that being HOME OWNERS who have signed contracts to have their home listed in the MLS. Those contracts contain fiduciary duties to get the highest price possible and do no harm to those sellers.

The result is that throughout the history of Organized Real Estate in Canada all statistics, they report, MUST BE reported to the benefit of the SELLERS.

If ORE or the Franchise Brands or any Brokerage that currently has an active listing, ever communicated statistics that were detrimental to the financial interests of their clients they would be sued.

Where the problem lies is in the Media and Financial services community, who use those stats at face value without vetting and subsequently reporting the true changes as often revealed here on

That being said their is an index available to buyers that has a 100% forward predicting accuracy rating since 2008. This index is only available in Canada and because of the unique structure the MLS systems operate under, found no where else in the world.

I encourage Home Buyers or future Home Sellers to find that index, as it is the only one currently they can trust.

#117 Tony on 04.17.13 at 11:40 am

Re: #105 Gunboat denier on 04.17.13 at 10:05 am

No everything is taxed as capital gains or capital losses with the exception if you chose a one time declaration to deem everything as income before you ever traded anything in the first place. Many people chose this who trade future contracts.

#118 Godth on 04.17.13 at 11:41 am

Ahem…cough, cough

#119 Dr. Hoof - Hearted on 04.17.13 at 11:44 am

#110 Dr. Wayne on 04.17.13 at 10:35 am

#4 Dr. Hoof – Hearted on 04.16.13 at 8:40 pm



Is this moron ‘still’ breathing ???


Yes….and ….duck !

#120 Craig on 04.17.13 at 11:46 am

Thanks to those who responded to my questions about selling my house.

Garth, (and others)what are your thoughts / experiences, on using an Real Estate Agent versus going private and using companies like the Property Guys, etc?


I always use an agent. — Garth

#121 Blacksheep on 04.17.13 at 11:55 am

Herb 89,

“I mean, who needs facts to hold an opinion?”
Blacksheep 44,

“The game is, trying to sneak systemic truths into
your comments, bolstered by facts and links.”
Opinions are like arseholes.

Facts supported by links, are hard to dispute.

#122 Old Man on 04.17.13 at 11:56 am

#88 Mark CA Toronto – Mr. Turner is correct, and you are wasting your time, as the mistake she made was the 3 months, and should have waited a full year for a solid case. Are you really a tax specialist?

#123 HD on 04.17.13 at 11:57 am

@ #17 HD on 04.16.13 at 9:01 pm

This is handle is already used by me.

Can you kindly change it to avoid any confusion?




#124 HD on 04.17.13 at 12:02 pm

For those of you enquiring about how often you should rebalance your portfolio here is a great article about the topic:




#125 Tom Vu on 04.17.13 at 12:03 pm

Brad Lamb…

After CRA finished….Remember not to drop bar of soap….

Ah….. just ignore…

#126 Canadian Watchdog on 04.17.13 at 12:11 pm

Spot the dip in MLS listings one week prior to TREB's mid-month report. Chart

#127 Old Man on 04.17.13 at 12:11 pm

#52 Mississauga With Love – once again Mr. Turner is correct, as on offer is an agreement of purchase and sale presented, and the vendor can reject such by doing nothing, and needs not on a contract to acknowledge anything with a sign back from the potential purchaser – utter nonsense!

#128 Bottoms_Up on 04.17.13 at 12:17 pm

#41 Gladiator on 04.16.13 at 10:24 pm
You’re giving them too much credit. Those were all decisions made with a short-term (short-sighted?) horizon. Same with the recent demolishing of the long mortgage. Weave it all together and it looks like a conspiracy, but really it’s just a captain trying to steer it’s ship in very rough waters.

#129 Bottoms_Up on 04.17.13 at 12:22 pm

#46 dave b on 04.16.13 at 10:35 pm
That’s sick they can throw out the case against TREB opening up the mls books based on a technicality. 5 years of effort for nothing. This needs to go before the Supreme Court.

#130 Bottoms_Up on 04.17.13 at 12:36 pm

#58 Jonah on 04.16.13 at 11:37 pm
It’s called equity and savings. If a couple is currently making a combined $150,000/yr, and has been in the housing market for 12 years, well they likely have a big chunk of equity in their current home, and may have some savings.

It is easy to imagine they could bring over $200-250k in equity/savings into a new transaction on a home priced around $550,000, leaving them with a $300,000 mortgage.

#131 Kilby on 04.17.13 at 12:38 pm

#120 Craig on 04.17.13 at 11:46 am
Thanks to those who responded to my questions about selling my house.

Garth, (and others)what are your thoughts / experiences, on using an Real Estate Agent versus going private and using companies like the Property Guys, etc?


I always use an agent. — Garth

In our area last year “alternate real estate brokers” accounted for less than 1% of total sales. Typically they are overpriced and don’t sell or sell for less than a traditional company can get

#132 Old Man on 04.17.13 at 12:42 pm

Now what is happening today will have a huge impact on the spring rush with real estate with a chain effect as the TSX is tanking. Now pay attention to which sectors are being hit, as for the most part is resource related, which includes modes of transportation as well. There are those who bought debt to buy homes, and bragged about the savings being held back with investments here and there. Today the margin calls are going in, and losses are being taken, so the nest egg is being compromised.

