From the blog...


Posted on: April 6th, 2017 by Chris Scott


In Ottawa there are so many military clients that need to sell quickly. In some cases, they are not able to recoup all of their equity. In rare cases, they may sell at a loss.  Here is some good information for anyone in this position.

8.2.10 Capital improvements

Custom benefit

Limited capital improvements may be reimbursed in accordance with the table below:

Capital Improvement Benefit Formula
  • Original purchase price
  • + Eligible capital expenses
  • – Sale price
  • = Reimbursable loss (if result is negative)

The following is an all-inclusive list of eligible capital improvements:

  • Additions – bedroom, bathroom, deck/patio, porch, walkway, storage shed, garage.
  • Installations – new windows, driveway (including paving), central air conditioning.
  • Complete modernization – kitchen (new cupboards, countertops, sink, taps, etc) or bathroom (new cupboard/vanity, countertop, sink, shower/tub, etc).
  • Heating System – change from hot water radiator to forced gas or upgrade to high efficiency furnace and required ductwork.

Basic Landscaping – other than decorative including the installation of a perimeter fence. (On new home construction excludes initial landscaping which occurs within one year of occupancy when not identified by Building Agreement.)

Personalized funds
When all custom funds have been expended.

Eligible period
Capital improvements must have been carried out after CF members have taken possession and before the sale of the residence.

Original receipts are required for all capital improvements.

8.2.13 Home Equity Assistance (HEA)

As per the HEA calculation criteria listed below, CF members who sell their home at a loss are entitled to reimbursement for up to 100% of the difference between the original purchase price and the sale price from specific funding envelopes as follows:

Core benefit
  • 80% of the loss, to a maximum of $15,000; and
  • 100% of the loss, in places designated as depressed market areas by Treasury Board Secretariat (TBS).
Custom benefit

In excess of core entitlement.

Personalized benefit

When all custom funds have been expended.

HEA calculation criteria

  • Properties selling for less than 95% of the market value require DCBA approval prior to qualifying for this benefit. Market value is to be based on the appraisal provided by CFIRP.
  • Capital improvements shall not be included in the calculation of HEA but may be claimed separately as per art 8.2.10.
  • Any reductions of the sale price based upon deferred maintenance shall not be included when calculating HEA.
  • The original purchase price for new home construction consists of costs:
    • identified in the Building Agreement, and
    • for initial landscaping which occurs within one year of occupancy (when not identified in the Building Agreement).

Depressed market, as established by Treasury Board Secretariat, is defined as a community where the housing market has dropped more than 20%.

Depressed market status may be evaluated when:

A CF member and the Realtor build a case for depressed market status by submitting the following documentation to DCBA through the CF Relocation Coordinator for review, DCBA will forward it to IRP Program Authority at Treasury Board Secretariat:

  1. Personal introduction including an outline of changes in the local economy evident during the time at origin.
  2. All pertinent information with respect to the purchase of the subject property. This would include the original purchase agreement, the current appraisal report, list of the capital improvements made to the property and the related costs. Also, the appraised value when originally purchased and any property assessments since the time of purchase. Regarding cost of construction, this will require submission of original receipts to confirm the original purchase price, if a building contract was not used. Capital improvements must be supported by original receipts only.
  3. General and specific information on the geographic location and local economic state; i.e. the circumstances that may be happening in the surrounding areas such as mill closures, unemployment rate, school closures. Include relative newspaper articles, memos, and objective evidence of market decline. Also, include sale date, date offer received, listing date list price, lowered list price and any home equity loss paid.
  4. For real estate information:
    1. Letter from Realtor expressing his/her professional opinion of the overall decline in the market since time of purchase;
    2. Copies of comparable sales (similar type homes) that were concluded within the past 6 to 12 months;
    3. Number of current listings in various price ranges and number of days on the market;
    4. Number of sales (year-to-date) in various price ranges and number of days on the market;
    5. Number of sales during previous 2 years in various price ranges and number of days on the market;
    6. Number of foreclosures (year-to-date) and same for previous 2 years; and
    7. Current vacancy rates, and similar information from previous years.

Note: All items must be labelled with a table of contents.

If you are relocating to Ottawa or have any questions, please get in contact with us. This is what we specialize in.

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