Purchasing a Property: What Are the Associated Costs and Fees for Buyers?
Associated Costs for Buyers:
- Costs of Mortgage including:
a. Mortgage company’s lawyer/notary
b. Appraisal (if applicable)
c. Land Title Registration fees
- Fire Insurance Premium
- Lawyer or Notary Fees & Expenses
a. Searching title
b. Investigating title
c. Drafting documents
d. Land Title Registration fees
b. Property Tax Adjustment
c. Property Purchase Tax
- Strata maintenance fees (if property is part of a strata corporation)
- Survey Certificate (if required)
There are fees associated with buying property anywhere in world. Here is a brief summary of the fees associated with buying a property in Whistler, as well as some costs of which non-residents should be aware.
- Property Transfer Tax: This is a Provincial Government Tax that applies to all transfers of real estate and is payable on the completion date. The amount of payable tax is based on the fair market value of the land plus improvements (e.g. buildings) on the date of registration unless you purchase a pre-sold strata unit. The tax is charged at a rate of:
- 1% on the first $200,000,
- 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000, and
- 3% on the portion of the fair market value greater than $2,000,000.
- Goods and Services Tax: The GST is a 5% tax that applies to the purchase of new construction and on the resale of accommodations that have been rented out for short term or nightly rental. The payment of the GST can be deferred if the new purchaser intends to use the accommodation for short term or nightly rental at least 90% of the time and s/he becomes a GST registrant.
- Tourism Whistler Assessment Fees: These are quarterly fees payable to Tourism Whistler on certain properties designated as located in “Town Centre” and are calculated based on the number of bed units (one bedroom equals two bed units) in the accommodation. If you are using the accommodation for personal use only and it is not available for rental more than 14 days a year, you may apply to pay a lower rate of this fee. To find out if Tourism Whistler fees are applicable to the property you wish to purchase, please contact your friendly RE/MAX Sea to Sky Real Estate REALTOR®.
- Insurance: Buyers are required to arrange insurance on single family residential accommodations, and liability and contents insurance on strata-titled properties.
- Condominiums: Of special concern to condominium purchasers, there will be monthly maintenance charges, and the Strata Corporation is also entitled to levy special assessments for extraordinary expenses if necessary.
Potential Additional Costs and Important Details for Non-Residents
The above fees also apply to non-residents of Canada, however here are a few details that should also be understood:
- Withholding Tax on Rental Income: You may obtain an exemption from the 25% non-residents are required to pay to Revenue Canada by completing an NR6 form, if the projected rental income is less than the anticipated expenses associated with the property. After completing this form, you must also file a tax return with Revenue Canada.
- Execution of Mortgage Documents: Once the borrower has signed a commitment letter with the lender, the lender will instruct a lawyer or notary to draw the mortgage security. These documents must be couriered to the borrower for their execution in the presence of a notary public. What this means to the buyer is simply that sufficient time be allowed to courier the documents. Fax, email or other methods of transmission are not allowed in this case.
- Methods of Payment: It is recommended that the purchaser open a bank account in Whistler for the transfer of funds. The balance of the purchase price must be paid by certified cheque, bank draft or transfer in Canadian funds. Since exchange rates fluctuate from institution to institution, from day to day, and depending on the amount to be exchanged, it is important to research this before the completion date.
- Completing the Transaction: It is critical to complete transactions on the designated completion date in British Columbia. The vendor has the option of cancelling the contract of Purchase and Sale should the funds not be paid on the stipulated completion date, and depending on the circumstances, they may be entitled to retain the deposit.