What does this mean? I say panic is afoot with too many people that are going underwater on all fronts, and the potential buyers will disappear across Canada for a real estate purchase this Spring, and those that are holding debt might want to dump, including the speculative investors to get out on the empty or rental condo units. This is a perfect formula for disaster can can come quickly – we shall see! Mr. Turner said a correction was coming, did he not?

#133 Axxman on 04.17.13 at 12:43 pm

#126 Cdn Watchdog – Where do you get this number from? I’ve always suspected that they are stuffing listings in the bottom drawer when it works to their advantage.

#134 Richard in Kelowna on 04.17.13 at 12:45 pm

My, My……..looks like the wheels falling off the NA markets….Maybe gonna follow the precious metals down…This could get very ugly folks….

Markets are down 1.2%. This is the correction we all expected. — Garth

#135 Chris on 04.17.13 at 12:47 pm


Any thoughts on the recent Competition Tribunal decision to dismiss the Bureau’s case against TREB (albeit possibly on a technicality)?

Also, I noticed you mentioned that you always use an agent to sell.. Do you negotiate on commissions and fees? Any thoughts on alternative listing methods?

I’ve started a website that focuses on creating an agent marketplace and enhancing agent-related information. It also helps home buyers and home sellers save on real estate agent commissions by encouraging agents to compete for business in an auction-style process. Would love to get your thoughts but I’ve omitted the URL because I don’t want to be accused of spamming / self promotion (did include it in my post metadata though)!

#136 bill on 04.17.13 at 12:51 pm

”If he like cats definitely lose him…. ”
but smoking man , Cats are natural born track sixers…
they view everyone as an employee.
one would think you and the cats would get along very well.

#137 Post Haste on 04.17.13 at 12:55 pm

Funny what you posted today – I was speaking with my wife – we currently live in our “main residence” – and laughed at what if we win the Princess Margaret Home Lottery draw – that show home won’t be our prime residence and if we sold – the taxes payable could be substantial – so if I sold the lower value home (which likely is our current home) and contend that the lottery home was now our main residence – that would make sense on the tax issue.

#138 Luke Siragusa on 04.17.13 at 12:57 pm

@ #58 Jonah: “…I can never understand how can two people who earn less that 200K afford a house that is over 500,000.”

All you have to understand is that Canadians’ household debt is a record levels. Now do you get it?

#139 Rational Optimist on 04.17.13 at 1:05 pm

106 The American on 04.17.13 at 10:08 am

“Anyone who believes Canada is going to ride the coattails of the U.S. recovery is insane. These are the same people who claim Canada didn’t repeat the bad behaviors of U.S. banks and consumers”

That’s wrong. I don’t eat that tripe about “no subprime” and “no bank bail-outs” in Canada. Canadians are now more highly-indebted than Americans were before the crash, and our banks have done plenty of irresponsible lending.

Canada is going to ride the coattails of the U.S. recovery. This isn’t a competition, this is the most important economic relationship of any two countries anywhere in the world. What’s good for the U.S. is good for Canada, obviously. No Canadian will be making smug comments about subprime mortgages in ten years’ time, so don’t take it personally.

You say that the USD is stronger than the loonie. Good. Maybe a sixty-cent loonie would mask our manufacturing sector’s poor productivity gains, make it competitive again. U.S. energy independence will be great, the sooner oil loses, the sooner the States can onshore as much of its manufacturing as possible, the better.

I like your confidence, and I hope you’re right that your countrymen are as confident as you. It’s going to be great, I agree with you.

#140 realtor on 04.17.13 at 1:05 pm

I’m sure the first thing CRA will be going after is that in the last few years, many people took advantage of the rising property condo pre-sales by “assignment of contract”. The obvious flips should be 100% business income, not capital gains.

#141 Nodebt on 04.17.13 at 1:08 pm

#99 Fairtax

You sound like a Rat! Go eat some Cheese! Worry
about yourself!

#142 Old Man on 04.17.13 at 1:13 pm

In the spot gold market every dead cat bounce is collapsing, and look at the spot market of sweet crude oil, as there is brent, sweet crude, and that junk that Alberta is bragging about. Let us all say a prayer for those in Alberta, as real estate might be tanking soon, and where is Caesar?

#143 Canadian Watchdog on 04.17.13 at 1:20 pm

April mid-month TO condos sold cvs data is posted here.

#144 In the cold from Toronto on 04.17.13 at 1:23 pm

#58 Jonah – I agree with you. It is so hard to save $50k, yet people seem to think that they can afford a house worth $500k… I never understood how they can be so dumb…

Then I remembered that math skills are lacking, that most people look at the carrying cost of the mortgage – and disregard everything else… I calmed down, and started to pithy them.

#145 Buy? Curious? on 04.17.13 at 1:29 pm

Garth, how many people dialed in to your conference call and will you be posting a link to the playback? I couldn’t call in because I had a Zumba class.

You’re a hero, man, and don’t let anyone tell you different.

#146 Dr. Hoof - Hearted on 04.17.13 at 1:30 pm

How mainland Chinese immigrants are transforming Vancouver


According to immigration data, mainland Chinese arrivals in Vancouver outstripped those from Hong Kong by 7,872 to 286 in 2012. But even this 27-to-one disparity does not adequately portray the scale of the demographic shift that is taking place, because while the mainlander population is soaring in Vancouver, the number of Hong Kong immigrants actually present in the city has been falling sharply.

