REAL ESTATE LAW
Closing Date and Title Transfer
Once all subjects have been removed, both the buyer and seller are confident that the transaction will proceed to completion. This is when you’ll typically see the “SOLD” sign go up. This is a great time for that family photo!
What is a Closing Date?
The Closing Date is the day the purchase is completed. On this date, your lawyer transfers the purchase funds and completes the transfer of your ownership interest.
For most purchases, the Closing Date is just before Possession Day, when you actually get the keys and move into your new home.
Why Do We Recommend Taking Possession the Next Day?
Your lawyer has until the end of the Closing Date to complete the legal and financial steps required to finalize the transaction. Because of this, we generally recommend scheduling your Possession Date for the following day.
This gives your legal team time to complete the transaction and helps avoid unnecessary stress or delays on moving day.
Tip: When planning your move, keep your Closing Date and Possession Date separate. Closing is when the transaction is completed; Possession is when you can take occupancy and get the keys.
Some costs you may not be aware of if you are a first-time home buyer:
Purchasing Property Transfer Tax (PTT)
Property Transfer Tax (PTT) is an important cost to consider when buying a home in British Columbia. While some buyers may qualify for an exemption, being a first-time home buyer does not automatically mean you will pay no PTT.
Do You Qualify for the First-Time Home Buyer Exemption?
To qualify, you must meet several requirements. Among other things, you must:
- Be a Canadian citizen or permanent resident on the date of registration.
- Have either continuously lived in B.C. for at least 12 months immediately before the registration date, or have filed B.C. income tax returns as a B.C. resident in at least 2 of the 6 years immediately before the registration date.
- Have never previously owned a registered interest in a principal residence anywhere in the world.
- Have never previously received a B.C. first-time home buyer exemption or refund.
- Meet the other requirements of the First Time Home Buyers’ Program.
Property value limits also apply to the exemption. For current limits and eligibility requirements, please review the B.C. government’s information before assuming you qualify.
Check this link for more information on the PTT exemptions.
How Much Is Property Transfer Tax?
If PTT applies to your purchase, the general rates are:
| Purchase Price | PTT Rate |
|---|---|
| First $200,000 | 1% |
| $200,001 – $2,000,000 | 2% |
| Over $2,000,000 | 3% |
For example, if you purchase a home for $425,000, the PTT would be $6,500:
- 1% of the first $200,000 = $2,000
- 2% of the remaining $225,000 = $4,500
- Total PTT = $6,500
Have Questions About Your Closing Costs?
Property Transfer Tax can be a significant expense if you are not expecting it. Alexander Stewart Lawyers can help you understand the taxes, exemptions, and other costs that may apply to your purchase, and help ensure you are prepared for closing.
Planning to buy? Contact Alexander Stewart Lawyers early in the process. We can help you understand what to expect and guide you through the legal side of your purchase from contract to closing.
Goods and Sales Tax (GST) on New Homes
GST generally applies when you purchase a newly built or substantially renovated home. The first person to occupy the home usually pays the GST, although some new homes may qualify for an exemption or rebate.
The GST rate is 5%. If you purchase the home as your principal residence, you may qualify for a GST rebate.
- If the purchase price is $350,000 or less, you may qualify for a rebate of up to 36% of the GST.
- If the purchase price falls between $350,000 and $450,000, the rebate decreases proportionally as the purchase price increases.
- If the purchase price reaches $450,000 or more, you cannot claim the standard new housing GST rebate.
Recent changes to the federal GST rules may also provide a full GST rebate for qualifying new homes, subject to specific eligibility requirements and price limits.
GST rules and rebate programs can be complicated, and they can have a significant impact on your closing costs. Contact Alexander Stewart Lawyers early in the process so we can help you understand whether GST, an exemption, or a rebate applies to your purchase.
REAL ESTATE LAW
Purchasing On-reserve Property (ex. Sun Rivers, Talasa, or Sienna Ridge)
Purchasing a property on reserve is a little different from buying a typical property. There are a few important differences to be aware of before you proceed.
Your Purchase Is a Leasehold Interest
Properties on reserve, such as in Sun Rivers, Kamloops, are not registered through the provincial Land Title Office in the same way as most properties in British Columbia. Instead, you are purchasing a leasehold interest, which the federal government registers through Indigenous Services Canada.
Property Taxes and Voting
Sun Rivers is located on Tk’emlúps te Secwépemc reserve land, outside the municipal boundaries of the City of Kamloops. As a result, property taxes are paid to Tk’emlúps te Secwépemc, rather than to the City of Kamloops.
Because the property is not within the City of Kamloops, property owners at Sun Rivers also do not vote in municipal elections. Property owners who are not eligible members of Tk’emlúps te Secwépemc are also not eligible to vote in the Band’s elections.
Gap Insurance
Registering a leasehold interest with the federal government can take some time. Because of this, most lenders require Gap Insurance as part of the transaction.
Gap Insurance protects your financial interest during the period between the Closing Date and the date your leasehold interest is officially registered. If something unexpected happens during this period, the insurance is designed to protect you from losing your investment.
Additional Steps and Costs
Purchasing at Sun Rivers can involve additional administrative steps compared with a conventional real estate transaction. For example, we may need to prepare additional copies of documents and make additional trips to the Tk’emlúps te Secwépemc Land, Leasing and Taxation Office. These additional requirements can result in some extra costs.
Important: Please Tell Us About Your Travel Plans
You will need to sign legal documents as part of the purchase and closing process. If you expect to be away before the Closing Date, please let us know as soon as possible so we can make appropriate arrangements.
