Closing costs for Buyers

1%  Property Purchase Tax
A successful purchase starts with budgeting for the closing costs. Not only do you have to plan to have enough to pay the lawyer or notary, but the 1% Property purchase tax is a big part of this as well. Most people must pay this tax, although first time home buyers may be exempt. Check this government link to see if you are exempt as a first time home buyer, CLICK HERE to see if you qualify or

Check for your costs if you are NOT a first time home buyer, CLICK HERE.
NOTE: The Property Purchase Tax (PPT) is a separate provincial tax on all property transfers. The GST is not the PPT. The cost NEW CONSTRUCTION real estate transactions only will add 5% GST to the transaction. The people of BC will be particularly affected since our province has some of the highest priced real estate in the country. Approximately 40% of all real estate transactions in BC involve sales priced over $400,000, the original threshold for an GST rebate.As the province transitions back to the PST, which will replace the HST effective April 1, 2013, measures to ease the HST burden on new home buyers, include:
  • The BC New Housing Rebate threshold will increase to $850,000 from $525,000, so that more than 90 percent of newly built homes will now be eligible for a
    provincial HST rebate effective April 1, 2012.
  • The maximum rebate will increase to $42,500 from $26,250 effective April 1, 2012 .
  • Buyers of new secondary vacation or recreational homes outside the Greater Vancouver and Capital Regional Districts priced up to $850,000 will be eligible
    to claim a provincial grant of up to $42,500 effective April 1, 2012.
  • For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the 7 per cent provincial portion   of the HST. Instead, purchasers will pay the 5 per cent GST and may pay a temporary 2 per cent BC Transition Tax on the full price of the home. 
The BC Transition Tax will help ensure that whenever purchasers buy a new home they will all pay a consistent and equitable amount of tax, whether the home is built:
  • entirely under the HST;
  • entirely under the PST; or
  • partly under HST and partly under the PST.
The BC Transition Tax will be in place until March 31, 2015. The tax only applies to homes where construction is at least 10 per cent complete as of April 1, 2013. CLICK HERE to read more 

Lender (Appraiser) A bank is not just a bank. Having the right backer can be extremely important – it is your money we’re talking about after all! Make sure that your lender and financial representative is someone with whom you feel comfortable, and be wary of any lender who promises you more than you think you can reasonably afford. Your lenders may or may not require an independent appraisal, and typically will make arrangements for the appraisal themselves. Also a Mortgage Broker sometimes might just be a good alternative to a bank for financing, but always compare rates first. 

Lawyer or Notary. Your home purchase is far too important a transaction to skimp on legal representation at the risk of leaving yourself open to costly future issues.
Find a lawyer or notary who is willing to take the time to answer your questions and who specializes in real estate law. Look at these web sites to select a lawyer or notary for your area: NOTARIES and LAW SOCIETY 

Home InspectorNo home inspection is 100% guaranteed, but a few hundred dollars to catch a major problem now is certainly better than many thousands to correct that ‘surprise’ down the road.
Take a look at the Canadian Home Inspectors web site for a list of home inspectors in your area: Home Inspectors

Contractor Planning some renovations? You’re not the only one! The home renovation industry is booming, and in some markets, booking a contractor must be done months in advance (that’s a long time to go without a kitchen). Don’t let finding the right contractor slip through the cracks – planning ahead will almost certainly make your renovation smoother, and you contractor will appreciate the advance notice. Not a bad idea to check the Better Business 

The information contained on this page is deemed to be correct and from reliable sources, however it is advisable to verify if necessary as laws are subject to change. 
Copyright © Donna Fuller

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