Real Estate Purchase and Sale

Real Estate Purchase & Sale information

Understanding the Property Transfer Tax (PTT) in BC—and How First-Time Buyers Can Save

/

If you're buying your first home in British Columbia, you've probably heard about the Property Transfer Tax (PTT). This is a tax you pay to the provincial government when you purchase property. It is separate from your down payment and it cannot be part of your mortgage. For many first-time buyers, it can be an unexpected expense.

Here's how PTT is calculated:

  • 1% on the first $200,000 of the home's price
  • 2% on the portion between $200,000 and $2 million
  • 3% on anything above $2 million

For example, if you're buying a $600,000 condo, your PTT would be approximately $10,000. That's a significant amount!

The Good News:

As a first-time home buyer, you might be eligible for a PTT exemption. 

Effective April 1, 2024, if your home has a fair market value of $835,000 or less, you may qualify for a full or partial exemption. Specifically:

  • Full exemption on the first $500,000 of the purchase price
  • Partial exemption for homes valued between $835,000 and $860,000

To qualify, you must:

  • Be a Canadian citizen or permanent resident
  • Have lived in BC for at least one year immediately before the registration date (typically the completion date)
  • Have never owned a principal residence anywhere any time in the world

To continue to qualify after completion, you must:

  • Move into the home within 92 days of the registration date
  • Continuously occupy your home for at least one year from the registration date

For detailed information on eligibility and application, visit the First Time Home Buyers' Program page on the BC government's website.

Navigating these exemptions can be complex, but they can save you thousands of dollars. If you're unsure about your eligibility or how to apply, consulting with a notary public can provide clarity and ensure you don't miss out on potential savings.

Buying a Condo or Townhouse in BC? Here’s What’s in Your Strata Welcome Package

/

If you’re buying a strata property in British Columbia such as a condo or townhouse, you’ll go through a series of steps during the real estate conveyancing process. As a notary public, I guide clients through each stage, from reviewing the Form B: Information Certificate to preparing closing documents.

One important set of materials you’ll receive before moving in is the strata “welcome package.” While this package isn’t part of the formal legal forms, it contains practical information that will help you settle into your new home with ease.

The welcome package is intended to help you understand how your building or complex is run and make your move-in as smooth as possible. While the exact contents vary between strata corporations, you can usually expect to find:

  • Contact Information – Details for the strata management company, emergency numbers, and your strata council.
  • Move-In Instructions – Guidelines for booking elevators, paying move-in fees, and rules for moving furniture or large items.
  • Access Information – How to obtain keys, fobs, garage remotes, and any entry codes.
  • Strata Rules and Bylaws – A copy of the governing documents that outline what is and isn’t allowed in your building or complex.
  • Forms and Applications – Parking and storage locker assignment forms, pet registration forms, and renovation request forms.
  • Monthly Fee Payment Instructions – How to set up payments for your monthly strata fees and any other charges.
  • Waste and Recycling Guidelines – Pickup schedules and rules for garbage, recycling, and compost disposal.

If you’re buying a condo or townhouse in BC, it’s a good idea to review your welcome package as soon as you receive it. This will help you avoid surprises, understand your responsibilities, and get familiar with the building’s procedures.

Every complex handles the delivery of the welcome package differently. Some provide us the welcome package electronically before completion. Some email them to you. Some physically deliver them to the new owner. Some mail them to the new owner. If you do not receive the welcome package, please reach out to your strata management company.

If you have questions about your welcome package or any of the strata documents you receive, your notary can help explain them so you can move in with confidence.

“Notice of Interest, Builders Lien Act” Explained

/

Notice of Interest under the Builders Lien Act: What You Need to Know

The word lien can be intimidating. When combined with the word builder, it often causes even more concern. This reaction is understandable. But what exactly is the "Notice of Interest, Builders Lien Act" notation you sometimes see on a property title? And should buyers or realtors be worried?

 

Key Takeaway for Buyers and Realtors

If you are purchasing a property and notice a "Notice of Interest, Builders Lien Act" on title, there is no need for alarm. This is not a financial charge or encumbrance against the property. At our office, we typically request that the seller’s notary or lawyer have it removed during the conveyance process. However, not all legal professionals take the same approach. Still, the presence of this notice does not affect your ownership rights or ability to use the property.

