We've started a daily newspaper to keep our friends and clients apprised of the latest in North Shore, Vancouver, and Real Estate News. 

http://paper.li/JasmineKBotto/1344624212

Click the above link to catch up with The Botto Team! 

Click the picture to see more photos and video! 

Jake and Elwood had all the kids in the audience (and some adults) on their feet last Friday night! Click this picture to see the complete album! 

The Matinee put on an amazing show last Friday! Click the picture below for the complete album - video to come! 

This Friday, July 27th The Matinee will be rocking Lynn Valley Village for one night only! A truly fantastic local band, with infectious songs and great stage presence, this is not  a show to be missed! Come out at 7:00PM to catch a FREE show and dance the night away with friends and family! 

This Friday, July 20th come down to Lynn Valley Village to see a great performance by Gary Comeau and the Voodoo Allstars! 

Playing a wide range of instruments - from fiddle to piano, Gary Comeau is sure to make you feel like you've been transported to New Orleans in the middle of Mardi Gras!

Click Here for pictures of Live in Lynn Valley 2012!  

Smith and Jones put on an amazing live show and there was a great turnout of young and old! The weather was perfect, the patio at Brown's Social House was packed, and the BOTTO team was thrilled to be a part of it! 

For more pictures of this event, CLICK HERE. 

The Adam Woodall Band was a great way to start things off last week, and now we're looking forward to Smith and Jone tonight! 

Click Here for more pictures from the first night of Live in Lynn Valley Village! 

This Friday July 13th, country musicians Smith and Jones will be putting on a great live show as part of Live in Lynn Valley Village. The show is free for everyone and will last from 7:00 - 9:00. There is sun in the forecast and this is sure to be a fun show! 

For a full schedule of concert listings and to get to know the upcoming performers, click here! 

 LIVE IN LYNN VALLEY VILLAGE

Presented by

Another year of Live in Lynn Valley Village has finished and it was a GREAT year! We're so proud to be part of an event like this and to see this community come together every Friday evening. Thanks to our cosponsors at Delany's Coffee and Vancity, as well as all the nightly sponsors from this year. If you missed any of the performances, or want to see pictures and video highlights, follow the link below! 

See you next year! 

To View Photos of Live in Lynn Valley

Village 2012 - click here!!

              Follow @linds_bottoteam             Tweet #liveinlynnvalley         Tweet

Dont know where Lynn Valley Village is? 

Take Exit 19 (Lynn Valley Road) off Highway 1, and follow Lynn Valley Road straight to the village! 

Lynn Valley Village

Lynn Valley Village Merchants 

• Beach Tanning Studio
   
• Booster Juice
   
• Browns Socialhouse
   
• Canyon Dental & Laser Skin Care
   
• Canopy Integrated Health
   
• Delany's Coffee House
   
• Jane Thornthwaite, MLA
   
• Lynn Valley Optometry
   
• Mani's Alterations
   
• Mountain Sushi
   
• North Vancouver Public Library
   
• Nourish Market
   
• Papa John's Pizza
   
• Dr. John Pereverzoff, Chiropractor
   
• Red Tulip Gift Gallery
   
• Sugar & Co.
   
• Town Centre Dental
   
• Van Pet
   
• Vancity
   
• Village Barber
   
• Y Yoga
   
• Zazou Salon & Spa
   
   

Photos from Live in Lynn Valley 2011

Photos from Live in Lynn Valley 2010

By David Larock

Last week federal finance minister Jim Flaherty surprised real estate market stakeholders by announcing a fourth round of changes to the rules that are used to qualify borrowers who have less than 20 per cent equity in their property (commonly referred to as high-ratio borrowers).

You would have thought that Mr. Flaherty was announcing the arrival of the Four Horsemen of the Apocalypse when reading the reactions of most mortgage industry insiders, which I find surprising given that the first three rounds of rule changes did not broadside our real estate markets, as had been predicted each time, and have in fact proven quite prescient in hindsight.

Let’s quickly review how we got to this point:

Ultra-low mortgage rates have been the primary drivers of house-price appreciation across most Canadian real estate markets over the last several years. At first this cause-and-effect helped our economy when it was otherwise vulnerable, by stimulating demand in a wide range of housing-related industries. But while emergency-level borrowing rates can provide an effective short-term economic boost, if rates are left too low for too long they can also fuel asset bubbles (history provides many precedents on this point – and those who do not learn from history are doomed to repeat it).

