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WHY PAY MORE? SAVE!! On Preznîum QOfilîty FUEL OUL STOVE OIL PROMPT, COURTEOUS SERVICE CALI 668-3381 Oxford BRICKLAYERSl STONEMASONS WILLIE J, SCHMAHL Phone 983-5606 Specializing in ali kinds of STONEWORK and FIItEPLACES LWe also do chirmney JACK ]RICARD RE AL TO R 99 King St., E. BOWMAN VILLE Whîen Buying or Sclling Cali WILF HAWKE Vour Orono Area Represeittative 983-5274 Member of Oshawa and District Real Estate .Board PUMPING OUT SEPTic TANKS Bert Tompkins Poo786-2552 Newtonville, Ontario Ini a previouis column on the Ontario Budget I discuissed1 the new land seuain tax, its purpose andf those of youl who wouild be exemipt. .Judging from thle letters I am receivinig fromn my con- stituents, there stili remains a great deal of misunderstand- ing by homeowners and farmers in particular. This is to be expected, since any taxing statute is by nature complex. In this column I would lîke to demonstrate hw it works and clarify the reasons wvhy Building, aHouse? or remodefing your preset one? Then Contact Floyd Nich olson Phone 983-5049 Orono1 INSTALL AN C) FURNACE BOILER H1EATEKR No paymenIts frsxmonths Harve'y Pa('nner Vour ESSO Serv-ice Dae LFREE ESTIMATESJ 98 3-52 06 0 r ono G.W. DRyWALL TAPING SPRAYED CEILINGS APPLYING DRYWALL PLASTER REPAIRS Phone 983-5518 WaIIy Lucyk yORONO Bob Yeomans Piumbing, and Heating 24 Hour Service New Installations Atterations -Repairs Specializing ln Hot IVater Heating RR1, Oron 983-"5624 THE.I *FurnitureBôarn à I4WY. 115, NEWCASTLE I Phone-987-5151 or 987-5161 IBUDGETWISE-QUALITYWISE* IWE'RE TOUGHl TO BEAT* *New Furniture OnlyI I LIVING ROOM SIE-BDOMSIE I DNETTE SIEROCKERS-RVECINERUS î * LAMPS AND LOTS MORE *Come in and browse around No alemento Bother yourI * IMMEDIATE DELIVERY I I SAME DAYFINANCING IF I * REQUESTED * OPENMONDAYTIIRUFIDAY11.)-9.m m mm E' ' ND ý(ýAYS the homeownver and farmer 1need not be concerned. For tis purpose, consider ithe exýamiple of a farmner who boughit a farm- in 1965 for $50,000, Becýause, the budget including the Land Specul- ation Tax) was announced on April 9, 1974 thlat date beomsthe lbase valuation date. Any incr2lease in value prior to thiat date is tax,-free. For the purposes of our example let's assumne that improvements added and in- flationary effects have made that farm worth $150,000 on April 9, 1974. Question: Does the tax apply to ail land sales? Answer: Certainly not. In fact it will apply to a relatively small proportion of total transactions. Briefly, the exemptions include: -a principal residence (up to 10 acres); a principal recreationai re- sidence, (up to 20 acres and if not sold to a non resident) -land upon which a buiJlding has been constructed to a value of 40 percent of the land value* land wihincludes, a build- ing that the seller has renova1ted at a cost of 20 pretof the purchase price; any \predoinanitly commer- cial or ind(ustr-ial property except ani apartmnent building -any tourist resort; a farm as long as it's transferred to a member of the family and 'farming is carried on. There is no speculation tax liability at ail if a transaction comes within any of these exemptions. Qusin fi Jcar't comne un1der anlxeptonwhat part of thie sale price is the tax levied on? Answer: The tax is applied on the DIFFERENCE between the sale price and the fair market value at April 9th after certain adjustments are added to, the, April 9th value to allow for property taxes, mnortgage interiest, improve- mnents, etc. betwveen the two dates. in our exampie, if the land had been sold fin dune for, let us say $160,0001 any tax wouid aýPPiy011nly vto the differencebeen the sale price