 

Understanding a Builder’s Lien

A builder’s lien is a legal mechanism that protects workers and suppliers involved in construction. If someone provides materials or services but is not paid, they have the right to register a lien against the property. This must be done within a specific timeframe and serves as security for the unpaid work.

 

Importantly, this right is not limited to those hired directly by the property owner. It also applies to subcontractors and suppliers who may not have a direct relationship with the developer or landowner. As a result, a builder’s lien can be registered even if the owner has paid their contractor in full, which can feel unjust from the owner’s perspective.

 

What Is a Notice of Interest?

To help protect themselves, developers or landowners can register a Notice of Interest under the Builders Lien Act. This notice sets out that only those who have been directly hired by the owner or developer may file a lien.

This notice is intended to protect the original owner or developer during the course of the project. It does not offer any protection or benefit to future owners. For that reason, the notice is typically removed when the property is sold.

 

When Should It Be Removed?

In new developments, the developer’s lawyer may remove the notice once the property is sold to the first buyer. If this step is overlooked, it should be addressed during any future sale of the property.

 

For Legal Practitioners: How to Remove the Notice

If you are acting for the current owner and need to remove a Notice of Interest, you can do so in one of two ways:

  1. By registering a Form C – Release, signed by the current owner; or
  2. By filing a Form 17 – Cancellation, accompanied by a letter to the Land Title Office. The letter should be signed by the legal representative of the current owner and confirm that the notice has been fully discharged.

10 Ways to Reduce or Avoid Mortgage Prepayment Penalties When Selling Your Home in BC

/

As a Burnaby notary public specializing in real estate conveyance, I often help sellers or borrowers who are selling their property, refinancing or switching their mortgage to another bank. They are surprised to learn that paying out their mortgage early can trigger a mortgage prepayment penalty. This penalty, also called a prepayment charge, can be thousands of dollars and is charged when your payout date does not exactly match the maturity date of your mortgage term.

If you are planning to pay off your mortgage early, there are ways to reduce or even avoid this penalty. Here are ten strategies to consider before you list your property or decide on a refinance date.

1. Align the Completion Date or Funding Date with Your Mortgage Maturity or Renewal Date

If possible, set your completion date or funding date to match the day your mortgage term ends or renews. Lenders usually do not charge a penalty when the mortgage term naturally expires. Having said that, it is prudent to confirm with your bank to determine whether you should instruct them to renew into an open term as your mortgage is usually paid off between 1-3 business days from the completion date or funding date, depending on whether a payout option is available locally.

2. Use Your Prepayment Privilege Before the Sale or Mortgage Refinance/Switch

Many mortgages allow a lump-sum annual prepayment, often 10 to 20 percent of the original principal, without penalty. Making this payment before selling can lower the remaining balance and reduce the penalty. Keep in mind that some lenders allow prepayments anytime and some only prepayment on normal payment dates.

3. Port Your Mortgage to Your Next Property

If you are buying another home, ask your lender about porting your existing mortgage. This transfers your current mortgage to the new property without triggering a payout penalty.

4. Negotiate with Your Lender

If you are taking out a new mortgage with the same lender, they may be willing to reduce or waive the penalty to keep your business.

5. Sell During an Open Prepayment Period

Some mortgages allow full repayment without penalty during an open window near the end of the term or on specific anniversary dates. Check your mortgage contract to see if this applies to you.

6. Switch to an Open Mortgage Before Selling

If you know you will be selling soon, converting your closed mortgage to an open mortgage can allow you to pay it off without penalty. While open mortgages usually have higher interest rates, this short-term cost may still be lower than the penalty.

7. Watch for Interest Rate Changes

If your penalty is based on the interest rate differential (IRD), rising interest rates can lower the penalty amount. Timing your sale after such a shift may save you money. If your penalty is based on three months of interest, paying out after Prime rate is expected to drop (or conversely, payout before Prime rate is expected to increase) will give you some saving.

8. Use a Blend-and-Extend Option

Some lenders offer a blend-and-extend option, combining your current mortgage rate with a new rate over a longer term. This can reduce the penalty when you eventually sell. This strategy requires a very experienced mortgage specialist with your current lender to be successful as a lot of the policy and procedure are opaque at best.

9. Utilize Other Prepayment Privileges

Many lenders allow you to increase mortgage payment and double up on payments. This strategy takes time to implement so it is important to play well in ahead of your sale or mortgage refinance/switch.

