Property Transfer Tax (British Columbia) – The tax rate is one per cent on the first $200,000 of the property's fair market value and two per cent on the remaining fair market value.
Goods and Services Tax (British Columbia) – The 5% GST applies to the purchase price of newly-constructed and substantially renovated homes. In addition, a temporary transition tax of 2% may apply on the purchase price of a new home where construction or substantial renovation of the new home was at least 10% complete before April 1, 2013, and either possession or ownership of the new home transfers, or a deemed sale of the new home transfers, before April 1, 2015.
For more information, visit the Government of British Columbia’s Property Taxation Branch’s website at www.rev.gov.bc.ca/rpt and Canada Revenue Agency website at www.cra-arc.gc.ca.
When it comes to buying real estate in Canada, it is important to receive advice from a real estate agent, lawyer and accountant who specialize in the area in which you want to live.
If you plan to stay in Canada for 6 months or less each year, the government considers you a non-resident, which means that you can still open a bank account and buy property, but if you plan to live in Canada for more than 6 months per year, you must apply for immigrant status.
The bottom line is that buying real estate in Canada is very easy.
As a Canadian resident, financing is typically available at 75% of the purchase price for a primary residence over a 25-year term. For a non-resident, the ratio is generally 65% mortgage and 35% as a down payment. Qualifying for the mortgage financing is probably the same as in other countries - interviews via phone, fax, e-mail to gather personal information which includes assets/liabilities, employment and/or income information. Each borrower's application will be considered on a case-by-case basis. Your realtor will be able to advise you on suitable mortgage brokers.
The mortgage approval may take approximately 24-48 hours after application and documentation has been submitted to the lender. The documentation generally required is income verification, tax returns, credit bureau or bank's report (letter from borrower's own bank stating that all accounts are in good standing to date), down payment confirmation via bank statements, copy of 2 pieces of ID and real estate appraisal. Foreign banks cannot register mortgages in Canada, so any mortgage would have to be raised via a Canadian mortgage broker.
The borrower will require the services of a Canadian lawyer or notary public to prepare the mortgage documents and registration at the Land Titles office. Documents can be couriered outside Canada for signing - this will need to be arranged with the lawyer and lender well in advance of the completion date.
Appraisal Fee Your lender may require a property appraisal at your expense. The cost is between $150-$250.
Survey Fee Your lender will require an up-to-date survey. If the Seller does not have one, you will have to pay to have one done. This can be approximately $150-$350.
Lawyer's Fees Lawyers review the Offer to Purchase, search the title, draw up mortgage documents and tend to the closing details. The fee will be approximately $500-$800. This amount varies between Provinces depending on the complexity of the sale and the type of property.
Home Inspection Fee is usually around $450.
Property Insurance which covers the replacement value of the structure of your home and its contents.
Service Charges can be in the region of $35-$50 to hook up new services and utilities.
Condominium (Strata) Fees are charged monthly and cover building insurance and maintenance. The building’s property manager will provide you with the fee. For a newly built condo worth $250,000, expect to pay approximately $200 per month (this varies from building to building).
Buying real estate in Canada is very easy. There are neither restrictions to purchase real estate in Canada, nor are there extra fees or tax implications payable at the time of purchase and closing.
All of the services required for non-residents of Canada are available locally to ensure a safe and stress free investment.
Once we find you a home or condo that you would like to purchase, you will be represented with my professionalism where I will then enter into a negotiation with the seller and write up a Contract of Purchase and Sale where it will then be presented on your behalf. This contract will have several subject clauses to benefit you such as subject to inspection and subject to financing which will allow you time to review the property and secure the necessary financing.
When subject clauses are removed, (typically 5 business days) it becomes a firm contract and a 5% deposit is required and held in trust until the completion date.
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