Mainlander numbers in Vancouver increased 88 per cent to 137,245 between 1996 and 2006, according to the most recent full census data. But Hong Kong immigrants present in the city fell 12 per cent, to 75,780, with nearly all of those losses occurring in the latter five years.

Although 18,890 new Hong Kong immigrants arrived in Vancouver in the decade to 2006, the fall in the number of such immigrants present in the city suggests that 29,325 left Vancouver in the same period. Overall, Hongkongers seem to be leaving Vancouver by the thousands, just as mainlanders are arriving by the tens of thousands.

Real estate agent Julia Lau was part of the Hong Kong wave who stayed, and she now estimates that 80 per cent of her buyers are mainlanders. “I’ve been a real estate agent for eight years. In the beginning we had a lot of buyers from Hong Kong and Taiwan, but I think maybe they all went home. Now, they are all from [mainland] China,” said Lau, at an open house for a home in the Oakridge neighbourhood, where potential buyers whispered in Putonghua as they inspected the luxury fittings.

etc. etc.

Canada does not keep records on foreign ownership, but a Landcor Data analysis of all 164 homes sold for more than C$3 million (HK$23 million) in Vancouver’s core Westside neighbourhood in 2010 showed that 74 per cent were sold to buyers whose names were mainla

#147 Old Man on 04.17.13 at 1:33 pm

Now look at this picture and will give my take with the scorned wife whose husband went for a hottie that was cheating on her. She was no prize, and neither was he, but that young gal just inherited $2 million, and he saw a better life to manage her money. :) I have see it all, and money is not the answer.

#148 Dr. Hoof - Hearted on 04.17.13 at 1:41 pm

Funny that CRA is tackling this issue “now”….

A while back, this question was posed on this log re: how parties were flipping even condo assignments etc and Garth answered that CRA has the tools and the resources….IF THEY CHOOSE TO.

I recall in the early 1980’s , after the economy went flush
….then CRA was going after people…I recall a TV spot on how they were even going after childrens’ bank accounts.

IMHO, if CRA is going on the attack now, its a sign the economy is tanking….aka they don’t want to upset the economy when its booming. As a side issue, watch if they unravel and uncover any proceeds of crime ie money laundering etc. and start seizing property.

Anyway this insanity needs to stop, one way or other.

#149 Mike T on 04.17.13 at 1:41 pm

Markets are down 1.2%. This is the correction we all expected. — Garth


soon it will be time to buy stuff on sale!

Thanks Mr Turner. You are the lighthouse of truth in the sea of disinformation.

#150 Richard in Kelowna on 04.17.13 at 1:53 pm

“My, My……..looks like the wheels falling off the NA markets….Maybe gonna follow the precious metals down…This could get very ugly folks….

Markets are down 1.2%. This is the correction we all expected. — Garth”

TD down 8 % since peak in March. Hope you’re right..

Why would I not be right? Assets do not climb, or fall, without reason. — Garth

#151 mayhem in riverdale on 04.17.13 at 2:04 pm

Markets are down 1.2%. This is the correction we all expected. — Garth

only problem, … the bear market in stocks is just beginning. look for a 30-35% correction in US stocks within 18 months.

it’s inevitable.

You made that up, right? — Garth

#152 Stoopid Idiot on 04.17.13 at 2:09 pm

Dr. William Black, The US Banking System is Absolutely Primed for the Next Meltdown

Former bank regulator and Professor William Black says, “Apparently, regulators are much more sophisticated than we were because we had never thought of leaving felons in charge of our largest financial institutions.” Dr. Black contends, “This started with the first lie of the virgin crisis–that the banks are pure and had stopped violating the law. The second lie is that we can’t prosecute . . . because if we did, we would cause the financial system to collapse. This is ludicrous.” Dr. Black predicts, “The U.S. banking system is absolutely primed for the next meltdown. Dr. Black and others think, “There is pervasive fraud at the most reputable banks. . . . The U.S. financial system is sick, and we still have the fundamental dynamic of a regulatory race to the bottom.” Join Greg Hunter as he goes One-on-One with UMKC Professor William K. Black.

#153 AK on 04.17.13 at 2:21 pm

#150 Richard in Kelowna on 04.17.13 at 1:53 pm

“TD down 8 % since peak in March. Hope you’re right..”

You should use this as a buying opportunity. TD is the best Canadian bank to invest in as they have a major footprint in the U.S. Market, Personally, I prefer JPM though.

#154 Stoopid Idiot on 04.17.13 at 2:23 pm

How the Chinese currency is replacing the U.S. Dollar in global oil markets

#155 not 1st on 04.17.13 at 2:28 pm

Garth, I haven’t seen an TV appearance from you in a long time. Are you blacklisted by the MSM?

Would you ever agree to appear on the Lang and O’Leary show or BNN in general?

Why? — Garth

#156 Shawn on 04.17.13 at 2:30 pm


High debt at 1.65 times income seems like a bad thing.

But Charlie Munger follows some dead mathematian who said; “Invert, always invert!”. Charlie is the billionaire vice chair and partner of Warren Buffett, so this has worked OK for Charlie.

So let’s invert the debt question to the following:

Why are the banks willing to lend so much money to consumers?

Yes it’s partly CMHC. But they alos lend copious amounts on credit cards, non-CMHC lines of credit, car loans and other perosnal loand. And they do it a very low interest =rates, Why?

Well largely it’s because consumers have been very good at paying back debt.