Our political leaders and regulators have been grappling with a very difficult question for some time now: How do we keep our interest rates at the stimulative levels that our broader economy still desperately needs while guarding against credit and housing bubbles? Each time the answer has been the same: Tighten mortgage lending rules, give the market time to adjust and then tighten again if needed.

Over the past few months our leaders have (at long last) come around to the view that our interest rates are going to stay low for the foreseeable future and that if rising rates aren’t going to slow the market naturally (as was previously hoped), more tightening is needed.

Here are the changes that were just announced and that will take effect on July 9 (with my comments following each bullet point):

* The maximum amortization on a high-ratio mortgage will be reduced from 30 years to 25 years.

Mathematically, this change has the same impact on mortgage affordability as a .95 per cent rise in interest rates. That said, while 40 per cent of high-ratio borrowers opted for a 30-year amortization over the last year, the vast majority of these borrowers could have qualified using a 25-year amortization anyway, so this change should only affect marginal borrowers who would have been the most vulnerable to rate rises in future. (If Mr. Flaherty had asked me, I would have suggested lowering the maximum amortization on the rate used to qualify borrowers instead. This tweak would have allowed high-ratio borrowers to set their minimum mortgage payment using a 30-year amortization as long as they could qualify using a 25-year amortization…but I digress.)

There is also an inherent benefit in making this change at this time, which industry observers have not acknowledged. Looking ahead, when mortgage rates eventually do rise, the maximum amortization threshold can be increased back to 30 years to help cushion the impact of higher borrowing costs. This gives the federal government the option of using an incremental payment shock absorber at some critical future point.

* Mortgage refinancings will now be limited to a maximum of 80 per cent of the value of a property (down from 85 per cent).Rapidly rising house prices create a wealth effect that allows homeowners to live beyond their means. While only a minority succumb to this temptation, at the margin these home owners form a large enough group to threaten the stability of our real estate markets and, left unchecked, even our overall financial system.

These borrowers typically rack up high-interest unsecured debt and when it becomes unmanageable, they roll it into their mortgage at today’s record-low rates. They wash, rinse and repeat until house prices stop rising and then when they can no longer access new money this way…boom goes the dynamite.

The decision to stop offering high-ratio mortgage insurance on refinance transactions is an attempt to reign in the conversion of credit-card debt into mortgage debt. This practice was commonplace during the U.S. housing bubble run-up and exponentially increased the long-term damage done to the U.S. economy when real estate prices corrected. Home equity extraction has been steadily rising in Canada over the last decade and the federal government is wise to take steps to limit the potential damage it can cause.

The overwhelming majority of my mortgage industry colleagues feel that credit-card debt, not mortgage debt, is the real problem that the federal government must address. This view is either naïve, blindly self-interested or both. Our industry has been abetting the growth of credit-card debt by converting it to mortgage debt.

High-ratio mortgages are subject to greater regulation because the risk on these instruments is taken by the federal government and ultimately, by Canadian taxpayers. The risk on credit-card debt, on the other hand, is taken by individual credit-granting institutions. That means that if over-consuming borrowers default on their credit-card debt the negative impact is essentially limited to the borrower and the lender, while a material increase in mortgage defaults can send shock waves throughout the economy (see the current U.S. example, where it is mortgage defaults, not credit-card write-offs, that have created Depression-like conditions).

Put another way, if you ask any regulator whether they would rather have credit-card defaults or mortgage defaults, you won’t have to wait long for the answer.

* High-ratio mortgage insurance will no longer be offered on properties valued at over $1 million.

History has shown that high-value properties are subject to greater price fluctuations when real estate markets soften and as such, highly leveraged high-end properties come with an inherently higher level of risk. Requiring a minimum down payment of 20 per cent is a way to help mitigate this increased marginal risk.

From a mortgage-industry perspective, this change gives balance-sheet lenders (large banks) an increased competitive advantage over lenders who need mortgage default insurance to securitize their loans. That means that high-end borrowers (and the mortgage planners who work with them) will now have fewer lenders to choose from. In spite of this, it is still seems to be the right thing to do in an environment where many inter-related risks appear elevated.