10. Work Collaboratively with a Notary

Minimizing mortgage prepayment penalty is not an ordinary part of the conveyance or refinance process. Some lenders do not allow prepayment options to be exercised once the notary has requested a payout statement from them. While the legality of this practice is questionable, it is nonetheless helpful if you inform your notary at the onset of your engagement that you wish to take active steps in minimizing your prepayment penalty.

Final Tip: Every mortgage agreement is different, and the right strategy depends on your lender’s terms. If you are selling a property in Burnaby or anywhere in BC, our notary office can review your payout statement, explain your options, and work with you to reduce your mortgage prepayment penalty upon request.

Contact us today to discuss your real estate conveyance needs and ensure a smooth and cost-effective sale.

Understanding Important Dates in a Residential Real Estate Transaction

/

Are you buying or selling a residential property? The conveyancing process involves several important dates and deadlines that play a key role in the success of the transaction. Missing any of them can result in delays, penalties, or even the deal falling through.

This article explains the key dates in a typical residential real estate transaction in British Columbia and what each one means.

1. Contract Date

The contract date is the date the buyer prepares and signs the offer before presenting it to the seller. This date appears on the Contract of Purchase and Sale and serves mainly as a reference point.

For example, if there is an addendum or amendment to the agreement, it will refer to the contract date to identify which version of the agreement is being modified.

The contract date is not the date the buyer and seller reach an agreement. That is the offer acceptance date.

2. Offer Open for Acceptance Date and Time

When a buyer submits an offer, it will include a deadline, typically both a date and time, by which the seller must respond. This is known as the offer open for acceptance period.

If the seller does not accept the offer within this timeframe, the offer expires and is no longer valid.

3. Offer Acceptance Date

This is the date the seller formally accepts the buyer’s offer. Once accepted, the agreement becomes legally binding, subject to any conditions included in the contract.

The acceptance must take place on or before the offer open for acceptance deadline. This date also triggers the countdown for other important deadlines, such as subject removal and the rescission period.

4. Subject Removal Date

Many offers include conditions, often referred to as subjects, that must be met before the sale becomes firm. Common subjects include financing approval, a satisfactory home inspection, or review of property documents.

The subject removal date is the deadline by which the buyer must confirm that these conditions have been satisfied and officially remove them in writing. If the subjects are not removed by this date, the contract is typically considered void and the buyer’s deposit is usually returned.

It is important to work with your real estate agent, mortgage professional, and notary public to ensure all conditions are addressed well before this deadline.

5. Rescission Period (Cooling-Off Period)

As of January 2023, the Home Buyer Rescission Period Regulation gives most buyers of residential real estate in British Columbia the right to cancel their accepted offer within three business days, for any reason.

If the buyer chooses to cancel within this period, they must pay the seller a rescission fee equal to 0.25% of the purchase price. For example, on a $1,000,000 home, the fee would be $2,500.

Certain property types, such as leasehold properties and some pre-sale developments, may be exempt from this regulation.

6. Completion Date

The completion date is when the legal transfer of ownership takes place. On this day, your notary registers the title transfer with the Land Title Office and your lender, if applicable, releases the mortgage funds.

You become the legal owner of the property on the completion date and assume all associated rights and responsibilities.

Make sure to arrange for your home insurance policy to begin on the completion date.

7. Adjustment Date

The adjustment date is when the buyer becomes responsible for property-related expenses, such as property taxes, strata fees, and other ongoing costs. Any amounts already paid by the seller beyond this date will be adjusted between the parties.

For most resale transactions, the adjustment date is one day after the completion date. For pre-sale properties, the adjustment date is typically the same as the completion date.

8. Possession Date and Time

The possession date is when the buyer takes physical possession of the property. This includes receiving the keys and being allowed to move in. The exact time of possession is specified in the Contract of Purchase and Sale.

Possession arrangements are typically handled by your real estate agent, who will coordinate the key handover and any final walkthroughs.

Although you become the legal owner on the completion date, you cannot access the property until the possession date and time stated in your contract.

Final Thoughts

Every date in a real estate transaction matters. Understanding each one helps you stay informed and prepared throughout the process.

As a notary public in British Columbia, we help buyers and sellers navigate these important steps with confidence and clarity. Whether you’re purchasing your first home or adding to your investment portfolio, we work to ensure your transaction is completed smoothly and on time.

Scroll to Top