The square footage of a residential house is calculated by measuring the outside perimeter walls of the floor areas which are above grade. Note: The finished areas beneath grade can be measured and added to the house square footage — but the result is sometimes referred to as the house “living space”.

The square footage of commercial rental space is calculated tradltionally by measuring the outside of any exterior wall to either the opposite outside of the exterior wall or if said wall is adjoining another commercial space, to one-half the thickness of the adjoining wall.

“Return on Investment” can be calculated in many ways but common practice has ‘the value paid for the investment’ divided into ‘the NET (after property expenses) yearly proceeds received from the investment.

This calculation does not take into account the capital gain loss (ie — the increase or decrease in the market value of the property). When one sells an investment property, one pays a

capital gains tax on 50% of the property value gain in value (ie — value is usually the sale price) over the purchase value (ie — value is usually the paid price). The tax on the 50% gain

portion is the rate of the investor tax rate for the year of the sale*.

* Subject to changes in tax law and each investor should confirm their situation with this accountant.

Base Rent on a Commercial Lease is as the name indicates. The ‘Base’ rent payable by the tenant before utilities, H.S.T. and common area/realty taxes/insurance. The latter, ‘common area/realty taxes/insurance’ is usually referred to an T.M.I.(short for taxes, maintenance and insurance) or Additional Rent or Recovery Charges.

YES there is extra H.S.T. payable on the purchase of a NEW residential property, if the intent is to rent it out to a non-family member. BUT the current regulations provide for the rebate back to you of the extra H.S.T. payable, if one can provide a residential rental contract for one year on the premises. One has currently upon to 2 years to file for the rebate following the closing of the premises*.

* Subject to changes in regulations of the H.S.T. rebate rules.

YES — H.S.T. is payable by the buyer of a commercial property and is paid in addition to the purchase price. The purchase price is generally the price paid for the property on transfer of title to the new owner*.

• Subject to changes and interpretations of

(c) has the property been used commercially or as an active farm, now or in the past.