If you and your spouse or common-law partner were separated or divorced on December 31, each of you can claim a property and sales tax credit. Although you may have shown your marital status on your tax return as married or living common-law, if you and your spouse or common-law partner occupied separate principal residences in Ontario for part or all of the year for medical, educational, or business reasons, we will consider you to be involuntarily separated during that period for purposes of the property and sales tax credits.
As a result, each of you may apply for a property tax credit by including the following in your tax credit claim:. For the period before separation, the property tax or rent paid may be divided any way you choose. However, the total amount of rent or property tax claimed, when combined, may not be more than the actual rent or property tax paid for the residence before separation.
Each spouse or common-law partner may claim a sales tax credit. However, only one person may claim the sales tax credit for a dependent child.
You cannot claim the property or sales tax credits on the final return for a person who died in the tax year. If your spouse or common-law partner died in the tax year, you can claim the property tax credit and sales tax credit on your return but you cannot claim an additional sales tax credit for your deceased spouse or common-law partner. Calculate your claim on Form ON, Ontario Credits included with the federal income tax and benefit package.
You do not have to include property tax or rent receipts with the Ontario tax credits form. Keep all receipts in case the Canada Revenue Agency asks to see them.
Receipts should state the year, the total amount of rent paid, and the name and address of the landlord. Your occupancy cost only covers the period in the tax year that you lived in your principal residence in Ontario. A principal residence can be a house, apartment, condominium, hotel or motel room, mobile home, or rooming house.
If you are a homeowner, occupancy cost is the property tax paid in Ontario on your principal residence in the taxation year including:. If you rented, occupancy cost is 20 per cent of the rent paid in Ontario in the taxation year including:. Imputed rent is the value of services that you or your spouse or common-law partner provide to a landlord instead of paying rent. For example, if you are a farm labourer, domestic, apartment superintendent or a member of the clergy, you may have imputed rent. You may use the imputed rent to calculate occupancy cost for the property tax credit.
You must also include the imputed rent as income when filing your income tax return.
If you share a principal residence with one or more persons other than your spouse or common-law partner , your occupancy cost is based on your share of the rent or property tax you paid for the year. If you occupy a new unregistered condominium unit as your principal residence, special rules apply. From the date you occupy the unit until it is registered in your name, you would claim the interim cost of the condominium as rent. Once the unit is registered, calculate the property tax credit as an owner by prorating property taxes from the date of registration to December If you own your home but lease the land on which the home is situated, you may claim a property tax credit.
Use the method most beneficial to you. Property tax is the actual tax on the home and lot. It is calculated by multiplying the assessed value by the local mill rate, and is not necessarily the amount considered 'tax' in the rental agreement. A residence is designated if it is part of a recognized educational institution and exempt from paying either municipal and school taxes, or a full grant instead of taxes.
You may clarify the status by contacting the residence administrator or the Ministry of Finance which maintains a list of university and college residences. If you live in a nursing home, charitable institution, home for the aged or a similar institution which pays full municipal and school taxes, or a grant instead of taxes, you may claim a property tax credit.
You must deduct from your occupancy cost any accommodation subsidy from a government agency. The rent portion of your nursing home payment must not include amounts for items i.
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If a cost breakdown is not available, an amount of up to 75 per cent of your total nursing home payments may be claimed as rent. Residents of co-operative housing units who do not have ownership interest, may claim a property tax credit based on rental payments only. If you live and have an ownership interest in a co-operative, you may claim a property tax credit based on the property tax you paid to the municipality, or the property tax set by the co-operative for the unit you occupy.
Residents who have paid a lump sum for the 'right to occupy' for life or a stipulated period are not registered on title as owners of their unit, therefore they are more like tenants than owners. As a life lease resident, calculate your occupancy cost as rent using the following calculation: The resulting rental amount will be multiplied by the usual 20 per cent when determining your occupancy cost on Form ON, Ontario Credits. To obtain the most current version of this document, visit ontario. Purpose The refundable property tax credit provides assistance for people with low to moderate incomes who own or rent a principal residence in Ontario.
Ontario refundable tax credits can be received even if you pay no income tax. Sales tax credit amount Only one sales tax credit may be claimed for each person. Maximum amount of property and sales tax credits Property and sales tax credits are income tested when you complete Form ON, Ontario Credits. Eligibility requirements Basic requirements You can claim the property tax credit if all of the following conditions apply: Looking forward, the 4-week average will decline until mid-January and then start to increase again the normal seasonal pattern.
