The following real estate related frequently asked questions (FAQs) are provided by Real Estate Board of Greater Vancouver (REBGV), Real Estate Council of British Columbia (RECBC), the CRA, and personal experience. While the information provided in this site has been provided with due care, these questions and answers may change from time to time. Kindly refer to the original source (REBGV.org, RECBC.ca, and cra-arc.gc.ca).

Wise real estate decisions are made when you have a clear understanding of your personal financial circumstances. When assessing your situation, it is important to know there is a broad range of cost-saving programs available to help you.

*Updated: August 2016

Top Grants and Rebates (updated June 2016) – PDF
50 Ways to Green Your Home and Save $$$ (updated July 2014) – PDF                                               

Home Buyers’ Plan: Registered Retirement Savings for down payments
Canada Revenue Agency’s Home Buyers’ Plan lets qualifying home buyers use up to $25,000 of their Registered Retirement Savings Plan (RRSP) to buy a home. Couples can use up to $50,000. The home must be the principal residence, the home buyers must not have owned a home within the past five years and the loan must be repaid within 15 years.

Home buyers who have already used the plan and have fully repaid their RRSP may be eligible to use the plan a second time.

Disabled home buyers upgrading to a more accessible home also qualify as do relatives helping disabled home buyers.

Canada Revenue Agency
For information:
Home Buyers’ Plan
1-800-959-8287
First-Time Home Buyers’ Tax Credit
Eligible individuals who bought a qualifying home in 2015 can claim the home buyers’ amount of $5,000 on line 369 of Schedule 1 when filing their 2015 income tax and benefit returns. For 2015, the maximum home buyers’ tax credit is $750, which is calculated by muliplying the home buyers’ amount of $5,000 by the federal non-refundable tax credit rate of 15% (equal to the lowest personal income tax rate for the year.)

 

Canada Revenue Agency
For information:
www.cra.gc.ca/hbtc
1-800-959-8281
GST Rebate on new homes
New home buyers can apply for a rebate of the 5% GST if the purchase price is $350,000 or less. The rebate is equal to 36% of the GST to a maximum rebate of $6,300. There is a proportional GST rebate for new homes costing between $350,000 and $450,000. There is no rebate for homes priced at $450,000 and above. Canada Revenue Agency
For information:
GST- New housing rebate
1-800-959-8287
BC Property Transfer Tax (PTT)
Home buyers in BC pay a provincial Property Transfer Tax (PPT) when they buy a home. The tax is charged at a rate of 1% on the first $200,000 of the purchase price and 2% on the remainder, up to a maximuim of $475,000.

First-time home buyers may be exempt from paying the PTT. There is a proportional exemption for homes priced between $475,000 and $500,000. At $500,000 and above the rebate is nil.

Qualified buyers of new homes may be exempt from paying the PTT on a newly built home or newly subdivided unit priced up to $750,000, saving buyers up to $13,000; and a partial exepmption on  newly built homes priced $750,000 to $800,000. Learn more

BC Ministry of Finance
For information:
Property Transfer Tax
250-387-0604
BC property tax deferment programs
Seniors
Qualifying low income home owners aged 55+ may be eligible to defer property taxes.Financial hardship
Qualifying home owners may be eligible to defer property taxes.Families with children
Qualifying home owners who financially support children under age 18 may be eligible to defer property taxes.
BC Ministry of Finance
For information:
Property tax deferment programs
and enter ‘Property tax deferment’ in the search box or contact your municipal tax office.
1-888-355-2700
BC Home Owner Grant
Reduces property taxes for home owners with an assessed value of up to $1,200,000. The basic grant gives home owners:

• a maximum reduction of $570 in property taxes on principal residences in the Capital, Greater Vancouver, and Fraser Valley regional districts
• an additional grant of $200 to rural homeowners elsewhere in the province
• an additional grant of $275 to seniors aged 65+, those who are permanently disabled, and verterans of certain wars

For information:
Home Owner Grant
Or contact your local municipal tax office.
Home Adaptations for Independence (HAFI)
A program jointly funded by federal and provincial governments provides up to $20,000 to help eligible low-income seniors and disabled home owners and landlords finance modifications to their homes to make them accessible and safer. For information:
BC Housing
604-433-2218
1-800-257-7756
BC Seniors’ Home Renovation Tax Credit
Assists eligible seniors 65+ with the cost of certain permanent home renovations to a principal residence to improve accessibility or help a senior be more mobile at home. The maximum amount of the refundable credit is $1,000 per tax year and is calculated as 10% of the qualifying renovation expense (maximum $10,000). For information:
BC Government
Canada Revenue Agency
1-800-959-8281
Rain barrel subsidy programs
Many Metro Vancouver municipalities offer rain barrels for sale, often at a discount for their residents:
Burnaby – $70
Coquitlam – $72
Richmond – $30
West Vancouver – $55Other municipalities may have similar offers.
For information:

Burnaby
Coquitlam
Richmond
West Vancouver

Local government water conservation incentives
Your municipality may provide grants and incentives to residents to help save water.

