Finances for Your House

Before World War II, far more Canadians were renters than owners. This balance changed in the 1950s. Since the 1980s, when global economics and government priorities changed, many factors have complicated home ownership. CMHC (Canada Mortgage and Housing Corporation) offers current advice in eight languages for renters and owners, especially for newcomers to Canada.

 

Until a few years ago, Halifax was more affordable than other Canadian cities, but that's no longer the case. When you were looking to purchase a house, you were competing not only with other prospective homeowners but with investor buyers who already own a residence elsewhere and who acquire additional properties as investments for profit. This financialization of real estate has been especially hard on people with low incomes, as social housing has become scarce and rental properties have become less affordable. This has led to widespread housing insecurity, an immense problem that needs coordinated analysis and action at all levels. New homeowners in Halifax are in a better position than many others, but purchasing your house may have required some long-term sacrifices.

 

The notes below are for both prospective homeowners and current homeowners.

 

Which factors should I check when considering homeownership?

 

As a general guide, no more than 30% of a family's annual income (before taxes) should go toward accommodation, whether it's for renting or owning. Your current economics may suggest a higher or lower percentage. CMHC compares renting and owning and offers a handy affordability calculator. Annual house expenses are bound to be greater than rental expenses. On the other hand, owning a house (despite a big mortgage) provides some equity that you can sell later, unlike renting.

 

To consider homeownership, you'll need to make a financial plan that forecasts your desires, income, and expenses over the next ten years. CMHC offers guidelines for those who are considering homeownership and for those who have made the decision to proceed. Be cautious with online sources about home ownership in Halifax. Real estate companies offer useful information, but are not impartial, as they represent sellers, not buyers.

 

How can I check the selling prices of houses in Halifax?

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Property Valuation Services provides this information. Do an advanced search for house sales, filtered by location, sales date, assessment value, and/or price range. You can also do a location search for a particular address and then check neighbouring houses by clicking on the map at the bottom of the page.

 

Is there financial assistance for home buyers?

 

Federal and provincial assistance is available, mainly for first-time home buyers.

• The First Home Savings Account (Government of Canada) is a registered tax-free savings account.

• The Home Buyer's Plan (Government of Canada) enables Canadian first-time home buyers to withdraw funds from their Registered Retirement Savings Plan, to be repaid within 15 years.

• The Home Buyer's Amount (Government of Canada) enables first-time homeowners to claim up to $10,000 on their income tax.

• Down Payment Assistance Program (Government of Nova Scotia) is available if you can't afford a 5% down payment.

• First-time Home Buyer's Rebate Program (Government of Nova Scotia) is only for newly built homes.

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How should I approach a mortgage?

 

Before visiting a financial institution, you can use the Canadian government's mortgage qualifier tool to help you compare your income and expenses against the six variables of a mortgage. CMHC also provides tips on planning a mortgage. Before making an offer on a house, you should obtain a pre-approved mortgage from a financial institution, so that you know what you can afford and can proceed with confidence.

 

Which expenses are required when a house is purchased?

 

Closing costs will need to be considered in your budget: around 1.5–4% of the purchase price. They will likely include:

• home inspection fee

• property appraisal fee

• down payment

• mortgage loan insurance (if your down payment is less than 20% of the purchase price)

• property insurance

• deed transfer tax

• recording documents fee

• title insurance or location certificate

• lawyer's fees

• pre-paid property tax adjustment

• pre-paid fuel adjustment

• connection costs (power, internet, etc.)

• moving expenses

• any initial renovations

• any new furniture and appliances

 

How do tenant expenses compare to homeowner expenses?

 

Tenants pay for:

• rent

• insurance for possessions

• some or all utilities (heat, electricity, water)

 

Homeowners pay for:

• mortgage payments

• homeowner's insurance on the property, contents, and liability

• all utilities (heat, electricity, water, wastewater, stormwater)

• property tax

  • this includes supplementary education, fire protection, local transit, climate action

  • assessment is based on your property's market value and physical state

  • you can find a history of assessed values and taxable assessed values for any property at www.pvsc.ca (your property may have an assessment cap that avoids you paying tax on its currently inflated market value)

• maintenance and repairs (1–3% of the house's value per year)

 

If you use a portion of your house for a business, you may be able to claim a portion of your home expenses on your income tax return.

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Is there financial assistance for homeowners?

 

If you need to make minor or major modifications to your house for safety or accessibility, you can check: 

• tax credits from the Canadian government 

• funding programs from the Nova Scotia government

 

If you're thinking of switching your house's heating system to electric heat pumps, you can check for rebates from: 

• Efficiency Nova Scotia

• Natural Resources Canada

Your rebate request must be approved before a contractor starts the work.

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Depending on your income, you may qualify for financial assistance to repair your house:

• Home Repair and Accessibility Program

• Habitat for Humanity Home Preservation

• HomeWarming​​

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Is my property tax negotiable?

 

You'll receive two different notices about your property tax in the mail:

• Property Tax Bill from HRM

  • If you can't afford your property tax, see the note about exemption and deferral on the back of the notice. 

• Property Assessment Notice from Property Valuation Services

  • If you think the assessed value of your property is too high (which would result in higher property tax), see the appeal information on the back of the notice.

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Are there accommodation options other than owning and renting?

 

Freehold and tenancy are the most common models, but your needs and desires may steer you in another direction. All of these options exist in Halifax.

• freehold (you own the building and the land on which it sits)

• leasehold (you own the building but rent the land from someone else)

• tenancy (you rent a building or unit from someone else)

• condominium (you own a unit in a multi-unit building; its board of directors makes decisions about the operation of the whole building)

• co-operative (you are a member of a group that owns, operates, and lives in a building; its board of directors and members make decisions democratically)

• co-housing (you are a member of a community that includes both private homes and communal spaces)

• retirement home (you pay a company for long-term accommodation and services in a building for seniors)

• hotel or hostel (you pay a company for short-term accommodation and services)

• shelter (you are provided with emergency accommodation and services)

• encampment (you pitch a tent in a municipally designated area)

 

Some accommodation options include medical care and assistance.

• hospital (you receive short-term accommodation for medical diagnosis and treatment)

• home care (you live in your home and receive occasional assistance from a visitor)

• long-term care (you live in a care facility due to ongoing needs; this includes nursing homes for 24-hour care and residential care facilities for general assistance)

• respite care (you live temporarily in a long-term care facility while your regular caregiver is unavailable)