February and March are the next key period - that is when business travel usually picks up. From the National Restaurant Association: In addition, November represented the second time in the last three months that the RPI stood above , which signifies expansion in the index of key industry indicators. Restaurant operators reported positive same-store sales for the sixth consecutive month inNovember. Restaurant operators also reported stronger customer traffic levels in November.
Capital spending activity among restaurant operators trended upward in recent months. Forty-six percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, the highest level in five months. The index increased to Unfortunately the data for this index only goes back to Restaurant spending is discretionary and is impacted by the overall economy. This index showed contraction in July and August, but is now positive again. All current retail related graphs. This is down from 4. The Fannie Mae serious delinquency rate peaked in February at 5.
Freddie Mac reported that the Single-Family serious delinquency rate increased to 3. This is down from 3. Freddie's serious delinquency rate peaked in February at 4. These are loans that are "three monthly payments or more past due or in foreclosure". Click on graph for larger image The increase in November unchanged for Fannie is probably seasonal. The serious delinquency rates have been declining, but declining very slowly. The reason for the slow decline is most likely the backlog of homes in the foreclosure process.
Early in , a mortgage settlement agreement with the servicers might be reached, and that might lead to more modifications and foreclosures - so the delinquency rate might decline faster. Also Fannie and Freddie are expected to announce a bulk sale of REO to investors and possible rental program early next year - and that might also lead to more foreclosures. All current mortgage delinquency graphs. The year is almost over and once again a key downside risk for the economy is high gasoline prices.
These prices have kept gasoline prices high, and pushed down vehicle miles driven in the US. Although prices were higher in the first half of , it is possible that the average annual price for oil and gasoline in will see a new record high. If the global economy really slows, oil and gasoline prices will probably fall - and probably offset some of the impact from lower exports. Unfortunately turmoil in the Middle East this time with Iran might be pushing up oil prices.
This following graph shows the prices for Brent and WTI over the last few years. Usually the prices track pretty closely, but the "glut" of oil at Cushing pushed down WTI prices relative to Brent. The spread has narrowed over the last couple of months following the announcement of a partial reversal of the Seaway pipeline to transport crude oil from Cushing, Oklahoma, to the Gulf Coast the pipeline is scheduled to be reversed in Q2 And below is a graph of gasoline prices. Gasoline prices have been slowly moving down since peaking in early May.
The graph below shows oil prices for WTI; gasoline prices in most of the U. A few weeks ago, I posted: Labor Force Participation Rate: Instead of Work, Younger Women Head to School Workers are dropping out of the labor force in droves, and they are mostly women. In fact, many are young women.
But they are not dropping out forever; instead, these young women seem to be postponing their working lives to get more education. Bill instead of immediately entering, and overwhelming, the job market. Both men and women are going back to school, but the growth in enrollment is significantly larger for women who dominated college campuses even before the financial crisis.
In the last two years, the number of women ages 18 to 24 in school rose by ,, compared with a gain of 53, for young men. The main risk in going back to school is the accompanying student loan debt. The flip side is that many older workers are also going back to school and getting student loans, see: Middle-aged borrowers piling on student debt ht Ann Middle-aged borrowers are piling up student debt faster than any other age group, according to a new analysis obtained by Reuters.
That is deeply concerning. But in the long run, more education is a positive for the economy - and Rampell's article suggests the kids well, young adults are alright! This is the last of the regional Fed surveys for December. The regional surveys provide a hint about the ISM manufacturing index - and the regional surveys were mixed in December although they showed some improvement in the aggregate.
Tenth District Manufacturing Activity Eased Slightly According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity eased slightly, but expectations for future months improved somewhat. The month-over-month composite index was -4 in December, down from 4 in November and 8 in October, and the first negative reading since December Most other month-over-month indexes also fell somewhat in December.
The production and shipments indexes moved into negative territory, and the new orders and order backlog indexes fell further. The employment index dropped to its lowest level since mid, and the new orders for exports index edged down. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index: The ISM index for December will be released Tuesday, Jan 3rd and the regional surveys suggest another reading in the low to mid 50s.
This was above consensus expectations of The October upward revision resulted in a The last time the index was higher was in April when it reached In the Midwest the index increased 3. Pending home sales in the South rose 4. In the West the index surged In the week ending December 24, the advance figure for seasonally adjusted initial claims was ,, an increase of 15, from the previous week's revised figure of , The 4-week moving average was ,, a decrease of 5, from the previous week's revised average of , The following graph shows the 4-week moving average of weekly claims since January And here is a long term graph of weekly claims: Although initial claims increased this week, the 4-week moving average is still falling and is now well below , All current Employment Graphs.