ToiletsNorth Vancouver District and District of West Vancouver offer a $50 rebate when residents install a low-flush toilet. Richmond offers a $100 utility rebate.

Clothes washers: replace your old clothes washer with a new, high efficiency ENERGY STAR clothes washer and receive a $100 or $200 rebate from Richmond.

For information:
Visit your municipality’s website and enter ‘toilet rebate’ to see if there is a program.
Local government water meter programs
Your municipality may provide a program for voluntary water metering so that you pay only for the amount of water you use. Burnaby (scroll down), Delta, Richmond and West Vancouver have programs and other municipalities may soon follow. For information:
Visit your municipality’s website and enter ‘water meter’ to see if there is a program.
Water saving kits
Many Metro Vancouver municipalities offer water saving kits and other tools for reducing home water consumption including Burnaby, Coquitlam, and Delta. For information:
Burnaby
Coquitlam
Delta
Leaders in Energy Management Program
Partners BC Hydro with BC’s largest commercial, government and institutional customers (who spend $200,000 or more/year on hydro). Customers gain access to energy management programs, tools and incentives. For information:
BC Hydro
1-866-522-4713
Business Energy Saving Incentives
Provides financial incentives to organizations that replace inefficient technologies with energy efficient technologies. For information:
BC Hydro
1-866-522-4713
FortisBC new home energy rebate offer
FortisBC and BC Hydro customers can receive rebates when building ENERGY STAR new homes or installing high-efficiency natural gas fireplaces. For information:
FortisBC
FortisBC rebate program for homes
Rebates for home owners include:
• $300 rebate for buying an EnerChoice fireplace
• up to $1,800 off an ENERGY STAR water heater
• $1,000 rebate for switching to natural gas (from oil or propane) and installing an ENERGY STAR heating systemTotal value of available rebates: $5,300 per household.
For information:
Fortis BC
1-800-663-8400
FortisBC rebate program for businesses
For commercial buildings, provides:
• up to $45,000 for the purchase of an energy efficient boiler
• up to $15,000 for the purchase of a high-efficiency water heater
• funding towards a new construction energy study
For information:
Fortis BC
1 800-663-8400
Energy Conservaton and Assistance Program
BC Hydro and FortisBC offer free energy assessments and energy saving products to income-qualifying households. Qualified contractors will install upgrades ranging in value from $300 to $5,000 depending on the need of the home. For information:
BC Hydro
FortisBC
Energy savings kits
BC Hydro and FortisBC offer low-income customers a free energy saving kit containing products to help save energy and money. For information:
BC Hydro
FortisBC
Home Energy Rebate Offer
BC Hydro and FortisBC offer home owners rebates for upgrades and improvements, including insulation, draftproofing, space and water heating systems and ventilation to reduce the average customer’s energy bill by 30%. For information:
FortisBC
1-877-740-0055
Smart Thermostat Pilot Program
The City of Vancouver and Vancity are offering a $125 rebate for a home owner purchasing 1 of 3 smart thermostats that automatically controls the climate in your home. This pilot program runs to December 2016. For information:
City of Vancouver
Financial institutions – energy-related savings
RBC’s Energy Saver Mortgage
Home owners who have a home energy audit within 90 days of receiving a RBC Energy Saver Mortgage may qualify for a rebate of $300 to their RBC account.RBC’s Energy Saver Loan
Offers a 1% interest rate discount or a $100 rebate on a home energy audit with a qualifying purchase through a fixed rate loan over $5,000.BMO Eco Smart Mortgage
Offers home buyers a special rate on qualifying green properties.Vancity Home Energy Loan
Offers home owners up to $50,000 at prime + 1% for up to 15 years for energy efficient renovations.

CMHC Mortgage Loan Insurance Premium Refund
Provides home buyers with CMHC mortgage insurance, a 10% premium refund and possible extendedamortization without surcharge when buyers purchase an energy efficient home or make energy savings renovations.

