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Building a Better Condominium Act

Archived News Release

McGuinty Government to Launch Condo Review Consultation

Ministry of Consumer Services

 

  • Ontario is taking steps to modernize the Condominium Act, 1998, so it reflects the current and
  • future needs of owners, residents and other stakeholders in the condominium community.
  • In an effort to respond to a booming and evolving industry, Ontario will launch a public
  • consultation to identify a comprehensive set of issues, and long-term solutions relating
  • to matters such as:
  • consumer protection for buyers
  • condominium finances and reserve fund management
  • condominium board governance
  • expertise/accreditation of condominium managers
  • dispute resolution, for instance between condo boards and owners
  •  
  • The review will directly engage the entire condominium community, including owners, residents,
  • developers and property managers.  Members of the condominium community will have the
  • opportunity to speak about their issues, hear the concerns of others and work together to
  • develop solutions.  Details of the public engagement process and information about how to
  • participate will be announced this summer.  Strengthening the Condominium Act is part of
  • the McGuinty government's plan to ensure a fair marketplace for Ontario families.

 

Quick Facts

  • Over one million people live in condominiums in Ontario.
  • There are about 525,000 condominium units in Ontario.
  • Toronto had the fastest growing high-rise condo market in North America in 2011.
  • About 50% of new home sales in Ontario are condominiums; 60% of homes sold in the GTA.

 

Quotes

“This promising and thorough engagement process will be a first for the North

American condo market.  It will ensure the diverse range of stakeholders, including

over one million condo dwellers in Ontario,  are involved in both identifying

the issues and defining solutions that meet our needs today and in the future.”

Margarett Best

Minister of Consumer Services

“As the association representing professionalism in this rapidly growing

industry, ACMO is excited to be a part of a new consultative process

for the review of the Condominium Act that includes all stakeholders.

We look forward to working with the Government on changes that will provide

consumers with important protections and ensure that Ontario remains

the leader in the condominium industry in North America.”

Dean McCabe

President, Association of Condominium Managers of Ontario (ACMO)

“The Canadian Condominium Institute - Toronto and Area Chapter

is pleased that the Ontario government has officially announced

the opening of the Condominium Act, 1998 for a complete review. We

congratulate the government for approaching it in a new and innovative

way which will allow those who are most affected by the legislation

to help decide its future, and look

forward to continuing to work with the government so the best 

legislation possible is created.”

Bill Thompson

President, Canadian Condominium Institute (Toronto and Area Chapter)

“The Condo Owners Association is thrilled that the McGuinty Government

is launching a review of the Condominium Act. We are looking forward

to participating in the review to help build a viable and sustainable

future for condominiums in Ontario that protects the rights of

owners, ensures best practices for condo corporations, and preserves the value

of the investment people have made in their homes.”

Linda Pinizzotto

President and Founder, Condo Owners Association Ontario (COA)

 

Media Contacts

  • Bryan Leblanc  Minister's Office  This email address is being protected from spambots. You need JavaScript enabled to view it.

    416-326-1939

  • Sandra Bento  Media Relations  This email address is being protected from spambots. You need JavaScript enabled to view it.

    416-327-9708

 This document was published on June 08, 2012 and is provided for archival and research purposes.

Published in About Condo Act

Seniors need assistance; in particular to the availability of answers to questions they may have and/or a support system geared to Seniors in condominiums. Many Seniors, especially those with a chronic condition may be in their units and not have a support system in the event of a serious alert of medical issues.

 

Seniors over the age of 65 are the fastest growing users of the internet.   The internet helps them to keep in touch with their family and friends and day-to-day activity such as banking and obtaining information on health related questions.  At the present time there is a digital consumer application called Mi-health which helps individuals to take better control of their health but it will not help in emergency situations in Condominiums. Ideally with the growing popularity of medic alert devices consideration should be taken by Builders and our Ministry of Health to implement a specific device for emergency situations in Condominiums both for Seniors and other Condo Dwellers. At present there are no Health and Safety Mandates in Condominiums defined in the Condo Act.

 

The Ministry of Consumers Services has been approached by COA - Condo Owners Association to take into account the various Ministry's to ensure that all aspects relating to proper governance, health and safety and proper Municipal regulations be reviewed and recommendations be brought forward. The recommendations would be geared to specific relating to the operations of a Condominium. Example: Health and Safety Mandates for spas and swimming pools; specific guidelines relating to Hoarders as a Health issue.

 

Each Condo had to confirm compliance with the AODA - Accessibility for Ontarians with Disabilities Act however the Government almost missed the boat with Condominiums when they recently mandated new guidelines as of JANUARY 2012 enforcing up to a $50,000 per day or part day for Directors and Officers, and fines of up to $100,000 per day for Corporations not in compliance with the AODA. A Condo Corporation does fall under the AODA for compliance therefore recognizing a higher possibility of Seniors in Condominiums who may require assistance It is a growing concern and the Condo Review process should be including the entire situation of Seniors in Condominiums and also recognize the implementation of stronger guidelines relating to the AODA

 

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<h4><span style="color: #333399;"><span style="font-size: large;"><span style="font-size: small;"><span style="font-family: tahoma,arial,helvetica,sans-serif;">CONDO OWNERS REGISTER FOR FREE </span></span></span></span><span style="color: #333399;"><span style="font-size: large;"><span style="font-size: small;"><span style="font-family: tahoma,arial,helvetica,sans-serif;">(extended til March 1, 2013) </span></span></span></span></h4>
<p><span style="color: #800000;"><strong><span style="color: #000080;">If you are a Condo Owner</span> -  <a href="/component/comprofiler/registers">CLICK TO REGISTER WITH COA    (</a></strong><span style="font-size: large;"><span style="font-size: small;"><span style="font-family: tahoma,arial,helvetica,sans-serif;">  24 - 48 hour approval) </span></span></span></span></p>
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Published in How COA Helps

Investor Information in a National Post article

 

Get ready condo flippers, Canada Revenue Agency is hunting you

National Post | Garry Marr | 13/04/20 | Last Updated: 13/04/19 2:23 PM ET

 

You just sold your condo, you made a hefty profit and know you have to pay your taxes.

