What’s New? Effective April 19, 2010, the following changes will apply based on changes announced by the Department of Finance earlier this year:                 Changes to Qualifying Interest Rate                 Changes to Loan to Value (LTV)                 Changes Related to Rental Properties                 Changes to Insured Second Home Criteria

Products                 CIBC Mortgages                 FirstLine Mortgages®                 President’s Choice Financial® Mortgages

Details Changes to Qualifying Interest Rate                 Applicable to both insured and conventional mortgages including FirstLine Matrix Mortgage SuiteTM, ACCESS Mortgage® and PCF Secured Borrowing Account (SBA). Mortgage Type Qualifying Rate Fixed rate mortgages with a term less than 5 years Greater of MQR* or Contract Rate All variable rate mortgages Greater of MQR* or Contract Rate Fixed rate mortgages with a term 5 years or greater Contract Rate Note: 1) For the FirstLine Matrix Mortgage Suite, the loan portion will be qualified based on the criteria as set out above and the line of credit portion will be qualified at the Mortgage Qualifying Rate (MQR). 2) For the PCF Secured Borrowing Account, the qualifying rate is the Secured Qualifying Rate (SQR). 3) The *‘MQR’ or ‘SQR’ is defined as the Chartered Bank-Conventional Mortgage 5 year rate that is the most recent interest rate published by the Bank of Canada every Wednesday and can be found by clicking on the following link http://www.bankofcanada.ca/en/rates/interest-look.html and then clicking the tick box “V121764” – 5 year mortgage rate within the “Conventional mortgage” section. 4) The Contract Rate includes any discretionary pricing. 5) Applications dated before April 19, 2010 will continue to be adjudicated based on the old rules provided the borrower has a legally binding purchase and sale agreement that’s also dated before April 19, 2010. Changes to Loan to Value (LTV) Insured Mortgages New LTV Effective April 19 Refinances (ETO) 90% LTV    Non-Owner Occupied Rental 80% LTVperties LTV Prior to April 19                                         95% LTV                                                95% LTV

 

Total Debt Service Ratio for Insured Refinance Mortgages:                 The maximum TDSR for insured refinance mortgages is limited to 42% from previous tier system based on bureau scores. Changes related to non-owner occupied rental properties and owner occupied properties with a rental component Conventional Mortgages – non-owner occupied rental properties where the borrower does not own more than 2 rental properties                 50% of the gross rental income can still be added to the Gross Annual Income.                 The option to deduct 30% of the gross rental income from the PITH has been eliminated.                 Revised acceptable calculation: PITH* (subject property) + other debts service costs + PITH (any other rental properties) Gross Annual Income + 50% of Gross Rental Income (from subject property and any other rental properties) Conventional Mortgages – owner occupied properties with a rental component                 50% of the gross rental income can now be added to the Gross Annual Income (previously 80% of the gross rental income could be added to the Gross Annual Income).                 The option to deduct 30% of the gross rental income from the PITH has been eliminated.                 Revised acceptable calculation: PITH* (subject property) + other debts service costs + PITH (any other rental properties) Gross Annual Income + 50% of Gross Rental Income (from subject property and any other rental properties) Insured Mortgages – non-owner occupied rental properties and owner occupied properties with a rental component                 The option to deduct 80 % of the gross rental income from the PITH is no longer applicable.                 50% of the gross rental income can now be added to the Gross Annual Income.                 This applies to owner occupied properties with rental component (combination) properties and all rental properties.                 Revised acceptable calculation: PITH* (subject property) + other debts service costs + PITH (any other rental properties) Gross Annual Income + 50% of Gross Rental Income (from subject property and any other rental properties)                 For owner occupied applications with a rental component owner occupancy must be confirmed at the time of application.                 Rental income from all other rental properties is to be treated in the same manner as other non salaried income. Net income must be supported using the average income from the previous two years showing on the borrower’s Notice of Assessment or audited financial statements prepared by a licensed accountant. *PITH means cost of principal, interest, taxes, and heat plus 50% of the condominium fees, and 100% of site ground rent for leasehold. Changes to Insured Second Home Criteria                 Insured second homes must be one unit owner occupied properties. Previously the property could have up to 4 units.                 An insured second home must be owner occupied by the borrower or a relative of the borrower on a rent free basis; owner occupancy must be confirmed at the time of application.