For information visit your financial institution or
RBC- mortgage 1-800-769-2511
RBC- loan
BMO
Vancity
CMHC  1-800-668-2642
or 604-731-5733

It’s easy to count your available cash, but remember that all of these cash savings cannot be used as your down-payment. There are last-minute costs, such as taxes, legal fees, appraisal fees, moving expenses, and home insurance to pay before you are finally in your new home. The time to budget for those “end” expenses is now. You must be prepared to pay most, and perhaps all, of the following closing costs.

Property Transfer Tax (PTT) – The British Columbia Provincial Government imposes a property transfer tax, which must be paid before any home can be legally transferred to a new owner. Some buyers may be exempt from this tax.

Home buyers in BC pay a provincial Property Transfer Tax (PTT) when they buy a home.

The PTT is charged on the fair market value of a property at a rate of:

  • 1% on the first $200,000
  • 2% on the balance up to and including $2,000,000
  • 3% on the balance greater than $2,000,000

Qualifying first-time home buyers may be exempt from paying the PTT if the purchase price of their home is priced up to $475,000. There is a proportional exemption for homes priced between $475,000 and $500,000. At $500,000 and above the rebate is nil.

Qualifying buyers of new homes may be exempt if the purchase price of their home is priced up to $750,000. There is a proportional exemption for homes priced between $750,000 and $800,000. At $800,000 and above there’s no rebate.

Click here for the Property Transfer Tax fact sheet.

Goods & Services Tax (GST) – If you purchase a newly constructed home, you may be subject to GST on the purchase price. There may be some rebates available depending on the value of the home.

The GST on a new home is 5% of the price. A GST rebate equivalent to 36% of the GST paid is available for new homes priced up to $350,000 and a partial rebate on new homes priced up to $450,000.

Buyers also pay the GST on fees for services from appraisers, home inspectors, lawyers, Notary Publics and REALTORS®.

Provincial Sales Tax (PST) – The PST is generally not payable on services except for legal and notary fees.  Both the GST and PST are paid on legal and notary fees.

Property Tax – If the current owners have already paid the full year’s property taxes to the municipality, you will have to reimburse them for your share of the year’s taxes.  See also Why do I have to pay property taxes on the house I’m buying.

Appraisal Fee – When the lending institution requires an appraisal of the home before approving your loan, it may be your responsibility to pay the appraiser’s fee.  The fee ranges from $300 to $450 plus GST.

Survey Fee – The lending institution may also require that a survey certificate be presented to them. The purpose of the survey is to formally establish the boundaries of the property and to ensure that all buildings are within those boundaries.
Note: Lending institutions may ask for either a building location survey, which establishes where a building is located on a property, or a monumental survey, which establishes the actual boundaries of a property. If the current owner cannot provide a recent survey certificate, it will be your responsibility to pay the surveyor’s fee.

Mortgage Application Fee – Lending institutions may charge a mortgage application fee. This application fee may vary between lending institutions.

Don’t forget about last minute costs

Mortgage Default Insurance – This type of insurance is required on most mortgage loans in excess of 75% of the appraised home value. Its purpose is to ensure that the lender will not lose any money if you cannot make your mortgage payments and the value of your home is not sufficient to repay your mortgage debt. The insurance premium is paid to the lender and, in most cases, is added to the loan amount and paid for over the term of the loan.

As of February 15, 2016, the federal government requires a 10 per cent down payment requirement on homes valued at $500,000 – $1 million, that need mortgage insurance. Homes valued at $1 million+ require a minimum down payment of 20 per cent. Mortgage insurance is not available for homes in this price range. Learn more

Rent and security deposits –  If there is a secondary suite or a laneway home rental and the tenancy continues, the buyer receives the security deposit from the seller with accrued interest because the buyer is responsible for reimbursement when the tenant leaves.

Land survey fees  – Lenders may requie a survey of the property. The fee ranges and is typically $500 plus GST.

Life & Disability Mortgage Insurance – At your option, you may purchase insurance which will ensure that your outstanding mortgage balance is paid if you die or become disabled.

Fire & Liability Insurance – The mortgage lender will insist that you purchase an insurance policy which guarantees that, in the event of fire, the lender will receive the balance owing on the mortgage loan before you receive any insurance proceeds.

Legal Fees – The transfer of home ownership from the seller to the buyer must be recorded in the Land Title and Survey Authority Office in order to protect the new owner’s interests.

You will probably want to engage a lawyer or notary public to act on your behalf during the completion of your purchase. The lawyer or notary public will charge a fee for this service, plus disbursements, including the Land Title Registration fee. If you are financing your purchase with a new mortgage loan, there will be a further fee and disbursements to prepare and register the mortgage documents.