The bank sees that the economy is set up such that most people have stable jos. Their income is annuity like.

Based on what the banks see, people are good credit risks.

Debt and credit allow us to buy houses when we are young rather than waiting until middle age.

Debt is the economy’s way of allowing seniors to share their built up surplus with the youngsters.

Seniors put money in banks, young people borrow it. They pay it back.

Young people can borrow money at record low rates.

Is this really a bad thing when they do so?

Invert, always invert!

#157 Craig on 04.17.13 at 2:32 pm

I’m confused Garth

You say the stock market correction was expected, as it’s been making record highs of late and you fully expect it to take off once again. ( I agree)

Yet house prices are also at record highs and a correction is also imminent, yet you seem to believe that the price of homes will continue to drop for many years.

Why is that?

Markets get too hot, correct, then head back up, why not housing?

The US is still in far worse shape than us, (National Debt) yet their housing market is rebounding quite nicely.

Their banks are ranked 40th in the world and ours are ranked #1.

Yet you say our housing market is doomed. What am I missing here?

Because it doesn’t take $400,000 to buy a stock. — Garth

#158 Richard in Kelowna on 04.17.13 at 2:47 pm

If you’re looking for smiles don’t go to BNN today.

#159 Old Man on 04.17.13 at 2:47 pm

#153 AK – love the TD, as one time wanted a credit card with the internet only, but will not fill out forms, so guy brought up my stats, and said whatever you want can do such on the computer, as you need not have to fill out anything. I said $1000, and it was done, but everytime I went to a bank there was a message for me that will give me more.

I can go into any TD bank and make a deposit or a counter cheque from another bank with no hold, and do not even have to present my card for any deposit or withdrawal of funds, as they all know me well, as have funds that will not bounce. The computer systems say all, so they know am not broke.

#160 jess on 04.17.13 at 2:51 pm

#14 Humpty Dumpty
you may enjoy this metaphor

Published on Monday, April 15, 2013 by Common Dreams Looking for Cheats in Corporate Tax Filings: A Descent into the Circles of Hell
by Paul Buchheit

#161 Devore on 04.17.13 at 2:59 pm

What happening in Vancouver these days? High inventory, low sales.

Van Price Drop reports this graph showing stale listings, in no small part responsible for the sticky prices. At any given time, over half the inventory is not realistically listed for sale. If you’ve been listed for 6+ months, your pricing is out of touch with reality.

#162 Westernman on 04.17.13 at 3:06 pm

” Do the Realtors think we are all idiots?”
No, they don’t think ALL of us are idiots – just 99% of us.
And the herd proves it every day – buying absolute junk in crap areas ( like Canada ) for half a million and up…
They don’t think we are idiots – they KNOW we are…

#163 Humpty Dumpty on 04.17.13 at 3:07 pm

Yup Shawn, it appears whats ok for Charlie is ok with you…..

Charlie Munger: Gold Is For Holocaust-Era Jewish Families To Sew Into Their Garments; Civilized People Don’t Buy Gold

Did you invert your cowboy hat for a white pointy one…

#164 Devore on 04.17.13 at 3:23 pm

And for S&Gs:

Top 10 Vancouver nominal price drops. You won’t even make this list unless you’ve dropped your price more than $4M. It’s not New York, folks, just Vancouver.

#165 AM on 04.17.13 at 3:30 pm

1.2% decline is nothing. TSX is now down 7% from peak in March…just sayin’.

What do you expect? Endless increases? Of course markets correct. — Garth

#166 fisheman on 04.17.13 at 3:37 pm

Post #146 got it right with the link to the South China Post. I’ve been in west side Vancouver housing since my first place in Dunbar 1978. Our local papers wouldn’t dare print an article like that. I especially like “not white flight” but “cashin in”.

#167 Craig on 04.17.13 at 3:45 pm

Because it doesn’t take $400,000 to buy a stock. — Garth

Not sure what you mean.

My point was, stock markets go up, correct, then start to go back up. History confirms that.

Why do you feel the downturn in housing will be so prolonged in Canada in general? ( I believe you said 10yrs?)

Since interest rates cannot fall further incomes have to rise to restore affordability, or prices decline significantly. This will take time. In the absence of robust economic growth, and given existing debt levels, there is no reason to anticipate higher housing demand, or the enhanced ability of people in a country already saddled with 70% ownership, to move up. — Garth

#168 Blacksheep on 04.17.13 at 3:50 pm

Shawn 156,

Your systemic leg humping post is missing one critical word / action. With out this one word / action your whole premise, ceases to function. Garth just covered why cash is king and assets are losing value. It is why many highly leveraged home owners are potentially screwed.

Your clearly a smart guy, why no mention? Doesn’t fit the theme?

#169 Devore on 04.17.13 at 3:50 pm

You made that up, right? — Garth

No, probably read it on Zerohedge or a doomer/gold bug newsletter. Then they spread throughout the Internet, regurgitating links, convenient facts, conclusions, and talking points. One thing ZH is good for is the entertainment value of sexist commentary about CNBC hosts, playful joshing of Jim Cramer, and hilites of Rick Santelli’s grandstanding, because in their 4 years of existence they have collectively failed to predict anything of consequence.

#170 Humpty Dumpty on 04.17.13 at 3:52 pm

Jess… that was wicked… Thnx

Isiah 14 . 12 -14

How art thou fallen from heaven, O Lucifer, son of the morning! how art thou cut down to the ground, which didst weaken the nations!

