Calvin & Barbara Carr

When purchasing a home in British Columbia some people may not be aware that there is a Property Transfer Tax or “Land Registration Tax” when an application is made to register changes to a certificate of Title. This is based on fair market value which is the price that would be paid by a willing purchaser to a willing seller in the open market on the date of registration.

This can have many implications – for example in the case of a divorce where one partner transfers the title of the house into the other partners name or, Purchasers of Pre-sale new housing units such as condo/ townhome developments that pre-purchase at an initial price but the actual purchase price will differ when they add extras for finishing.

Certain Transactions are taxable. Most commonly they apply when you purchase a home in BC and register it in your name but other transactions may also apply.

These can include:

• buying a home and registering it in your name
• a right to purchase such as an agreement for sale
• a foreclosure
• and others

Currently the tax rate is 1% on the first $200,000 of the fair market value of the property, plus 2% on the fair market value over $200,000.

For example, if the fair market value of the property is $150,000 the tax is 1% of $150,000 or $1,500 payable tax.

If the property's fair market value is $450,000 the tax is 1% of $200,000 (equaling $2,000) plus 2% of the remaining $250,000 (equaling $5,000) for a total tax of $7,000.

Some Transactions may be exempt:

• such as the transfer of property between spouses in the breakdown of a marriage,
• first time Home Buyers,
• Leases and options to lease of less than 30 years
• Transfers of reserve or surrendered land, or to the Nisga'a Nation
• & transfers to registered charities.

For full details on the BC Property Transfer Tax and its possible implications on your property purchase in British Columbia you can visit the BC Government website at:

http://www.sbr.gov.bc.ca/individuals/Property_Taxes/Property_Transfer_Tax/ptt.htm

or follow the link at VernonHomesForSale.net for these and more frequently asked questions about Real Estate Home Buying and Home Selling in the Vernon – Okanagan areas of BC

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Calvin & Barbara Carr Real Estate Team

www.barbaracarr.ca

When is the Time to Buy?

We have been bombarded by media with all sorts of conflicting statistics on what has been happening to the housing market. We ask the question, "When is the time to buy?"

Here are some statistics for how much of an impact home sales contribute to the economy...

BC recorded 102,892 MLS residential sales for 2007 contributing:

• $4.3 billion to economic output
• $2 billion to Provincial gross domestic product
• 28,800 full time equivalent jobs were needed to service these sales
• $1.3 billion in BC household income
• $300 million in federal taxes
• $680 million in provincial taxes
• $33 million in municipal taxes

Wow! Let's look at some other statistics for the North Okanagan comparing the first 10 months of 2007 to the first 10 months of 2008.

Residential sales 2007 2008

No. of Sales 2023 1241 61% of sales

Average Price $355,519.53 $379,799.40 up 6.8% in average sale price

How about a smaller section and comparing relatively same homes (very few new housing stats) in the sub area of East Hill in Vernon

Residential sales 2007 2008

No. of Sales 181 126 67% of sales

Average Price $355,455.80 $395,833.33 up 11% in average sale price

Now we know that many factors contribute to statistical data but this may offset some of the negative media coverage. We are seeing a number of homes come off the market as we enter the winter season so the balance of sellers to buyers may start to tip back closer to what we have seen in the market for the past few years. It still is a great time for buyers with inventory available and for sellers who are seriously looking to sell.

Barbara Carr