Likely fees include:

  • title search for a property, this costs up to $11
  • land title registration fee, which is about $75

For more information about land titles, visit the Land Title and Survey Authority of BC at www.ltsa.ca.

Other last-minute costs you shouldn’t forget to set some money aside for:

  • home inspection fees (varying $500-$900)
  • moving expenses
  • utility hook ups
  • locks
  • Strata maintenance fees
  • deposits required by utility companies
  • household goods:
    • kitchen appliances,
    • garden equipment,
    • garbage cans, tools, window coverings, etc.
  • redecorating or renovations

Based on Your Income:
A general guideline is to allow no more than 30% of your gross monthly income (before deductions) to make your monthly housing payments. This test of your ability to repay a mortgage loan is generally referred to as the Gross Debt Service Ratio.

Complete the following calculation to determine the approximate amount you may be able to afford for the mortgage payment, the property taxes and, where applicable, 50% of the strata maintenance fees. Some lenders will require that this total maximum monthly payment also covers heating costs.

  • Your gross monthly income $___
  • Co-signor’s gross monthly income (if applicable) $_____
  • Other income (monthly) $______
  • Total monthly income $______
  • Multiply the Total line above by 30% to calculate your: Total monthly maximum housing payment $______


Based on your Other Financial Obligations:

If you have other monthly financial obligations, such as car or credit card payments, the lending institution will also apply the Total Debt Service Ratio test to determine the maximum mortgage loan for which you can qualify.

$ ____ Your monthly housing payment
$ ____ Your calculated monthly debt payments (car, credit card, etc.)
$ ____ Total monthly payment

A general guideline should be that the total of your monthly housing payment added to your other monthly debt payments should not exceed 40% of your monthly gross income.

The Gross Debt Service Ratio and the Total Debt Service Ratio tests protect both you and the lender by ensuring that you do not take on more debt that you can reasonably afford to repay.

Many lending institutions will prequalify you for a specific size and type of mortgage loan before you begin searching for your new home. Taking the time to apply for a pre-approved mortgage will give you the security of knowing how much you can afford to spend.

Before concluding the loan agreement, most lending institutions will require an appraisal of your selected home. The appraised value is a professional opinion of the value of the home and may differ from the purchase price you are willing to pay. The appraised value may affect the approved value of the loan.

Most mortgage loan contracts only permit the regular payments to continue for a specified term which is shorter than the amortization period. The term can be as short as six months or it can be five years or more.

At the end of the term, you are required to repay the full unpaid balance. If you don’t have the cash required to pay the balance, it may be necessary to refinance the loan.

Deciding on the length of term you want will depend partly on whether you think interest rates will go up or down. Keep in mind that the longer the term you choose, the longer your monthly payment remains stable.

CAUTION: The lender is not obligated to renew your mortgage loan at the end of the term.

Typically, the size of a mortgage loan payment is calculated as if the loan payments were going to be paid over 20 or 25 years. This is called the amortization period. Each payment will repay the interest due up to the payment date along with some of the principal owed. The longer the amortization period you choose, the lower the regular payment will be. Keep in mind that the faster you repay any money borrowed by choosing a shorter amortization period, the more you reduce the total cost of borrowing.

There are two basic types of mortgage loans:

  • A conventional mortgage loan allows you to borrow up to 75% of the purchase price or the appraised value of the home, whichever is less.
  • A high-ratio mortgage loan allows you to borrow more than 75% of the purchase price or the appraised value of the home, whichever is less. But the borrower must pay a mortgage default insurance premium to protect the lender if payments are not made. Check with your lender to find out the amount of the insurance premium.

Obtaining a loan to finance the purchase of your new home will probably require you to sign a document called a mortgage. This document will set out the terms and conditions for the loan and its repayment. If you fail to meet your debt obligations, the lender may have the right to claim your home to pay off what you still owe.

Almost everyone who purchases a home borrows some of the money needed to pay for it. The easiest way to determine how much money you will be able to borrow as a mortgage loan is to consult with one or more lending institutions. These lenders will apply standard tests, based on your family’s current income and debts, in order to decide the amount of money they will lend to you. They will ask for information about your finances and make a thorough credit check, in order to be sure you are able to repay a loan.

Lending institutions will usually require you to make a down-payment of at least 5% to 10% of the purchase price of the home. Lending institution policies may vary from time to time. However, as a general rule, you should make your cash down-payment as large as possible. Your deposit for the real estate transaction may form part of your down-payment.