For thou hast said in thine heart, I will ascend into heaven, I will exalt my throne above the stars of God: I will sit also upon the mount of the congregation, in the sides of the north:

I will ascend above the heights of the clouds; I will be like the most High.

Yet thou shalt be brought down to hell, to the sides of the pit.

They that see thee shall narrowly look upon thee, and consider thee, saying, Is this the man that made the earth to tremble, that did shake kingdoms;

That made the world as a wilderness, and destroyed the cities thereof; that opened not the house of his prisoners?

All the kings of the nations, even all of them, lie in glory, every one in his own house.

If “The path to paradise begins in hell.”, Kasha just released song that would be appropiate for their journey….

#171 thiscountryisgoing down the toilet on 04.17.13 at 3:57 pm

heres the zillion dollar question……what took the CRA this long to finally go after the very public information of real estate transactions and ownership and reclaim the tax owing from flippers? The lapse is a travesty that must be explained…..this has been going on for decades… very public forums….it’s not as if this clam has been a secret in any way.

Among professionals… was speculated that the oversight was a purposeful tactic used to ingratiate the government to ethnic communities who used the loophole to full advantage……particularily a ‘certain’ groups proclivity towards building ‘family’ homes and flipping them…tax free. The Canadian system has been abused and it’s about time we recouped the full value of ‘everyones’ industry…not just having the CRA attacking vulnerable hairdressers and waitresses.

The CRA can access every person, utility, business, developer….and agencies personal/banking/legal/criminal/travel/license information without warrrant or legal encumberance …so why have they waited to pull the publicly available records of Notaries ( no client privelage there) and the Land Titles Office?

The historic coverup stinks to high heaven of political correctness. Thanks to whoever has finally grown a set and has directed the CRA to do its job……maybe if the tax system was applied fairly then general taxation would go down.

#172 blinded on 04.17.13 at 4:01 pm

What about Soros, Buffet, and Paulson dumping stocks in the last couple months? What about bell weathers such as P&G pushing out payments to suppliers to 90 days? What about EU stocks dropping to lowest level in 6 months? What about Germany’s downgrade and negative outlook? What about China’s animal apocolypse? What about the price of copper dumping? What about USA bland beige books?

Nothing to see here, move along, and keep investing in a balanced portfolio of stocks that are making money.

#173 Stoopid Idiot on 04.17.13 at 4:07 pm

#81 Canuck Abroad

They should try Fort Mcmurray

#174 Ralph Cramdown on 04.17.13 at 4:08 pm

#170 Humpty Dumpty

Job 13:5

#175 Stoopid Idiot on 04.17.13 at 4:18 pm

#106 The American

You’re a shut in aren’t you?

#176 timbo on 04.17.13 at 4:29 pm

“This is the second-largest discovery in the history of the world,” said Scott Sheffield, the chief executive officer of Pioneer Natural Resources Co., which is based in Irving, Tex.”

ooOh like I’m scared…here have a wet raspberry……

“Natural gas demand for power generation in the US will increase by 90% to around 40 Bcf/d by 2040, an official with ExxonMobil said Tuesday. ”

see , told ya were saved……….now quick markets find the floor!!!

#177 brainsail on 04.17.13 at 4:29 pm

“Housing affordability is based entirely on low mortgage rates”

“The days of historically high levels of housing affordability are numbered,” said Zillow Chief Economist Stan Humphries. “Current affordability is almost entirely dependent on low interest rates, and there’s no doubt that rates will begin to rise in the next few years.”

#178 espressobob on 04.17.13 at 4:29 pm

Thank you Garth & Scott for the replay, most informative. Actually hoping the TSX drops a bit more even after today. Sitting on too much dry powder.

#179 jess on 04.17.13 at 4:31 pm

arms length ???? is starting to sound more like lying at length

The Organisation for Economic Co-operation and Development (OECD) has adopted the principle in Article 9 of the OECD Model Tax Convention, to ensure that transfer prices between companies of multinational enterprises are established on a market value basis. In this context, the principle means that prices should be the same as they would have been, had the parties to the transaction not been related to each other. This is often seen as being aimed at preventing profits being systematically deviated to lowest tax countries, although most countries are also concerned about prices that fail to meet the arm’s length test due to inattention rather than by design and that shifts profits to any other country (whether it has low or high tax rates). It provides the legal framework for governments to have their fair share of taxes, and for enterprises to avoid double taxation on their profits.

#180 Old Man on 04.17.13 at 4:36 pm

I learned my lesson with the big crash in 2008/2009, as was holding a huge cash position, and was taking a few hits, so said all in to buy the discounted blue chips, as if the worse in life would have enough money to buy myself a trailer in some park. I looked at all sectors to determine what was important in life to survive with a great depression of sorts.

I look at my modest portfolio today with adjustments that I made in life, whereby, I doubled my money out of fear, and this hit with the TSX, am just laughing as my capital has gone up, and not down in the least, so can sleep at night with a smile on my face. Wish you all luck, and those who got hooped into buying debt with the real estate bubble RIP.

#181 salonist on 04.17.13 at 4:37 pm

#125Tom Vu on 04.17.13 at 12:03 pm

#182 jess on 04.17.13 at 4:38 pm

Finance Minister Maria Fekter fighting furiously with her counterparts at an Ecofin (European Finance Ministers’) meeting on April 12-14. The Europeans wanted transparency, and she didn’t.

