Thursday, June 22, 2017
Kieran Morris

“It was a mistake” or “I didn’t anticipate this” are the last words you want to hear when making a major real estate decision. As lawyers and notaries public, our role is to protect you when undertaking one of the biggest sales or purchases of your life.

Common Mistakes

The Society of Notaries Public of BC surveyed a pool of notaries public in the Greater Vancouver area to identify some of the most common mistakes that house buyers and sellers make. These mistakes include the following:

  1. Misunderstanding the Property Transfer Tax (PTT) exemption (see below for more on this);
  2. Not considering the Cost of Fees to complete the purchase or sale;
  3. Not knowing that GST (which can be significant) is payable on seller commissions;
  4. Confusing key dates – such as Closing date vs. Possession date – and what you can or cannot do at certain stages of the transaction; and
  5. Misjudging the property tax year or payment cycle.

Most of these mistakes and misunderstandings can be avoided simply by enlisting the services of a real estate lawyer or notary public. Lawyers and notaries public are well-trained to handle real estate transactions, and carry the responsibility of correctly calculating the costs and dates and handling the forms required to successfully complete your purchase or sale.

Am I exempt from paying PTT?

Your notary public or lawyer will be able to help you make smart financial decisions, using their knowledge to help you gauge your eligibility for programs such as the PTT exemption, for example. According to the BC government, Property Transfer Tax is calculated on the following basis:

“The tax is charged on the rate of 1% on the first $200,000, and 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000. The rate goes up to 3% on the portion greater than $2,000,000.”

If you are a Canadian citizen buying a used home below $500,000 as your first home purchase, you are eligible for an exemption from the PTT as per the First Time Home Buyer’s Program. Knowing this fact could help you identify when, and which houses you may want to buy to save a fair bit of money on property transfer taxes. 

Need help accurately gauging the cost of buying or selling a home? Contact Kieran Morris!

 (A version of this post was originally published on June 22, 2017 by Vancouver Downtown Notary.)

Kieran Morris