Residential investment made a small positive contribution to GDP in , for the first time since And construction employment turned slightly positive in Now the question is what will happen in ? I think some pickup is likely, but I'm not as optimistic as some other people Hedge Funds See Rebirth for U. Even some housing skeptics acknowledge that real estate may no longer be the drag it has been on the economy. Ivy Zelman [predicts] that rising rents will push would-be buyers to purchase homes.
A housing recovery isn't "happening as fast as everyone would like," she says.
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But there are "a lot of pillars in place to give us some optimism. I'll have more on housing and residential investment soon. Tom Lawler mentioned this back in June. According to the deptofnumbers. Unfortunately the deptofnumbers only started tracking inventory in April This graph shows the NAR estimate of existing home inventory through November left axis and the HousingTracker data for the 54 metro areas through December.
This is the first update since the NAR released their revisions for sales and inventory. There is a seasonal pattern for inventory, bottoming in December and January and peaking during the summer months. So inventory will probably decline again next month and then start increasing in February. HousingTracker reported that the December listings - for the 54 metro areas - declined For the final week in December, inventory is down This is just inventory listed for sale, sometimes referred to as "visible inventory".
There is also a large "shadow inventory" that is currently not on the market, but is expected to be listed in the next few years. Shadow inventory could include bank owned properties REO: Some of this "shadow inventory" will be forced on the market, such as completed foreclosures, but most of these sellers will probably wait for a "better market". However listed inventory has clearly declined in many areas. And it is the listed months-of-supply combined with the number of distressed sales that mostly impacts prices. Over the weekend I posted some questions for next year: Will the Fed introduce QE3?
Will the Fed change their communication strategy and include the likely future path of the Fed Funds rate? Last year many analysts were arguing that the Fed would end QE2 early and raise rates before the end of That seemed very unlikely. Not only didn't the Fed raise rates, but they went a step further at the August meeting and dropped the somewhat ambiguous "extended period" language and replaced it with a time frame: There have been several recent articles suggesting this change see the WSJ: Instead, officials could signal their intentions by publishing a range of their forecasts for rates along with their quarterly economic projections.
This change in communication strategy will probably happen at the two day January FOMC meeting on the 24th and 25th. The Fed will probably take a wait and see approach early in the year, and QE3 would be dependent on the unemployment rate and inflation the Fed's dual mandate. If the economy tracks the most recent projections , QE3 would seem likely at either the April or June meetings. Others are arguing that QE3 could happen at the March meeting. If the economy performs better than expected, then the Fed will probably wait longer. Of course, if the economy performs worse than projected early in the year - or Europe implodes - the Fed would probably move quickly on QE3.
To summarize my views: From the NY Times: The bills were sold at a yield of 3. The Italian 2 year yield is down to 4. The Spanish 2 year yield is down sharply to 3. But the Italian economy is weak: Italy suffered its biggest decline in Christmas retail sales in 10 years, according to data released this week by the consumer group Codacons, reflecting the impact of the souring economy.
It was a similar picture in Greece, headed for a fourth year of recession in From economist Tom Lawler: However, estimates both from RealtyTrac through November and Hope Now through October suggest that this will in fact be the case. Moreover, estimates from Hope Now on the number of completed foreclose sales on owner-occupied properties suggest that such foreclosures will be down very sharply this year. Unfortunately, Hope Now only started reporting the breakout by occupancy status in December Short sales and DILs, in contrast are likely to be up in compared to , at least according to estimates derived from Hope Now data.
As of the end of October, LPS estimated that there were 1. It would really be helpful to have an official count of foreclosures and short sales. The value of the yuan, which Beijing manages closely, has risen by 4 percent against the dollar this year and 7. Here is the report from Treasury: The Report highlights the need for greater exchange rate flexibility, most notably by China, but also in other major economies. Nonetheless, the movement of the RMB to date is insufficient.
Treasury will closely monitor the pace of RMB appreciation and press for policy changes that yield greater exchange rate flexibility, a level playing field, and a sustained shift to domestic demand-led growth. The following graph shows the rolling 12 month total vehicle miles driven. In the early '80s, miles driven rolling 12 months stayed below the previous peak for 39 months. Currently miles driven has been below the previous peak for 47 months - so this is a new record for longest period below the previous peak - and still counting!
And not just moving sideways The second graph shows the year-over-year change from the same month in the previous year. This is the eight straight month with a year-over-year decline in miles driven. This decline is probably due to high gasoline prices and the sluggish economy. Maybe habits are changing Case-Shiller, CoreLogic and others report nominal house prices.
