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If you are considering Canadian real estate, the decision of whether you want to make a purchase or sale is likely something that you have put a great deal of thought into. You may have heard that there have been several changes to lending practices and taxation. You need to be aware of what these differences are so that you can continue to find the properties and terms that suit you best.

Anyone who is interested in Canada’s property markets needs to be aware of the role that the CMHC plays in financing homes. It has a number of different programs aimed at helping people get into homes. It also provides mortgage insurance and can determine lending policies that are felt across the country.

When you purchase any building, you are required to pay a down payment in order to secure a mortgage. For people who have already built up equity or who have money saved, this is not an issue. However, many first time residence buyers who did not have a down payment were able to secure a mortgage using a no down payment mortgage. This was excellent news for many people and caused a surge in sales. On the surface, it seemed as though these lending decisions were a benefit to the economy.

It led to a real estate boom in Canada. There were similar opportunities in the USA and this led to a huge increase in property sales there as well. Unfortunately, in the States, other factors such as credit history were ignored and many unsuitable individuals were allowed to purchase properties. Many of these ended up going through foreclosure and losing their properties. This is one factor that upset the economy. Therefore, to prevent the same problems from happening here, the CMHC canceled the no down payment program, something which many buyers may still be unaware of.

Another way that home buying was made more affordable was a longer time period in which to pay back the money. Usually the money to buy a home is paid back over a period of twenty or twenty-five years. This was extended and mortgages of up to forty years were available. This lowered the overall monthly payment so that people could afford a better home than otherwise would be possible. The forty year amortization period was also canceled by the CMHC in October of 2008.

Ontario is bringing in taxation changes that will affect the real estate market. In July of 2010, they will be combining the Goods and Services Tax and the Provincial Sales Tax into one Harmonized Sales Tax. This will see an eight percent increase in the cost of items that were previously not subject to the PST. Homes are included. This huge jump in the cost of homes is something that has many real estate analysts worried. It is something to keep in mind if you live in Ontario and are deciding when you want to buy a house.

As you can see, some of these changes may significantly affect your ability to buy or sell a property in Canada. Educating yourself as to the best choices for you and how changes actually affect you may be the only way that you can prevent making costly mistakes that can affect you for years to come.

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