PETER REDMAN / NATIONAL POST- VACATION PROPERTY

Assuming our political leaders won’t drag us into a snap election, many Canadians can look forward to leisurely weeks and weekends at their cottages for the rest of the summer.

You have to plan ahead when it comes to passing on the family cottage to your children.
But there are major tax and estate planning issues associated with cottages: the legacy of many earlier decisions by other politicians.

The CIBC has issued a report on strategies to deal with the issues surrounding what it calls the four Cs of summer: the cabin, condo, chalet or cottage.

Jamie Golombek, CIBC’s managing director of tax and estate planning, says the most important tax consideration is the tax-efficient transfer of property between generations. “Poor planning can have costly results and — in extreme cases — may force the sale of a property that has been in the family for generations.”

It’s best to plan things out with a professional advisor before these issues come to a head. To fail to do so is to invite potentially large capital gains tax headaches if vacation properties are gifted or sold to family members, or inherited should the owner pass away.

“If you sell or gift the property while you are alive, you will generally be taxed on the difference between the amount you receive and the adjusted cost base (ACB) or tax cost of the property,” Golombek says. He advises keeping all receipts for improvements because these expenditures can be added to the ACB of the property and reduce the capital gains on disposition.

If property is gifted to a spouse or common-law partner during your lifetime or on death, the property is deemed to be transferred to the other spouse or partner at its ACB and no gain will be immediately reportable.

Parents can give the vacation property to their kids while alive or on their death, but this results in an immediate capital gain if the property has appreciated in value.

The principal residence exemption can shelter gains on your main residence from capital gains tax. However, a principal residence can include a vacation property, even if it’s not where you primarily live as long as you “ordinarily inhabit” it at some point in the year.

I have been getting a few requests for financing information lately and I felt I needed to update potential clients on the state of lending both in Canada and the USA.

I have 100% financing on our website and in days past, this was easy to get. Not now. It is still available in selected, obscure area’s of the U.S. and based on qualifications that Oprah would find hard to qualify for. I will be taking that off soon and updating some Companies that may be able to help you.

In Canada, it is not hard really to get financing for a second/recreational home. I believe CMHC will do a 5% down on a cottage build but your credit needs to excellent and your debt load low. Keep in mind also that getting a favorable appraisal right now (Canada or the USA) is harder than ever. This means that the Bank may not lend as much as you would like. be prepared for a larger cash reserve. I always suggest Canadians go to a Mortgage Broker vs. a Bank as they have allot more Lenders to put your file in front of. Always remember that unless you own a lake lot, land is more valuable with a building on it than not. Will grow faster in equity as well.

As for our potential U.S. clients, boy, pickin’s are slim. There are not allot of choices for you right now for building a new home. Pretty well any lender that will even consider looking at you will not allow you to be an Owner Builder. They are insisting on a Builder assisted build. California has really been hit hard as an area flagged for no lending. I do recommend calling Jacques at www.constructionloans.com (he is in the San Diego area) and is working on some options for clients and can lend in WA and Oregon pretty well without a problem. If you are on the East Coast of the USA, I always recommend contacting Tony at www.buildmax.com I talked with Tony a bit ago and he still has owner builder lending in 9 or so States in the Eastern USA.

I hope this helps and if the Banks actual use the so called “stimulus” funds to actual lend to you, who knows, lending restrictions may be relaxed a bit.

To your persistence and determination!!

Kind Regards,

Larry J Clark

Due to the economic climate and restructuring of our operations, we have decided to centralize all of our production and sales activity to our Facility in High River, Alberta. This facility is on 40 acres of land and has over 11000 square feet of production area and can run 3 lines of framing at one time.

The facility in Abbotsford became redundant and actually competed with the other plant. The sales office here in Abbotsford will close eventually as well and all sales inquiries will be fielding in High River as well.

Feel free to call us if you have any questions or concerns,

Kind Regards,

Larry J Clark

Building systems that expedite the construction process can help home builders deal with a new appraisal policy from Freddie Mac on one-time close loans that combine construction financing and a permanent mortgage, housing industry experts said at a press conference at last month’s International Builders’ Show in Las Vegas.

In a Nov. 24, 2008 bulletin, Freddie Mac reminded lenders that an appraisal must be completed within 120 days of the permanent financing of the home for mortgages with settlement dates on or after Jan. 2, 2009. If the effective date of the appraisal is more than 120 days before the effective date of the permanent financing, then the seller must provide an appraisal update.

Building systems can help builders complete their homes within the 120-day period and avoid the need for a new appraisal, participants at the press conference said, and modular homes are a prime example.