of $160,000 andj( the April 9th value of $ -0,0 namely $10000. This latter figure (cled th(,l le "Taxable value") would be reduced further by those adjustments I've men- tioned. Since the tax imposed is 530 percent, the maximum that this transaction would attriact'would be $5,000 and probably somnewhat less. Question: As years go hy, the value will increase. Is every dollar of increase going to result in lfify cents of tax? Aniswer: No. The Act provides specific relief for farmers in this regard. Quite apart fromn what actualiy, happens in the ecnmthe act will as.sume that a farm inc1îreases in value ai a rate of .10 Percent comnpoundfed annually%. This means it w,\ould be deemed to have djouledc( in value in a littie over seven years. Let's go back to our examnple agaîn. Sayý this farm- was sold in April 1980 for, $350000, the increase ini va1lue between the original purchase in 1965 and the valuation date in April 1974 is completely tax free. The, value in n 174of $150,000 must be adjusted by co- pou.nding thlat figure at a rate Carruthers expi s speculation tax -OROO WEKLYTIMES, JUNE 5th, 19741- exmtosfrom l tax in mdiv- idujal case.s or refunding tax by orde(r-in-couincil. As 1 said at theu outse-t, the purpose is to isouag 198G. At A\pr!l 1975, it is $150,000 plus 10 Percent of $165,1000; inAri 1976, it is $165000 plus 10 percent of $181,500 and so on. By 1980, this "-adjusted value" would, by this process, be $265,735. There, is a further significant plus to be added to this adjusfted value. Each year you cani add the lesser of 10 percent of the differenice between the sale price and the fair market value (in our exaînple this difference is $200,000 or $20,000 per year -a total of $120,000) or the total of niet maintenance costs (Le. al costs, including'property tax- es, initereýst payments, con- nected with maintenance of the land.) The effect of this means that rather than doubi- ing in 7-1/2 years, it doubles in 4-'2, years. In our examiple, this could bingii, our adjustud value to a total of $:38,7735. Since this figure exceeds the sale price, no tax would apply at al. Question:Wh not exempt al farmi sales so long as it remains a farm? Answer: These provisision are desjined to protect the investment of bona f ide farm- ers. Because the definition of "farmer" and "farming" must be wide in order to avoid, the hardship on, some, a speculator could acquire the land and mnaintain a tax- exempt status by simpiy grazing a few animais on it. Question: Are the rules any different if the farm is soid to a government or expropriat- ed.. > Anwser: Ves the tax does flot apply. Question: What wil happen if the wvrong people, in spite of safeguards, are stili caught unintentionally? Answer: This is pioneering legisiation. There are no precedents to go by and there may well1 be occurrences which will require changes in the Act. The Minister of Revenue 1-as already indicat- ed willingness to make any changes that experience in- dicates should be made. In addition, the Act Drovides for II28 i ibaif o rd~ yI AnnounenieI Ioda, ueda, hùcdy 200 p.m nde- 8M p. * *rda 2,0pm.-900pm saturdy 10.0 a.m.-w5.0 p. e. O Clrk (2 tLS o5 HWA *odav Tusa, hï îs ' n 18T46D TuesàaGNTRtLrMda FNAdCE (Library Bod atrd Q New foryvour Baby BABY CH1AIR - CRIB EXERCISER F'LOATING TOYS F 001) WARMERS FEDIG ISH - SLEEPERS ~ / JUMP SUITS and SHOES - L Bathing Suits For Everyone in th e Family Now is the time to choose yours. Running Shoes New shipment of Running Shoes for boys and girls in blue and white, yellow and black. Also) Ladies'Keds noix in stock. Boy's Shorts Boy's Shoits in ail sizes 2 to 3X. 4 to 6X ~and 8 to 14 years. ARMSTRONG'