* The maximum gross debt service ratio will be limited to 39 per cent and the maximum total debt service ratios will remain at 44 per cent.

Until now, high-ratio borrowers with excellent credit scores could have their gross debt service ratios waived altogether. This has meant that their mortgage and other basic property costs could total 44 per cent of their gross income if they had no other debt. Now their mortgage and other basic property costs will be capped at 39 per cent, regardless of whether they have any other debt, and that slightly reduces the maximum mortgage amount for the relatively small sub-group of borrowers who have no other debt.

The two most common questions being asked regarding the coming changes are:

* How will this affect my existing mortgage at renewal?

Answer: Not at all. As long as you don’t need to borrow more money, your existing mortgage terms will remain in place, even if you switch lenders at renewal.

* How does this affect my existing pre-approval?

Answer: Pre-approvals that do not become live deals before July 9 will be subject to the new rules beyond that date; if, on the other hand, you have an accepted offer to purchase and you convert your pre-approval to a live deal before July 9, your high-ratio mortgage will not be subject to the most recent changes.

If you have other questions, you can check out this question and answer page on the Department of Finance website, or email me for more details.

Five-year Government of Canada bond yields rose 12 basis points last week, closing at 1.31 per cent on Friday. Despite this rise, lenders are still enjoying healthy gross spreads on five-year fixed-rate mortgages in the 3.09 per cent range. We also saw the launch of some new promotions on shorter-term fixed rates and this wider-than-normal variance at the short end of the interest-rate curve means that borrowers who shop around will be well rewarded for their effort.

Five-year variable rates are still being offered at only a shade below fixed rates (2.80 per cent vs. 3.09 per cent) and as such, I don’t think they offer borrowers enough of a margin of safety to justify their inherent risk.

The bottom line: There is an understandable fear that over-tightening mortgage rules will engineer the very house-price correction we seek to avoid but under tightening could eventually prove even more disastrous (and no one has more to lose than people who depend on a healthy real estate market to make their living).

The first three rounds of changes were initially unpopular but all have thus far proven to be prudent with the passage of time. While I am instinctively skeptical of government intervention in the market, Flaherty has so far consistently earned my respect where changing mortgage regulations are concerned. If this short-term pain helps to preserve our long-term gains, then I’m all for it.

David Larock MBA, AMP, PFPC, CSC is a Toronto-based independent mortgage planner and long-time industry insider who specializes in helping clients purchase, refinance or renew their mortgages. He is an active blogger on mortgage related topics and his posts have been distributed in national media and by Realtors and financial planners. www.integratedmortgageplanners.com.

It’s property tax time

By now home owners and businesses throughout the province have received their annual property tax notices in the mail. Property taxes are due July 3, 2012.

Property owners who haven’t received a tax notice, should contact their municipal finance department and arrange for a duplicate notice. Property owners are responsible for ensuring that the local government and BC Assessment have your correct mailing address. Property owners must pay property taxes whether or not they receive a notice.

What taxes do property owners pay?

Take a close look at a property tax notice. About 50% of the amount owing is levied by the local municipality. Municipalities are also required to collect the remainder for other taxing authorities and have no control over these levies. Here is a summary:

Municipal tax – is set by council and staff in the municipality’s annual budget process. It’s based on revenue needs for infrastructure and services.

Regional district tax – is set by the regional districts for services such as regional water and sewage treatment. For example, Metro Vancouver tells their municipal governments what their revenue needs are, and the municipalities collect on their behalf. In rural areas, the province (Surveyor of Taxes) collects for regional districts.

School tax – is set by the BC government to fund schools. Residential rates vary by school district. School taxes are paid by residential and non-residential property owners.

Hospital tax – is set by the regional hospital district to help fund local health facilities. For example, Metro Vancouver hospitals are funded by the province, not by property taxes. Outside Metro Vancouver, hospital taxes are still levied.

Other taxes – are set by local taxing authorities and collected by the municipality to fund BC Assessment, the Municipal Finance Authority of BC and TransLink.

For questions about taxes levied by other taxing authorities, contact:

• BC Assessment Authority, 604.241.1361
• Greater Vancouver Transportation Authority (TransLink), 604.453.4000
• Metro Vancouver, 604.432.6200
• Municipal Finance Authority, 250.383.1181 (Victoria)
• School Taxes, 250.590.0239, (Ministry of Finance, Victoria)

Avoid late payment penalties

Property owners must pay their taxes by July 3, 2012 or there is a 5% penalty. Property taxpayers who don’t pay by September 4, 2012, face an additional 5% penalty. Property owners failing to pay for three consecutive years, could forfeit their property to tax sale. Information about tax sale dates can be found on local government websites.

