The purchase of a home is possibly the largest financial investment you will make in your lifetime. It doesn't matter if this is your first home or you are an experienced investor; the process can be stressful. Choosing an experienced REALTOR® that you are comfortable with to guide you through the process will help ensure an enjoyable experience.
Your First Step
Your first step to buying a home is to first ask yourself why you want to buy a home: to stop paying rent? To start building equity? To have a place of your own? To raise a family? To move up to a bigger house?
Next, list what kind of home you'd like and where you would like to be. Be specific. Separate the "must haves" from the "want to haves."
Think of yourself as zeroing in on a target, going from the general to the specific. Consider area; community; neighborhood (older and settled or sparkling new; a particular school zone; recreational facilities; and other community services such as transportation, childcare, shopping, groceries, yoga, entertainment). Ask yourself how many minutes you are willing to commute to work?
Think about home styles. How much space do you need? Does your situation require a one-level home, or are stairs acceptable?
Consider the size and kind of property. Do you want a newer home, or maybe an older one to fix up? Someday you or your heirs will want to sell. Consider how long you expect to live in this particular home.
First Time Home Buyers Program
The First Time Home Buyers' Program reduces or eliminates the amount of property transfer tax you pay when you purchase your first home. If you qualify for the program, you may be eligible for either a full or partial exemption from the tax.
The first step - Ensure you qualify!
To qualify for a full exemption, at the time the property is registered you must:
Have lived in B.C. for 12 consecutive months immediately before the date you register the property or filed at least 2 income tax returns as a B.C. resident in the last 6 years
Have never owned an interest in a principal residence anywhere in the world at any time
Have never received a first time home buyers' exemption or refund
The property must:
Be located in B.C.
Only be used as your principal residence
Have a fair market value of:
$475,000 or less if registered on or before February 21, 2017, or
$500,000 or less if registered on or after February 22, 2017
Be 0.5 hectares (1.24 acres) or smaller
A home inspection is a comprehensive visual examination of the home you are about to purchase. It goes over the overall structure, major systems and components. A home inspector will review your house and identify components that are not performing properly, as well as items that are beyond their useful life or are unsafe.
Do I need a home inspection?
A home inspection means fewer surprises. No one wants to face serious costs shortly after purchasing a home. Generally, when viewing a home, we don't get the opportunity to explore the crawl space or the attic when viewing a home.
A subject to home inspection is a standard clause in most offers. It will help you gain an understanding of the home, it's operating systems, and future required maintenance.
For First Time Buyers, mortgage advice and information is not just important, it is critical.
Timely, accurate mortgage advice & the right products to select from, will boost the enjoyment of the purchase of your family home or investment. There’s no reason to rush the purchase of your first home — remember, it’s an investment in your lifestyle!
As a Repeat Buyer, you need to know what your options are extensive. With a changing mortgage marketplace, you need to be kept up to date so you can make a decision that’s tailored to your current situation with the flexibility that you require.
Mortgage Calculator Link - Click Here
Rent or Buyer
Should you rent or should you buy your home? It takes more than looking at your mortgage payment to answer this question. The first steps in buying a house are ensuring you can afford to place at least 5% of the purchase price of the home as a down payment and determining your budget.
This calculator helps you weed through the fees, taxes and monthly payments to help you make a good financial decision.
Fixed or Variable Mortgage
Buyers often ask what type of mortgage they should get:
Check out this Video
Fixed-rate mortgages often appeal to clients who want stability in their payments, manage a tight monthly budget, or are generally more conservative. For example, young couples with large mortgages relative to their income might be better off opting for the peace of mind that a fixed-rate brings.
A variable rate mortgage often allows the borrower to take advantage of lower rates – the interest rate is calculated on an ongoing basis at a lenders’ prime rate minus or plus a set percentage.
For example, if the current prime mortgage rate is 5.5 percent, the holder of a prime minus 0.5 percent mortgage would pay a 5.00 percent variable interest rate.
As a consumer, the best option is to have a candid discussion with your mortgage professional to ensure you have a full understanding of the risks and rewards of each type of mortgage.
(CopyRight and Video to Dominion Lending)
Often home buyers think they should automatically sign the renewal. There are options. If you’re within six months of your mortgage renewal, or if your existing lender has sent you a renewal offer in the mail, please don’t just sign their offer, contact a broker or your bank and get a 2nd opinion.
Property Transfer Tax (A tax when purchasing a home in British Columbia, also referred to as PPT)
Property Transfer Tax or PTT is a tax on the transfer of ownership of properties in BC.
British Columbia’s Property Transfer Tax is payable on the fair market value as follows:
- 1% on the first $200,000.
- 2% between $200,000 and $2,000,000.
- 3% on the amount of the fair market value above $3,000,000.
- 5% on the fair market value above $3,000,000
What is the GST on Real Estate in BC?
The British Columbia Goods and Services Tax for real estate in BC is a 5% Federal Tax that is payable at completion of the sale of brand new properties in BC.
This means that GST is payable only on newly constructed properties such as a presale highrise condo sold by a developer, or an owner-builder home. (usually detached)
With regards to who is subject to paying GST, this also means that the assignment of contract purchased from another investor is subject to BC GST.
When is the GST due on a property?
GST is due at the time of completion, as per the contract of purchase and sale.
Your notary or lawyer will calculate this for you when they prepare the statement of adjustments in preparation for completion.
Assume the purchase price of a new home is $350,000 excluding G.S.T. The gross G.S.T. is $17,500 (5% of $350,000). The G.S.T. New Housing Rebate is 36% of $17,500 (5% GST), which is $6,300. Thus, the applicable G.S.T. is $17,500 (5%) less $6,300 (36% of 5% on $350,000), which equals $11,200. (GST payable after rebates)
For homes valued between $350,000.00 and $450,000.00, the rebate is gradually reduced and is calculated by using the following formula (get ready to brush up on your high school math):
$6,300 x [$450,000 – the purchase price] / $100,000
For example, assume the purchase price of a new home is $400,000 excluding G.S.T. The G.S.T. New Housing Rebate is
$6,300 x [$450,000 – $400,000.00] / $100,000 which equals $3,150. The gross G.S.T. would be 5% of $400,000.00, which equals $20,000.00, less the partial G.S.T. New Housing Rebate of $3,150.00, for a net tax of $16,850.00.
How does GST apply to used residential homes?
It doesn’t, if you are purchasing a resale property then you are NOT subject to GST.
GST on real estate in BC is not subject to used homes, as the first owner of the property would have already paid it.
GST Calculator Link