Effective Date April 19, 2010

Any Questions? Please contact Daryl Woodill @ 441-0751

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Sales of Real Property

The HST rate of 15 per cent would generally

apply to a supply of real property by way of

sale in Nova Scotia if both ownership and

possession of the property are transferred to

the purchaser on or after July 1, 2010.

Example 12: In January 2010, a land

developer enters into an agreement to

sell a small commercial mall to an

individual. Ownership and possession of

the mall will transfer to the individual in

August 2010. The HST rate of 15 per

cent would apply to the sale of the mall.

For deemed supplies of real property by way

of sale the general rule is that HST at the

rate of 15 per cent would apply if the

deemed supply is made on or after July 1,

2010. However, this general rule may not

apply for deemed supplies of housing

where the builder makes a sale of new

housing together with leased land. See the

section of this Notice on Grandparenting

for Sales of New Homes.

For information on transitional rules for

commercial leases and non-residential real

property (including transient accommodation),

see the section of this Notice on

Leases and Licences.

Sales of New Homes

Generally, sales of newly constructed or

substantially renovated housing would be

subject to the HST rate of 15 per cent if both

ownership and possession are transferred on

or after July 1, 2010. Where, under a written

agreement of purchase and sale, ownership

or possession of the home is transferred to

the purchaser before July 2010 the HST rate

of 13 per cent would apply. Grandparenting

would be provided for certain contracts —

see the Grandparenting section below.

Rentals of New Homes

Builders of newly constructed or

substantially renovated single-unit homes or

residential condominium units who rent out

the new homes or condominium units — or,

in the case of new traditional apartment

buildings or additions to existing apartment

buildings, the first unit in the building or

addition — would generally be required to

pay the HST rate of 15 per cent under the

self-supply rules if the rental occurs on or

after July 1, 2010. Grandparenting would be

provided for certain contracts — see the

Grandparenting section below.

Where the builder is required to self-assess

HST under the self-supply rules prior to July

2010 the HST rate of 13 per cent would apply.

Grandparenting for Sales of New Homes

A builder’s sale of new or substantially

renovated single-unit homes, duplexes,

mobile homes, floating homes and

residential condominium units would be

grandparented (i.e., not subject to the

increased HST rate) where the written

agreements of purchase and sale are entered

into on or before April 6, 2010 and both

ownership and possession are transferred

under the agreement after June 2010.

Grandparented sales of these homes would

be subject to the HST rate of 13 per cent.

Grandparenting would not apply to sales of

traditional apartment buildings and homes

built or substantially renovated by owners

for their personal use. In the latter case the

transitional rules for tangible personal

property and services would apply to the

acquisition of construction materials and

services used in the house construction or

substantial renovation that straddles July 1,

2010.

Grandparenting would generally not apply

to deemed supplies of real property by way of

sale, including builder-landlords that are

required to self-assess HST under the selfsupply

rules on newly constructed or

substantially renovated housing on or after

July 1, 2010. However, where a builder is

required to self-assess HST under subsection

191(1) of the ETA in respect of an exempt

sale of the building part of a single unit

residential complex or a residential

condominium unit and a supply by way of

lease, or an assignment of a lease, of the

land part of the complex or unit, the rate of

HST payable in respect of the deemed supply

would be determined by the date the

agreement for the purchase and sale of the

building was entered into. Where the

agreement was entered into on or before

April 6, 2010, HST at the rate of 13 per cent

would apply to the deemed supply made by

the builder even if the deemed supply is

made on or after July 1, 2010. Where the

agreement was entered into after April 6,

2010 the general rule for deemed supplies of

real property by way of sale would apply —

i.e., where the deemed supply made by the

builder is made on or after July 1, 2010 HST

at the rate of 15 per cent would apply.

