Buying a home in BC – A guide for Albertans

It will be no surprise to the average Albertan that we contribute a lot to BC’s tourism industry each year. In fact Albertans are third in spending in BC, only behind people from BC themselves and Americans. I am sure many of you have spent time in BC and thought that it would be nice to own real estate here. I recently purchased a 2nd home in Kelowna and while the process of engaging a Realtor, getting preapproved for a mortgage and searching for a property is the same, it was the process afterwards that differed as follows:

1) Property Disclosure Statement (PDS) – this is a very informative document draw up by the seller which has several pages of questions about the property in question. The seller has to be truthful in his responses and covers many items such as any issues with the land, the building, the strata etc. This document is required in BC and I have no idea why not required in Alberta. A very useful document

2) Real Estate Deposit – In Alberta, when buying a property, you put down an initial deposit as a sign of good faith a few days after the signing of the purchase agreement. In BC, you only put down this initial deposit after all conditions have been met.

3) Completion date and date of possession – On the BC purchase agreement there are two dates – the Completion Date and the Date of Possession. The completion date is the date that title and ownership is transferred to the new buyer as well as the funds are transferred from the buyer’s lawyer to the seller’s lawyer. The date of possession date is the date the buyer is allowed to take physical possession and is typically at 12 noon on the day following the completion date. In Alberta, there is just a date of possession. So, when you are planning on reserving that moving van, may sure it is on the possession date

4) Taxes – Property Transfer Tax – BC has what is called a property transfer tax. This is a tax that all buyers in BC pay and is calculated as 1% on the first $200,000.00 of the property’s fair market value, 2% on the amount between $200,000.00 and $2,000,000.00 and 3% on the amount between $2,000,000.00 and $3,000,000.00 and 5% of the rest. Lenders will not allow you to finance this cost as it is a tax and adds no value of any kind to the property. Alberta doesn’t have such a tax.

5) Taxes – Speculation and Vacancy Tax – The speculation and vacancy tax is an annual tax paid by some owners of residential properties in designated taxable regions of B.C. The tax is designed to discourage housing speculation and people from leaving homes vacant in B.C.’s major urban centres. This tax is .05% of the property’s fair market value each year. This tax doesn’t exist in Alberta.

6) Mortgage foreclosure – In Alberta if you stop making your mortgage payments, the lender and/or CMHC can only go after the sale proceeds of the property in default. In BC, they go after the property and your other personal assets

7) Review of Condo Documents – In Alberta, it is a common practice to have an outside third party review the condo documents to determine if there are any potential issues. In BC, this isn’t a common practice and I had to search around to find a company that would. This company was started by an Albertan who recognized a need.

I am always surprised when a similar process in one province (buying a home) is so different in another. Having said that, I am able to provide mortgage financing on properties anywhere in Canada that lenders will fund, including BC.

If you have any questions or would like to inquire about buying a house in BC please let me know!