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Buying
a Home - Page 1
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Thinking of
Buying a Home?
Never base
your offer on list price alone |
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While some
times the list price is very reasonable and it's only slightly above
true market value, other times it's set unreasonably high.
As Realtors,
one of the most common questions we are asked (by experienced and
novice buyers) is: "How much below list price should I offer?"
You should
never base your offer on list price alone. Following is a real-life example.
A house
originally was listed at $340,000, then it was reduced to $320,000,
to $300,000 and finally to $285,000. It was sold for $282,000 - a
little under fair market value.
Had someone
offered $40,000 below original list price, would have paid too much,
although it would have seemed like a good deal then !
I can't
over-emphasize the importance of getting an accurate CMA (Comparative
Market Analysis) when you are buying a home and also when you are
selling one. |
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First
Time Home Buyer's
Program
Below
is a summary of the First Time Home Buyer's Program (FTHB)
For
complete details click
here |
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You may be
exempt (partly or fully) from the Property Transfer Tax if certain
requirements are met: |
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Purchaser |
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You qualify
for the exemption if: |
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A Canadian citizen or permanent resident |
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A person who has resided in BC for 12 consecutive months immediately
prior
to the date of registration |
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A person who has never, at any time, held a registered interest in a
principal residence anywhere in the world |
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Property |
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The
property you purchase qualifies if: |
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The fair market value (FNV), not necessarily the purchase price, is
not more than the than the current theshold of $425,000.
This threshold amount applies to purchases registerd on, or after,
February 20, 2008. |
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The land is 0.5 hectares (1.24 acres) or smaller |
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The property will only be used as a principal residence |
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Financing |
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The
financing you receive qualifies if: |
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It is at least 70% of the fair market value of the property |
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It has a term of at least 1 year |
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It is registered within 7 days of the date you register the property |
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PARTIAL
EXEMPTION |
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When a
property has a FMV of up to $25,000 more than the threshold amount,
the property is eligible for a partial exemption |
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The property
transfer tax (PTT) payable is reduced by a factor of:
(450,000 - FMV)/25,000 |
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For example,
for a property with a FMV of $445,000 the partial exemption is
calculated as follows:: |
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Tax at 1% on
the first $200,000 and 2% on remainder = $6,900 |
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Partial
exemption calculation: |
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(450,000 -
445,000) / 25,000 = 0.2 |
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0.2 x $6,900 = $1,380 |
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Tax payable is
$6,900 - $1,380 = $5,520 |
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.Property
Transfer Tax
is
calculated as follows:
1%
on first $200,000 and
2%
on the balance
of the fair market value (FMV) of the home
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FMV
$ |
PT
Tax $ |
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150,000 |
1,500 |
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200,000 |
2,000 |
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250,000 |
3,000 |
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350,000 |
5,000 |
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450,000 |
7,000 |
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550,000 |
9,000 |
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650,000 |
11,000 |
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If there are
two or more buyers and only one qualifies as a first-time buyer, then
only his/hers portion is tax exempt. |
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You are a
first-time buyer if you've never owned a principal residence anywhere on
planet earth. |
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If
you qualify as a First Time Buyer then the above table is modified
as follows:
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FMV
$ |
PT
Tax $ |
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150,000 |
0 |
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200,000 |
0 |
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250,000 |
0 |
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350,000 |
0 |
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425,000 |
0 |
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430,000 |
1,320 |
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435,000 |
2,680 |
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440,000 |
4,080 |
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445,000 |
5,520 |
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450,000 |
7,000 |
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550,000 |
9,000 |
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650,000 |
11,000 |
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