Real Estate Glossary: I

Illegal View (Quebec)
Any exterior opening or opening in a structure or building that creates an illegal view of adjoining lands.

Income Approach – Evaluation
A step in the valuation process of an income property. The value is reached by estimating the annual income minus an allowance for vacancies and bad debts and then subtracting annual operating expenses, real estate taxes, and insurance premiums to obtain the net operating income. This is then converted by capitalization into a capital value.

Income Property
A property that is developed or improved for the purpose of generating income. Also referred to as “non-owner occupied property” or “rental property.”

Income-splitting
A financial strategy used for tax purposes to reduce the overall tax burden on a family. Income is shifted from one family member to another who is in a lower tax bracket, so the income is taxed at the lower rate to save the family money.

Income Statement
A statement that allows an individual to calculate his or her company’s pre-tax profits by subtracting total expenses from total revenues. Also referred to as a profit & loss statement.

Income Tax
A tax that is levied by the Federal Government and by some Provincial or Municipal Governments on the annual income of an individual or a company. The amount or percentage taxed is based on the amount of an individual’s earned and unearned income, using the government’s graduated tax scale.

Indirect costs
Additional expenses to be paid when buying an immovable, including building inspection, property evaluation, loan application, notary fees, taxes, insurance, etc.

Inflation
An increase in the level of prices or a decline in purchasing power, caused by an increase in available currency and credit beyond the goods and services that are available.

Informal Trust
An investment account registered in the name of an adult, but is in trust for a child. The trust is used to save or invest funds for a child who can access and use the funds when he or she reaches the legal age. Also known as in-trust account or “bare” trust.

Initial Interest Rate
The introductory interest rate on an adjustable-rate mortgage (ARM), which typically changes at a predetermined time.

Injunction
A court order that prohibits a party from taking a specific course of action.

Inspection
A house inspection involves a qualified expert examining the condition of a house and property. Typically, a home inspector will identify all necessary repairs.

Inspection Report
A formal written report detailing the examination of a property’s visible structure and internal systems. The inspection and report are done prior to the completion of a real estate transaction.

Installment
A payment made towards the settlement of a debt that is typically paid at regular intervals to the creditor or lender.

Intangible Asset
An asset such as a patent, permit, computer program, or claim that has no physical properties. It is difficult to assign values to these types of assets.

Intangible Property
Property such as stocks, bonds, or franchises that gets value from what it represents and not from its physical nature. Business furniture and equipment are examples of tangible personal property because they do not represent something else of greater value and they serve their intended functions.

Interest rate
Percentage representing the amount of interest produced by an amount of one hundred dollars. A 6.5% interest rate will produce an interest amount of $6.50 payable to the lender for every $100 borrowed. The interest rate is used to calculate the amount to be paid to the lender in exchange for financing to allow the buyer to purchase a property.

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