The upside of property taxes

Property taxes help fund a range of local capital projects and services, including:

• Animal control and shelters
• Archives/libraries/museums
• Bicycle lanes/paths/walkways
• Building regulation
• Community centres
• Energy efficiency upgrades
• Environmental protection
• Garbage and recycling
• Heritage planning
• Local road maintenance
• Parks/trails/green space
• Police/fire/emergency services
• Safe drinking water
• Sewage treatment
• Sidewalks
• Swimming pools/tennis courts/skating rinks/playing fields

A helping hand - the Home Owner Grant

Since 1957, the BC government’s Home Owner Grant program has helped reduce residential property taxes for qualifying home owners. Eligibility requirements restrict the grant to Canadian citizens and landed immigrants who are permanent residents, and whose home is their principal residence.

Types of Home Owner Grants

There are four categories of grants:

1. Basic Home Owner Grant

This is a grant of up to $570 for qualifying home owners. For 2012, the Basic Grant is reduced by $5 for each $1,000 of assessed value over $1,285,000, and is eliminated on homes assessed at $1,399,000 or more.

2. Additional Home Owner Grant

This is an additional grant of up to $275 for qualifying home owners age 65+, disabled persons or veterans, bringing the total Basic and Additional Grant amounts up to $845. The Additional Grant is eliminated on homes assessed at $1,454,000 or more.

For the Basic and the Additional Grants, spouses living together (married, common-law or same gender) can qualify for a grant on only one principal residence each year.

Spouses living apart can each claim a grant on their principal residence provided they have a written separation agreement or a court order recognizing their separation.

3. Multiple Home Owner Grant

Property owners jointly owning a home must decide who is paying the property taxes to avoid paying twice. 
Even if all owners live in the home as a principal residence, only one Home Owner Grant can be claimed.

Shareholders of a corporation or members of a housing cooperative or housing society that owns an apartment building, housing cooperative buildings or housing society buildings may also be eligible to claim the Home Owner Grant.

The corporation, cooperative or society applies for grants for all eligible properties or units in a complex and passes the grant benefit to qualifying occupants. An eligible property may include:

• land shown as a separate taxable parcel on a tax roll that has a taxable improvement;
• a building containing at least two apartment units, each occupied by an eligible occupant;
• eligible land cooperative residence; and
• a multi-dwelling leased parcel with two or more residences on it.

4. Retroactive Home Owner Grant

For qualifying home owners, a retroactive grant may be approved for the previous year only. Home owners must:

• apply in writing for an extension on or after January 1 and before December 31 in the year following the year the owner did not apply for the grant; and
• complete an application form with documentation supporting residency and reasons for missing the deadline.

Applications must be made to the Municipal Tax Collector or to the Surveyor of Taxes if the property is in a rural area.

For eligibility criteria visit: www.sbr.gov.bc.ca and in the search box enter Home Owner Grant and then go to Retroactive Grant.

Two supplemental Home Owner Grant programs

1. Home Owner Grant Low-Income Grant Supplement

This program is aimed at qualifying low-income owners of homes assessed at more than $1,285,000 (for the 2012 tax year). Home owners must:

• be Canadian citizens or permanent residents;
• live in the home as their principal residence;
• have a maximum annual income of $32,000; and
• be 65+ years of age or a veteran, veteran’s spouse or widow/widower receiving veterans benefits, or a person with a disability; or have a dependent child.

The supplement is up to $845 in the Lower Mainland and up to $1,045 in northern and rural areas.

2. Home Owner Grant Veterans Supplement

This program is provided to qualifying low-income veterans who are not eligible for the Additional Grant. Veterans must:

• be Canadian citizens or permanent residents;
• be under the age of 65;
• live in the home as their principal residence; and
• have a maximum annual income of $32,000.

The grant is the difference between the Basic Grant ($570) and the Additional Grant ($275) to a maximum of $275.