Nova Scotia New Housing Rebates

Administration of the Nova Scotia new

housing rebates would transfer from the

Canada Revenue Agency (CRA) to Service

Nova Scotia and Municipal Relations.

Nova Scotia new housing rebate claims for

sales of new housing together with land,

sales of new housing together with leased

land and houses acquired through the

purchase of qualifying shares of a housing

cooperative would continue to be submitted

to CRA where the written agreement of

purchase and sale for the housing or

shares, as the case may be, is entered into

on or before April 6, 2010. Nova Scotia new

housing rebate claims for owner-built

homes would continue to be submitted to

CRA where the application for the rebate is

filed before July 1, 2010.

Nova Scotia new housing rebate claims for

sales of new housing together with land,

sales of new housing together with leased

land and purchases of qualifying shares of a

housing cooperative would be submitted to

Service Nova Scotia and Municipal Relations

where the written agreement of purchase

and sale for the housing or shares, as the

case may be, is entered into after April 6,

2010. Nova Scotia new housing rebates for

owner-built homes would be submitted to

Service Nova Scotia and Municipal Relations

where the application for the rebate is filed

on or after July 1, 2010.

In addition, for Nova Scotia rebates in

respect of sales of new housing together

with land, sales of new housing together

with leased land and purchases of

qualifying shares of a housing cooperative

where the applicable rebate claims would

be required to be submitted to Service Nova

Scotia and Municipal Relations, the builder

would no longer have the option of paying

or crediting the applicable Nova Scotia new

housing rebate to the purchaser at the time

of purchase. However, builders would

continue to have the option of paying or

crediting the applicable GST new housing

rebate and therefore could continue to price

their sales of new housing net of the

applicable GST new housing rebate for

agreements of purchase and sale entered

into after April 6, 2010.

Where written agreements for the purchase

and sale of housing or qualifying shares are

entered into after April 6, 2010 and the

purchaser of the housing or qualifying shares

would be entitled to claim a Nova Scotia new

housing rebate, the purchaser would be

required to submit their claim to Service

Nova Scotia and Municipal Relations.

Nova Scotia new housing rebate factors for

sales of new housing together with leased

land and sales of qualifying shares of a

housing cooperative would be adjusted to

1.31 per cent to reflect the increase in the

HST to 15 per cent. Rebate forms and other

administrative information will be

provided in the coming months for Nova

Scotia’s new housing rebates.

Builder Disclosure Requirements

for the Transitional Period

If a written agreement of purchase and sale

for a newly constructed or substantially

renovated home is entered into after April

6, 2010 and before July 1, 2010, the builder

would be required to disclose in the written

agreement of purchase and sale whether

the HST rate of 15 per cent would apply to

the sale and, if so, whether the stated price

in the agreement includes the HST rate of

15 per cent, net of the GST new housing

rebate, if applicable.

If the transaction would be subject to the

HST rate of 15 per cent and the builder does

not make a disclosure as outlined above,

the builder would be required to remit

based on a 15 per cent rate of HST. This

proposed transitional measure would help

provide certainty to both builders and

purchasers with respect to the application

of the HST rate increase under written

agreements of purchase and sale for new or

substantially renovated homes entered into

during the transitional period.

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New Construction!!! – $276,500

This wonderful split enrty could be your new home! Located on a quiet cul-de-sac of brand new homes. Super nice hardwood floors gleam throughout the home with the exception of the kitchen and bathrooms that sport ceramic tile. 3 Bedrooms on the main level with a bathroom that features a jacuzzi soaker tub. 1 bedroom in the basement along with a huge recroom and a 4 piece bath. Lots of room to play and grow! Basement also features a laundry room and garage with a walkout. Call Scott Grace @ 441-7714 for more information or for your own personal viewing.

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