#183 Canadian Watchdog on 04.17.13 at 4:58 pm

#133 Axxman

Not stuffing, giving spoonfed statistics to buyers and sellers. Alas, here's what happens next when monopolies think they can dictate housing markets.  

The Economist 1998: A high-rise bust

As one of Asia’s most successful economies goes into recession, its reliance on inflated property values has been exposed as a dangerous flaw.

Chart 1 Chart 2 Read notes on presales (the catalyst).

I've seen enough statistics and legal information to confirm this market is already crashing. They're just trying to hide everything before the entire fraud scheme is exposed. It's hard to prove RE boards manipulate stats. But when detectives face a crime with no witness, they look for a motive. RE boards have plenty of that.

Watch for a wave of builders and developers going bankrupt this summer. My work is done in this market. I'll be posting stats periodically for everyone to download.

Stay away from this market for a long time.

#184 Humpty Dumpty on 04.17.13 at 5:13 pm

“EU Common Criminals”….

“This EU is the New Communism”….. Nigel Farage

#185 Craig on 04.17.13 at 5:14 pm

Since interest rates cannot fall further incomes have to rise to restore affordability, or prices decline significantly. This will take time. In the absence of robust economic growth, and given existing debt levels, there is no reason to anticipate higher housing demand, or the enhanced ability of people in a country already saddled with 70% ownership, to move up. — Garth

That makes sense, thanks garth.

I plan on selling and renting for a few years. Right now the decision is to pay an Agent $30K to sell my $600K house or try it privately.

10 years ago my house was $300K and they would have made $15K on the sale.

My pay hasn’t increased 100% in 10 yrs.

They should be paid based on the square footage of the house not on a % of the value.

Paying a real estate company $30,000 to sell my house is insane….and they’ll probably do it in 3 – 4 weeks.

Do you know what an Orthopedic Surgeon makes from OHIP on a hip replacement?


#186 albertaguy on 04.17.13 at 5:28 pm

I am not sure why no one has picked up on this yet.

If we go with the idea Sell Canada, Buy USA

And Garths link to Principal Residence Rules (give it a year) ” …and it need not be located in Canada”

Theoretically then it is possible then to sell your principal residence in Canada, buy in US. Live less than 183 days per year in US for winter months. Rent in Canada for the summer months. Claim your prinicipal residence in US.

At some point in the future sell US at a profit and basically sell peak in both cases and pay no capital gains in Canada on either.

Rinse and repeat.

Question: Has anyone successfully followed this path?

Also, How to avoid or at least reduce paying Capital Gains on US property when US property eventually sold?

#187 Loopback on 04.17.13 at 5:43 pm

U.S. Renaissance?

“Despite modest growth, the economy remains a wellspring of misery, with mass unemployment, wage stagnation and factories going unused. In March, a smaller percentage of working-age people were actually working than at any other time since 1979.”

“The Fed has kindled speculation. Investors are desperate for yield and are paying up for riskier assets. In areas like real estate, structured finance and equities, the markets are ahead of the fundamentals.”

Efforts to Revive the Economy Lead to Worries of a Bubble

#188 Youth in Asia on 04.17.13 at 5:45 pm

Hahaha the market corrects because of an impending correction and some of you are suspecting another 30% retracement? This correction has been in the works since early March, but a 30% correction is highly unlikely. What’s more probable is a great buying opportunity!
Haha Some of you think you know so much about the markets when in reality you know so so little.

Great post Garth once again!

#189 Old Man on 04.17.13 at 6:03 pm

#186 albertaguy – Mr. Turner has made this all so clear, as one must adjust a portfolio of assets with a sense of intelligence from time to time with a balance that is ever changing in the real world. It is never a matter of this or that well defined, but rather a plan the transcends the norm from the specific to the general.

#190 Tom Vu on 04.17.13 at 6:03 pm

#181 salonist on 04.17.13 at 4:37 pm

#125Tom Vu on 04.17.13 at 12:03 pm


boo bs

#191 Tom Vu on 04.17.13 at 6:10 pm

#185 Craig on 04.17.13 at 5:14 pm

Paying a real estate company $30,000 to sell my house is insane….and they’ll probably do it in 3 – 4 weeks.

Do you know what an Orthopedic Surgeon makes from OHIP on a hip replacement?



Hip replacement not that complicated…can be done by autobody repairman (for cash ) or watch D.I.Y YOUTUBE videos.

Realtors = underappreciated professional.
Many are called…even more are chosen.

#192 Ballingsford on 04.17.13 at 6:20 pm

Photo meaning:
After a while you get tired of the trophy wife and you need to leave.

#193 Smartalox on 04.17.13 at 6:27 pm

Good to see that CRA finally decided to spring the trap on specuvestors; obviously they were waiting for rising markets to fatten up the geese before swinging the axe.

I bet all the realtors who accepted condos from builders for “recommending” pre-sale units in particular buildings to their clients are first on the lists. So much for saving the commissions!

The other target I hope to see are the gangsters and drug dealers who used pre-sales and flipped assignments to launder ill-gotten cash. How can someone who claims income of less that $35k/yr self-employed in a small business lay down $25k on condos, 5 at a time?

Tax evasion, it’s how they got Al Capone, after all.