For information, go to www.fin.gov.bc.ca and enter Home Owner Grant Supplement programs in the search box. 
Note: The Home Owner Grant does not apply to second homes, summer cottages or rental properties. Further information is available from the Home Owner Grant Explanatory Notes section on the back of the tax notice.

How are property taxes determined?

Property taxes are determined by municipal councils to meet their funding needs. The BC Local Government Act prohibits municipalities from running deficits. So if costs or services increase, municipalities must raise taxes and/or fees to meet costs.

Costs may increase for a number of reasons including inflation, additional required services such as fire or police or libraries, higher energy costs, new programs and even rising wages.

Property taxes are calculated through a formula that takes into account the assessed value of property as determined by BC Assessment, and the rate for the property class type.

For detailed information on how the municipality calculates taxes, contact your local municipality.

Graph Note: Does not include user charges for utilities such as sewer, water, recycling and garbage or school taxes. These increases are for the whole tax program and may not represent the tax change for any individual property.

Deferring taxes

Property owners unable to pay their property taxes on their principal residence may be eligible for assistance under the BC Property Tax Deferment Program.

This provincial low-interest loan program allows qualifying property owners to defer all or part of their property taxes on their principal residence.

1. Regular Deferment 55 & older, surviving spouse, person with a disability

To be eligible, property owners must be 55+ years or a surviving spouse, or a disabled person who is also a Canadian citizen or a permanent resident, and who meet four requirements:

• maintains a minimum equity of 25% of the current assessed value as determined by BC Assessment;
• has lived in BC for at least one year;
• occupies the home as a principal residence; and
• maintains fire insurance on the home.

2. Families with children deferment program

Property owners may qualify if they’re financially supporting a dependent child under age 18 and who have at least 15% equity in their home which is their principal residence. They must also be a Canadian citizen or permanent resident who has lived in BC for a least one year.

Qualifying property owners can defer their property taxes as long as they own and live in their home. They cannot defer utility charges, penalties, interest or user fees.

If a property owner plans to refinance, the lender may require full repayment of deferred taxes. Property owners can repay all or part of the deferred taxes and interest at any time without penalty.

The BC government pays the municipal all property taxes. Deferred taxes and interest must be repaid before a property can be legally transferred to a new owner, other than to a surviving spouse upon the death of the agreement holder(s).

For information visit: www.sbr.gov.bc.ca and in the search box enter Property Tax Deferment Program.

For New Home Owners

If a new home owner didn’t get a tax notice or the notice has the previous owner’s name on it, the new owner should:

1. Contact the BC Land Title and Survey Authority for a Certificate of Title to prove ownership and then complete the Home Owner Grant application. The Lower Mainland office phone number is: 604.660.0380.
2. Phone or visit the local City Hall Taxation Office and request a duplicate tax bill.

The property taxes must be paid and the grant claimed, if eligible, by the due date to avoid late penalties.

Property tax notice explained

1. Owners’ Name and Address – All owners’ names appear. If there is more than one owner, then each name is listed. Where a single notice was mailed in the past, now each owner receives a copy.
2. Folio Number – A unique property identification number belonging to the property and not the owner.
3. Access – A code used to epost™ tax payments or to apply for the online Home Owner Grant.
4. Legal Description – Written method to delineate a specific property under the land title system.
5. Total Net Assessed Value for Taxation Purposes – BC Assessment’s classification of property, e.g. residential, business, farm, and the assessed values for different tax purposes.
6. PID – Parcel identifier used to cross reference to Land Title and BC Assessment.
7. Net School Taxes – Total school taxes after the Home Owner Grant is deducted.
8. BC Assessment – Funds BC Assessment operations.
9. TransLink – Funds TransLink.
10. Regional District – Funds shared operations and services such as sewer and water provided by Metro Vancouver.
11. Municipal Finance Authority – Funds the Municipal Finance Authority which provides capital financing and financial services to local governments.
12. Total Other Levies – Total owing to other taxing authorities.
13. City Services – The “municipal tax.”
14. Police Services – Funds policing.
15. Asset Renewal Levy – Funds collected to cover the replacement of aging city assets.
16. Firehall Replacement Levy – Funds fire services.
17. Storm Drainage – Funds local storm drainage.
18. Net Municipal Levies – Municipal tax less any unused Home Owner Grant.
19. Tax Prepayment Adjustments – Total tax installments made.
20. Total Outstanding Taxes – What you owe.