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Residential Real Estate in British
Columbia
Purchaser
Seller
What does a lawyer do for a seller on
the sale of property?
Is there any special provisions to be done on a sale by a
non-resident seller?
I am
buying a property, what are closing costs?
Closing costs are additional monies required to close the purchase
transaction over and above the purchase price and include legal fees
and disbursements, adjustment for pre-paid property taxes, Property
Transfer Tax (if applicable), Title Insurance/Survey (if applicable)
pre-paid utilities (if applicable) and pre-paid strata fees (if
applicable).
What is the
Property Transfer Tax?
Property Transfer Tax is a Provincial tax applied against the
purchase of real estate in the Province of British Columbia at the
rate of 1% on the first $200,000.00 of the purchase price and 2% on
the balance.
As a First Time Home Buyer, am I exempt from paying the Property
Transfer Tax?
First Time Homebuyer’s are exempt from paying the Property Transfer
Tax if they meet the following criteria:
-
Buyer must not have owned a principle
residence anywhere in the world;
-
Buyer must be a Canadian Citizen or
Permanent Resident of Canada;
-
Buyer must have resided in BC for at
least 12 months or filed income tax returns as a resident of BC
for 2 of the 6 taxation years immediately prior to the
registration of the transfer;
-
Buyer must borrow at least 70% of the
purchase price for a term of at least one year;
-
Buyer must not pay off more than
$13,000.00 off his/her mortgage in the first year;
-
Exemption on applies to properties
with a purchase price of $350,000.00 or less. A partial exemption
is available for properties with a purchase price between
$350,000.00 and $400,000.00.
What about GST will I have to pay GST on my purchase of
property?
GST will not be payable on pre-owned residential property provided
that it has not been substantially renovated, but will apply to new
construction property. A buyer can claim a GST rebate on new
construction property resulting in up to a maximum of 36% reduction
on the GST payable if they meet program guidelines.
Why a lawyer over a
Notary?
A lawyer has many more years of formal legal training than a Notary.
A lawyer is able to understand the complexities of other areas of
the law which may become relevant in a real estate transaction. You
obtain all of this knowledge often at a fee charge that will be
competitive with that of a Notary.
Selling
What does a lawyer do for a seller on the sale of property?
A lawyer will do the following:
-review the documents and trust conditions prepared by the buyer’s
lawyer;
-review the Statement of Adjustments to ensure that the Seller is
properly credited for prepaid tax and other relevant adjustments;
-order payout statement from bank and review;
-make sure that the mortgage on title is paid off on time (if
applicable) to stop interest from accruing and to provide proper
title to the buyer;
-Disburse funds to the Seller on the Closing Date.
Is there any special provisions to be done on a sale by a
non-resident seller?
Yes, the non-resident seller is required to provide a clearance
certificate from Revenue Canada indicating that they have paid the
required Canadian taxes on the property disposition. Typically, a
25% hold back of the sale funds is made until a certificate from
Revenue Canada is provided. I work with the seller and the seller’s
account to ensure that the clearance certificate is obtained as soon
as possible.
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