The

spring housing market

is here, and with it a temptation to move, but before you pull the trigger on a purchase, it is worth stepping back and considering a long-range plan for how many times you will buy and sell homes in your lifetime.

Downsizing, upsizing,

buying for the first time

… it doesn’t matter; the transaction costs that

come with real estate

are something we all need to consider. And they are not going down. They seem to be going up based on taxes, commissions and moving costs.

The costs start

with the fee to real estate brokers, which can easily be five per cent, or $50,000 on a $1-million home. In Toronto, land transfer taxes would be almost $33,000 on that home.

The buyer pays it

, but it’s likely

imbedded in the price

and, besides, you’ll be paying it on the home you purchase to replace your existing one.

It’s not unreasonable to add in another $2,000 for a lawyer, and there are endless soft costs with fixing your home up for sale and redecorating your new home.

Jennifer Hughes, a certified financial planner at Modern Cents, which doesn’t sell products or give specific investment recommendations, said the “rule of thumb” is to hold your home for seven to 10 years.

“It’s not perfect in every case,” she said. “There are reasons to move, specifically, relocating to work.”

Hughes points out that, at the very least, you need to be

taking advantage of claiming home expenses

. Canada Revenue Agency lets you deduct expenses associated with the move, including the cost of selling your home, from your income.

Generally, you can claim moving expenses you paid in the year if you meet two conditions: you moved to a new home to work or to run a business out of a new location or you moved to be a student in full-time attendance in a post-secondary program at a university, college or other educational institution.

Your new home must be at least 40 kilometres closer to your new work location or school.

A move can make sense. Life circumstances change, and living in a city such as Toronto, where commuting can easily take an hour each way in traffic, a 40-kilometre reduction in travel each way translates to real savings when you think about the value of your time.

“One thing to keep in mind is, are you doing the move because of your life or are you doing the move to keep up with the Joneses and you think you need a bigger home?” Hughes said.

Daniel Foch, chief real estate officer at Valery Real Estate Inc., said commissions haven’t moved much from the four per cent to five per cent range. The issue in a rising housing market has been that many people just think, “Well, I made money,” so they feel justified in moving again.

“In the last 15 years, if you moved seven times, other than the last five (years), you probably would have netted out ahead, even after fees and taxes,” Fuch said. “The market in perpetual growth made it easy to ignore the cost and inefficiency of moving.”

The issue with making money is that you net less than you would have if you had skipped out on a couple of moves. Ultimately, most moves on the way up follow family expansion and see people make a bigger bet on housing, a strategy that has worked for almost two decades. Maybe not anymore.

“You save on the money being tax-free, which is really the compelling reason,” Foch said, referring to the principal residence exemption on capital gains.

There is a small minority of flippers who are very good at fixing their own homes — your principal residence might be the only place your labour sweat is not taxed — who can justify moving more often.

Foch said he knows people who do those sorts of renovations themselves, but even in their case, they do it every five years, which is probably a good idea, so the Canada Revenue Agency doesn’t consider the move a business and tax you.

“The good reasons to move are more qualitative, like people want to go to a different area with a different school,” he said. “The efficient way is a starter home that they keep light and then flip into a home they live in longer, and then after that, you probably shouldn’t move again until you are downsizing.”

Hughes said one of the practical problems people face when buying a new home is that they end up going back into debt and resetting their mortgage clock. She said they also tend to forget the costs associated with switching houses, which she believes can total 10 per cent.

If there is one positive about the latest housing cycle, it might be that people now realize “real estate can go down” and can envision that it doesn’t always just rise in value.

“You take a step back and ask where you see yourself in another five to 10 years,” Hughes said. “Does the home meet your needs long term or is it just shiny and new?”

Even if you do have to move for work or some other major life decision, there is no reason you have to sell your home and face the transaction costs. You could just rent and have that income.

Rentals.ca in February said monthly asking rates are at a 33-month low,

creating some choices for homeowners

while also spurring renters to move.

It’s not even that clear that people want to move these days, with many knowing full well that costs are rising, Nancy Irvine, president of the Canadian Association of Movers, said. “Fuel costs more, all the packaging, the bubble wrap. Everything is going up.”

A recent Nanos survey said 47 per cent of Canadians are not open to relocation, and just 23 per cent will relocate for a job within their region.

Pashv Shah, general manager of Canada at Taskrabbit Inc., said spring and fall are the major times to move. A recent survey by the company said 48 per cent said their last move was more stressful than planning a major vacation. Another 32 per cent said it was more stressful than finding a new job.

Then there’s the 21 per cent who said moving was more stressful than getting married. Those people are in for the shock of the stress of living married.

So why move?

“Times are tough, and sometimes it just makes a little more sense for that person to move,” said Shah, whose company is creating a national platform that provides truck-assisted moving, which includes the vehicle and labour.

Taskrabbit said most Canadians spent between $1,000 and $2,500 on their last move, and by providing a clear pricing schedule for those costs with no hidden fees, the company is making the math clear on the savings that could be achieved. Cut your rent by $300, and even at the high end of $2,500, it could pay for itself in less than a year.

For homeowners, the decisions are not as financially obvious as for renters, but with the spring market now here, it’s time for them to ask themselves whether they really need to move.

Flat housing prices are probably one of the biggest incentives for people to just stay put.

• Email: gmarr@postmedia.com

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