The bill might be more than you think.

If it’s your principle residence, there’s no tax, as long as you have the paperwork to prove it. The Canada Revenue Agency is taking a closer look at the condominium sector in what some in the industry have dubbed the “Condo Project.”

Even if you own up to it being an investment property, you may not be allowed the capital gains tax break and that means a bigger hunk of your profit going to Ottawa.

Let’s say your gain is $100,000 and your tax bracket is 46%. Capital gains are taxed at 50% so you would only owe $23,000 on that profit.

Not so fast! If the CRA says you are in the business of flipping condominiums, get ready to pay based on the gain being counted as income for a tax bill of twice the amount at $46,000. And, it gets worse. You could also face a fine of up to 50% of the tax owed for making a false disclosure.

With the deadline for filing taxes coming up April 30, you might want to think very carefully about how you record that housing sale you made in 2012.

Sam Papadopoulous, senior public affairs advisor-manager with CRA’s Ontario region, acknowledges that the strength of the condo sector has attracted the attention of the taxman.

“We do from time to time target some sectors more closely than others,” he said. “We look at the real estate market in general. Of course, [there is more focus], it’s a hot market.”

People in the industry have a different view.

Some suggest it fits in with the recent budget when Jim Flaherty, the finance minister, announced his government was taking a closer look at loopholes and tax cheats — hoping to shrink its deficit in the process.

One of the issues attracting the attention of the CRA is assignment clauses, where one person agrees to purchase a condo before it is built but ultimately sells his or her right to buy that condo before the building is even registered.

Builders usually collect a fee for that privilege but ultimately when title is registered at the land registry office the original purchaser’s name is nowhere to be found.

While most builders are unlikely to voluntarily supply a list of properties in their building that were assigned, they could be forced to cough it up if they are audited by the CRA.

Those people who have assigned their units to another buyer are going to be hard pressed to prove they planned to use the unit as an investment property rather just flipping — meaning the CRA is highly unlikely to allow them to count money made at the lower capital gains rate.

“If you keep [assigning property] then it is not capital gains, that’s trade and that’s income,” said Mr. Papadopoulous, adding you do it a “couple of times” and it’s income. “Of course, that’s part of [what they are investigating].”

The warning to people flipping property and thinking they can get away without reporting the gain is pretty clear.

“We live in the information technology age,” said Mr. Papadopoulous, who wouldn’t get into how CRA is tracking down the tax evaders. “We are putting our resources to work and following the trail where we can.”

David Chodikoff, a tax lawyer and partner at Miller Thomson, said he’s seen the CRA go after people who have been living in a property and still question it as a principal residence.

CRA starts with a letter to a taxpayer asking them for details about when and why they sold their property and people often fill out the questionnaire without legal advice.

The issue goes all the way back to 1971 when there was no tax at all on capital gains so everybody tried to avoid counting gains as income.

Mr. Chodikoff says the distinction between income and capital is as simple as the difference between a tree and the fruit that it bears.

“The tree is capital and it produces a fruit and the income is the profit that is derived when that fruit is sold,” he says.

If your condo is that tree and your rental income is the fruit and you make a profit from that rental income, that’s taxed as full income. You eventually sell the tree for more money and that’s just a capital gain, taxed at the 50% rate.

If your entire businesses is just trading trees and not producing fruit, that’s business income.

“The Income Tax Act asks what was your intention when you bought that condo,” said Mr. Chodikoff. “These principles are easy to describe but harder to prove in fact.”

The law is like a civil case, a judge doesn’t have to believe you beyond a reasonable doubt, but a judge does have to conclude you are more believable than the CRA.

“We have to bring all kinds of intrinsic evidence,” says Mr. Chodikoff, noting some clients will produce something as simple as a change in address on their driver’s licence to show they were using their condo as a principal residence.

If you never actually moved into the condo, it’s going to be tough to prove that it was principal residence.

You may never have produced income from the profit but that’s not to say you didn’t plan to, so perhaps you could get the capital gains exemption.

“The question can be ‘how did they come to sell the property,’” said Mr. Chodikoff, adding the CRA might look at whether you were advertising the property for sale.

Brian Johnston, chief operating officer of Mattamy Corp., says the CRA has ways to get information on sales.

“They audit real estate companies, look at the name on the contract and look at the final deed and see a difference,” said Mr. Johnston. “They see Bill Smith bought it and Joe Blow is on the deed. They want to know how this happened and follow the paper trail.”

He has some sympathy for consumers confused about the whole process.

“I think the government should make it a little simpler in terms of filing for principle residence exemption,” said Mr. Johnston. “It’s a real gray area of the law. The government has not done a good job for Canadians trying to specifically identify all the rules around [selling homes and paying taxes]. People might have inadvertently made mistakes.”

Condominium developer Bard Lamb, who has been audited several times, said ultimately it’s better to be more conservative when you’re filing — meaning just count the gain as income if you are in doubt.

“If you are prolific buyer or seller of properties, whether it’s condos or not, you have to govern yourself accordingly. If you don’t, you’ll get caught and be fined,” said Mr. Lamb. “I decided many years ago when I started buying condominiums, after talking with my accountant, you can pay [lower tax] or you can fight 50 years with Revenue Canada.”     http://business.financialpost.com/2013/04/20/get-ready-to-pay-income-tax-on-your-condo-profit/

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Published in Buying a Condo