#194 CalgaryRocks on 04.17.13 at 6:32 pm

At some point in the future sell US at a profit and basically sell peak in both cases and pay no capital gains in Canada on either.

Rinse and repeat.

Question: Has anyone successfully followed this path?

We lived in Florida 2000-2005 and moving back in the fall (for the winter).

We are keeping our Canadian residency because all of our income will come from a Canadian based business and we will only be in the US for less than 6 months or so at a time.

I think in order to get rid of your Canadian residency will be a problem unless you get rid of all your Canadian ties, including vehicles, bank accounts, rrsp,tfsa etc…

#195 Ballingsford on 04.17.13 at 6:33 pm

Meant to add ‘and demands that come with keeping a princess’.

#196 Humpty Dumpty on 04.17.13 at 6:37 pm

160 jess on 04.17.13 at 2:51 pm

Google this address….

666 Boylston Street, Boston, Massachusetts, United States

Click upper left pic for a street view…. Look Familar….

#197 jess on 04.17.13 at 6:56 pm

170 Humpty Dumpty
ah…the earthly oracles punishments
Bolgia 4: Sorcerers, astrologers, and false prophets here have their heads twisted around on their bodies backward, so that they “found it necessary to walk backward, / because they could not see ahead of them.

oh the irony
generation change
girl designs coat for the homeless than transforms into a sleeping bag….gm donate scap

#198 waiting on 04.17.13 at 6:58 pm

#185 Craig – one of the best reasons to use a realtor (and no I am not one) is that your property will be listed on MLS where most buyers look and compare. This advertising is going to make the difference for sure unless you have a buyer in your back pocket. Get an agent who’s been in the business a while and has a proven track record. If you try to sell as an owner you will be inundated with calls and visits from desperate realtors (first lesson in real estate class is call FSBO’s) and if you do get any interested buyer, they will want a break on the commission you’re saving. You can try negotiating on the commission – I did last time and saved $5000.

#199 waiting on 04.17.13 at 7:02 pm

#185 Craig – p.s. – the realtor doesn’t get the full commission – they share it with their agency and if there is another agent involved with the buyer, it gets shared with them also, so your agent may end up with %25 of the total. Ask friends and colleagues for references, interview a couple, (have them do a free appraisal) and pick the one you feel best about.

#200 Ralph Cramdown on 04.17.13 at 7:02 pm

#185 Craig — “I plan on selling and renting for a few years. Right now the decision is to pay an Agent $30K to sell my $600K house or try it privately.”

If you phone agents and ask what they charge to sell, most of them will hold out for full commission using all their most persuasive tactics. If on the other hand you pick up two “For Sale” signs at Dollarama and a 1″x2″x8′ at the lumberyard, you can make a perfectly serviceable lawn sign in 10 minutes flat, and then you’ll find agents will come to you and they won’t be nearly so inflexible on the commission. It would be unwise to offer the buyer’s agent less than the going rate in your area, but you can likely get at least half off the seller agent’s split, for an overall saving of 25% or more.

– Know what the place is worth, and don’t be unrealistic. Spend a few hundred for a professional appraiser who will provide you comparable sales right out of the local MLS
– clean, declutter and solve any pet issues; make it easy for the agent
– show it to any agent who calls or knocks, and make it clear that you’ll pay your market’s standard commission split if she brings a buyer. This will likely be a complete waste of time, but you never know. Have a tray for the agent to leave her card in, so she can see that her competition has been through as well.
– have a lawyer and a mortgage broker lined up, maybe put together a feature sheet — you might get a buyer before you find a decent agent, and you’ll have to walk the buyer through the process a bit: Have offer forms ready, explain that the deposit cheque gets made out to your lawyer in trust, and that their bank will take forever getting back to them on financing unless they’ve already made you an offer.

It isn’t that hard, and showing agents that you know it is the best way to negotiate on their commissions.

#201 CrowdedElevatorfartz on 04.17.13 at 7:11 pm

Total agreement, cant imagine why her husband would be “cheating” ……

#202 CrowdedElevatorfartz on 04.17.13 at 7:14 pm

@#170 Humpty
Yo Dumpy,
Save the sermon for Sundays, in a church. This is a financial blog.

#203 Humpty Dumpty on 04.17.13 at 7:25 pm

#183 Canadian Watchdog on 04.17.13 at 4:58 pm

#199 Ralph Cramdown

John 16:33

#204 salonist on 04.17.13 at 7:31 pm


So far, physicists can only account for 4 percent of what the universe is made of, said Thomas Koffas, a physicist at Carleton University in Canada.

“The remaining 96 percent,” Koffas said, “we have no idea.”

“Raven Bo · Top Commenter

4% is kind of interesting number since it is 1/25 = 1 / (5×5).
It is like combination 5 things taken 4 at time ie 5 = 5! / (4! * (5-4)!)
So it might be like 25 dimmensions that are only connected by a gravity.
5 things can be 3d + 1time + 1spin or 3d + 1electro + 1mag or other similar combo twice. Or perhaps 1 is gravity.

I believe in multibang and perhaps blackholes can be considered universes since time dilation make light takes infinite time traveling at the event horizon which make it infinate space. Sort of implosion to blackhole is like big bang on other side of event horizon.”