However it is also useful to look at house prices in real terms adjusted for inflation and as a price-to-rent ratio. Below are three graphs showing nominal prices as reported , real prices and a price-to-rent ratio. Nominal House Prices Click on graph for larger image. All current house price graphs Earlier: House Prices fall to new post-bubble lows in October seasonally adjusted. This release includes prices for 20 individual cities and and two composite indices for 10 cities and 20 cities.
The first graph shows the nominal seasonally adjusted Composite 10 and Composite 20 indices the Composite 20 was started in January The second graph shows the Year over year change in both indices. The Composite 10 SA is down 3. The Composite 20 SA is down 3. This was a slightly smaller year-over-year decline for both indexes than in September. Nineteen of 20 cities saw price drops, and the index is now down I'll post graphs after the data is released.
Slowing Inflation Cheers Fed U. The Fed has been considering new steps to spur growth. Two ideas are on the table: Before taking either step, though, Fed officials would want to have some comfort that they wouldn't be creating undesired inflation. As Hilsenrath notes, inflation is slowing by most key measures, and this will give the Fed more leeway.
It always seems the Fed telegraphs their intentions, and it now seems very likely the Fed will add a range of Fed funds rate forecasts to their quarterly economic projections at the next FOMC meeting on January 24th and 25th. The bond buying program aka QE3 would be data dependent and probably start a little later in the year if economic growth disappoints. Discussions of the business cycle frequently focus on consumer spending PCE: Personal consumption expenditures , but one key is to watch private domestic investment.
The first graph shows the real annualized change in GDP and private investment since this is a 3 quarter centered average to smooth the graph. GDP has fairly small annualized changes compared to the huge swings in investment, especially during and just following a recession. This is why investment is one of the keys to the business cycle. The second graph shows the contribution to GDP from the four categories of private investment: This is important to follow because residential investment tends to lead the economy, equipment and software is generally coincident, and nonresidential structure investment lags the business cycle.
Red is residential, green is equipment and software, and blue is investment in non-residential structures. The usual pattern - both into and out of recessions is - red, green, and blue. The dashed purple line is the "Change in private inventories". This category has significant ups and downs, but is always negative during a recession, and provides a boost to GDP just after a recession. Change in private inventories has made a large negative contribution to GDP over the last four quarters, and will probably make a positive contribution in Q4.
The key leading sector - residential investment - has lagged this recovery because of the huge overhang of existing inventory. Usually residential investment is a strong contributor to GDP growth and employment in the early stages of a recovery, but not this time - and that weakness is a key reason why the recovery has been sluggish so far.
Equipment and software investment has made a significant positive contribution to GDP for nine straight quarters it is coincident. The contribution from nonresidential investment in structures was positive in Q3. Nonresidential investment in structures typically lags the recovery; however investment in energy and power is masking weakness in office, mall and hotel investment. And residential investment has finally turned slightly positive and will make a positive contribution to GDP in for the first time since What does this mean for the business cycle?
Usually residential investment would turn down before a recession, and that isn't happening right now. Instead residential investment is mostly moving sideways. The third graph shows residential investment as a percent of GDP. Residential investment as a percent of GDP is at a record low, and it seems unlikely that residential investment will decline significantly lower as a percent of GDP - especially with a pickup in multifamily investment and some increase in home improvement Note: Residential investment is mostly investment in new single family and multifamily structures, home improvement and brokers' commissions.
It seems likely that residential investment will make a positive contribution to GDP in The last graph shows non-residential investment in structures and equipment and software. Equipment and software investment has increased sharply, but is still at a fairly normal level of GDP.
And non-residential investment in structures increased in Q3, but this is still very low. A key fear is that the financial crisis in Europe could drag the US economy into another recession.
That is possible, especially combined with ongoing household deleveraging and fiscal tightening in the US with current policy, Federal, state and local governments will all subtract from GDP growth in However it seems unlikely there will be a sharp decline in private investment. Residential investment is already at record lows as a percent of GDP and will probably increase in Changes in private inventories will probably rebound a little, and investment in non-residential structures is also near record lows.
It is possible that investment in equipment and software could decline in , but it doesn't seem likely there will be a sharp decline in overall private investment. If the euro zone comes apart rapidly - or there is further non-private tightening - a new recession is possible in the US, but without a sharp decline in private investment, it is unlikely a US recession would be severe. Right now it appears overall US private investment will increase in , and that the US will avoid a new recession.
From Brady Dennis at the WaPo: Falling home values mean budget crunches for cities Because of the time it often takes for property assessments to reflect falling home values, the bust that began in has just begun to ravage tax revenues in communities from coast to coast. The problem is unlikely to subside soon.
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