“While the builder is working on site to complete the foundation, the various modules are being framed and finished,” said Charles Bevier, editor of Building Systems Magazine. “Sometimes manufacturers will even install cabinets and floor coverings in the factory. This leaves minimal work for a set crew to finish on site.”

Even large, custom modular homes can be completed in less than 120 days from the start of construction, Bevier said.

Panelized homes, concrete homes and log homes include some amount of prefabrication, according to participants at the press conference. These building system techniques save builders time and money, and in the case of the new Freddie Mac lending requirement, the time saved can make an important difference.

However, there will be occasions in which not even the speediest of systems can produce a house in such a short time frame.

“That does not mean that the builder is out of luck,” said Tracy Keyser, a vice president of M&T Bank. “A re-appraisal or official confirmation of the original appraisal will keep the loan intact and the project moving forward.”

For more information on building systems resources available from NAHB, e-mail Tony Gacek at NAHB, or call him at 800-368-5242×8357.

I just discussed with our Dealer in Korea, a confirmation of the acceptance of our bid for a three home delivery to Seoul Korea. These homes will be @ 2500 square feet each and will be used as show homes in a 50 lot subdivision in Seoul. They are scheduled to be delivered in the next couple of months and will be used to sell client there on North American housing.

We have been actively working on exporting to Korea for a couple of years now and it looks promising that we will have our first prefab homes on the ground there this Spring. The market there is still strong for housing and the Korean cost for wood has risen sharply this year. This makes our product very cost effective in U.S. dollar sales.

I will update more on the blog as we move forward.

Kind Regards,

Larry J Clark

Happy New Year to you and yours this 2009 and new season. I pray it will be a great year for you all.

We are back in the office after a long Christmas break but are snowed in! Had to use the Expedition to get to the office today. Can you believe it? This is January n Vancouver. We usually get rain and more rain in the winter, but very little snow. Now we have 2 feet of it on the ground.

I an very optimistic about this year ahead and where housing and Allpro will be going. You will see some changes here this year and will be positive ones once they are finalized.

I will send out a Newsletter explaining more in a few weeks.

Feel free to contact us at anytime if you have questions or need some advice.

Kind Regards,

Larry J Clark
President
Allpro Homes Group of Companies Inc.

Just thought I would inform our U.S. based clients that the Canadian dollar has weakened in the last week against the U.S. dollar and this gives you an approximate 10% extra buying power now purchasing home packages from Canada. Because we price in Canadian funds, you can purchase money orders from your Bank with the exchange and save some money.

Not sure how this is going to last but we are opening up a price guarantee for this Fall that will hold pricing until Spring 2009 with a deposit now. You can contact us for details at 1-866-504-1555

Kind Regards,

Larry J Clark

We were running out of space in our old Office and needed bigger ‘digs’ so we have searched for approximately one year and now have a new home! The good news it is larger and is around the corner from our last office space.
I will post some pictures in a few days for you as well.
Please note the NEW address is:

C2609 Progressive Way, Abbotsford, BC Canada V2T6H8

Our phone numbers will not change and we have updated the phone system as well to better assist you when calling.

To your building future,

Larry J Clark

I just read an article from Jackson City Mississippi. The City Council banned Modular Homes from being built in their City. Panelized Homes, like ours, were officially given clearance to be used. Interesting.

Here is the LINK to the article online.

To your Building Future,

Larry J Clark

Got a call today from a Canadian client who said …” I have a friend who said stay away from these Prefab Homes as they look just like Trailers “. I am confident you guessed that ‘Trailer’ means mobile home. Nothing bugs me more that people who comment on something they do not have all the facts on. So allow me to set the record straight.

Way back in the 70’s and 80’s, you may have seen a prefab or panelized home that was built to the same look as a mobile or modular home, but those days are long gone. Modern prefab and panelized homes can be built to any plan design and some of the most awarded homes now are Prefab designs and modular units. With sophisticated software, the framing of new homes has improved dramatically and is very accurate and therefore very efficient to frame/erect. The only thing that we cannot frame is rounded walls. We have even done octagon designs.

Even the new breed of Modular homes are being done with “cottage” or hip roofs which was unheard of 10 years ago. Perhaps this ‘friend’ does not get out much or has not taken the time to visit our Cabin and Cottage site and looked at the photo gallery of some beautiful A-Frame Cabins we have done with panelized construction. You would be amazed at the quality and designs now being fabricated on a regular basis across Canada and the U.S.

Am I ever thankful this client was educated enough to call us anyway and find out the real story. Now you are educated as well!

Here’s to your Building Success,

Larry J Clark