#205 Victor V on 04.17.13 at 7:33 pm

Glitter no more. Another rough day for Barrick shareholders:

#206 AK on 04.17.13 at 7:42 pm

55 The Man From Nantucket on 04.16.13 at 11:18 pm
“Husband is steppin out?

After you worked so hard to stay in shape for him?”
He is no Mr. Universe either. :-)

#207 Craig on 04.17.13 at 7:47 pm

Ralph and Waiting;

Thanks for the detailed responses, appreciated.

Lots to think about. I think the key is not to commit to a rental but sell first, with as long a closing date as I can get.

Then go rental shopping.

Wife wants a “nice” place and I want an inexpensive place, for a few years.

Wonder who’ll win that one.

#208 Pr on 04.17.13 at 8:04 pm

#185 Craig

The best way to lose money is to have this guy as a advisor , (READ) :#200 Ralph Cramdown on 04.17.13 at 7:02 pm

I suggest you they opposite !

Call a good Realtor with experience, you will see what its all about. The richest real estate investors have their Realtor to negotiate for them, their is some reasons why. One of them, is, it takes many years to be very good at it!

#209 Tom Vu on 04.17.13 at 8:05 pm

#205 Victor V on 04.17.13 at 7:33 pm

Glitter no more. Another rough day for Barrick shareholders:


Not sure why Barrick have problems ?

I heard they found a motherlode of natural gold- plated tungsten.

#210 Old Man on 04.17.13 at 8:06 pm

#207 Craig – who wears the pants in your marriage, as be a man, and take control with mutual discussion over coffee, as you are showing a weakness by saying – wonder who will win that one.

#211 Humpty Dumpty on 04.17.13 at 8:30 pm

HAM anyone…

Exclusive: Risk ranking: China revamps anti-money laundering rules –

Global Financial Integrity, a Washington-based financial watchdog, estimated in December that China accounted for almost half of the $858.8 billion of illicit funds flowing into tax havens and western banks in 2010 – more than eight times the amounts for runners-up Malaysia and Mexico.

Over an 11-year period from 2000, China was home to $3.8 trillion worth of illicit financial flows originating from corruption, crime or tax evasion, the watchdog said. The numbers cannot be verified as there are few estimates in the market.

The People’s Bank of China (PBOC), the central bank, issued its new anti-money laundering rules to financial institutions in December, requiring them to rate clients’ risks based on their location and the nature of their businesses, including their levels of transparency, five accountants and bankers with knowledge of the rules said.

#212 Ivandrago on 04.17.13 at 8:47 pm

$850 for a hip replacement? Maybe in Pakistan….

#213 Snowboid on 04.17.13 at 8:56 pm

#186 albertaguy on 04.17.13 at 5:28 pm…

Sorry, but do that and you may lose all your Canadian benefits but worse will be paying income tax to the IRS in the US.

No avoiding the capital gains – payable both in US and Canada – but see this for more info:

#214 My thoughts on 04.17.13 at 9:06 pm

Dear Garth. I read your blog because I like many other am sick about hearing how easy money was to make in real estate. Tired of hearing how easy it is to scam CRA. Tired of watching people with very little brain capacity make a small fortune in the last 5-10 years. So I did some searching on the Internet and I found you. I agree with everything you write. We are diversified with or investments… Paid off house… Etc… And I know that my financial situation is probably better then most people’s. having said that its frustrating doing things the right way and having to listen to friends, family, and relatives talk about how much money they are making in real estate. These people have never had a job/career in their lives as adults. They just sold a condo, a house. Another house … And live large.
Anyways that’s my vent. That’s why I read you to keep my sanity. I’ve been in my house for almost 10 years and was bored 5 years ago but hubby wouldn’t let us move with the other snowflakes. Now I read your blog to say sane. Real estate is a sore subject in this house.

#215 Herb on 04.17.13 at 10:17 pm

#121 Blacksheep,

Facts supported by links, are hard to dispute.

That, my friend, depends on the facts alleged and the veracity of the supporting links.

#216 truth-teller on 04.17.13 at 11:03 pm

In a debt based economy, if you don’t have a constant increase in borrowing, and if you don’t have a constant increase in the amount of debt that consumers are willing to take on, then the economy contracts. That’s what we are dealing with here.

#217 drydock on 04.18.13 at 9:38 am

# 42 Tiggertoo

As the saying goes ” Buy the dips. “

#218 Rabbit-One on 04.18.13 at 10:56 am

Speaking of principal residence fraud, I personally know more than 2 families from China, each family membeers owned one R/E property and sold as “Principal Residence”, tax free.

You know how they could do this?

Women don’t change their last name in their cultire, so,
2 in-laws, you, your wife, your mom have all different last names, CRA don’t seem check seller’s marital status, etc, all those info.

I am in B.C. of course.

#219 beezlebub on 04.19.13 at 8:40 am

Mark CA Toronto on 04.17.13 at 7:53 am

I am CA in Toronto who specializes in Tax. I have a a school teacher \ Mom client who bought a Condo 6 years ago and sold it shortly after it was registered. She got reassessed by the CRA who is trying to tax the gain at full rates on account of Income and not even as a Capital Gain. I’m fighting the Reassessment for her as she has a somewhat good case in that she didn’t have a previous Principal Residence and she actually moved into the Condo for a short 3 months and can prove it. We’ll see what happens.

Sounds like you will lose. — Garth

You will lose! … 3months ha! Lots of jurisprudence on principal residence.

The Courts have determined that each fact scenario determines whether the property was “ordinary inhabited as a principal residence” versus used as short term occupancy or a even as a “hotel”.