Buying Costs

If you’ve decided to buy a home, it’s important you understand all the costs involved in addition to the price you’re paying for the property.

Here’s a helpful article published by the Real Estate Board of Greater Vancouver – we thought you might find it to be useful:

Here’s an overview:

Buying Costs

Mortgage application
Lenders may charge a mortgage application fee, which will vary depending on the lending institution.

Mortgage insurance
The federal government requires high-ratio mortgages with less than 20 per cent down payment to be insured against default. The cost ranges between 0.60 to 3.85 per cent of the mortgage amount which is added to the mortgage principal.

As of February 15, 2016, the federal government requires a 10 per cent down payment requirement on homes valued at $500,000 – $1 million, that need mortgage insurance. Homes valued at $1 million+ require a minimum down payment of 20 per cent. Mortgage insurance is not available for homes in this price range. Learn more

Appraisal fees
Before your lender approves your mortgage, you may be required to have the property appraised. Sometimes your lender will cover this cost. If not, you’re responsible. The fee ranges from $300 to $450 plus GST.

Land survey fees
Lenders may require a survey of the property. The fee ranges and is typically $500 plus GST.

Home inspection fees
A home inspection is a report on the condition of the home and includes structural and moisture problems, as well as electrical, plumbing, roofing and insulation. The fees range and is typically $500-$900 depending on the size of the home and the complexity of the inspection. Some inspectors also charge an additional fee for an older home or a home with a secondary suite, a crawlspace, or a laneway home.

Goods and Services Tax (GST)
The GST on a new home is 5% of the price. A GST rebate equivalent to 36% of the GST paid is available for new homes priced up to $350,000 and a partial rebate on new homes priced up to $450,000.

Buyers also pay the GST on fees for services from appraisers, home inspectors, lawyers, Notary Publics and REALTORS®.

Provincial Sales Tax
The PST is generally not payable on services except for legal and notary fees. Both the GST and PST are paid on legal and notary fees.

Property Transfer Tax
Home buyers in BC pay a provincial Property Transfer Tax (PTT) when they buy a home. The tax is charged at a rate of 1% on the first $200,000 of the purchase price and 2% on the remainder up to and including $2 million. The PTT is 3% on amounts greater than $2 million..

Qualifying first-time home buyers may be exempt from paying the PTT if the purchase price of their home is priced up to $475,000. There is a proportional exemption for homes priced between $475,000 and $500,000. At $500,000 and above the rebate is nil.

Qualifying buyers of new homes may be exempt if the purchase price of their home is priced up to $750,000. There is a proportional exemption for homes priced between $750,000 and $800,000. At $800,000 and above there’s no rebate.

Click here for the Property Transfer Tax fact sheet.

Click here for more cost saving programs.

Adjustments (see details in the Contract of Purchase and Sale)
Property taxes
Depending on the Contract of Purchase and Sale, a property buyer will likely be required to reimburse the seller for any prepaid property taxes. The lender may require the buyer to add property tax installments to monthly mortgage payments.

Utility bills
A buyer is typically required to reimburse the seller for any prepayments for municipal swer and water fees.

Rent and security deposits
If there is a secondary suite or a laneway home rental and the tenancy continues, the buyer receives the security deposit from the seller with accrued interest because the buyer is responsible for reimbursement when the tenant leaves.

Mortgage life insurance
If the owner dies, this type of insurance will pay off the balance owing on their mortgage.

Fire and liability insurance
Most lenders require property buyers to carry fire and extended coverage insurance and liability insurance.

Home insurance
Lenders typically require home buyers with a mortgage to buy home insurance. The insurance should be effective on the earlier of either the completion date or the date that the balance of funds is placed in trust.

Legal or Notary Public fees
Buyers typically hire a lawyer or Notary Public to assist with drafting documents and ensuring the title of the home is properly transferred. Likely fees include a:

*title search for a property, this costs up to $11
*land title registration fee, which is about $75
For more information about land titles, visit the Land Title and Survey Authority of BC at

Moving fees
Moving fees vary depending on the distance moved and whether professional movers do all of the packing. Rates vary.

Utility hook ups
There are fees for hydro, gas, water and sewer, cable, and phone connections.

New owners should always have door locks rekeyed. Costs depend on whether the locks are standard or electronic.

Strata maintenance fees
Typically paid on the first day of each month.

Commission fees
What does it cost to hire a Realtor you may also ask?’ There is no set commission rate in the real estate profession. Most Realtors are paid after ownership is transferred. Fees are typically paid to the real estate company by the lawyer or notary in the transaction from the sale proceeds.

Compensation is always agreed to beforehand between you and your Realtor. There is no such thing as an average commission. The Commission paid depends on the services provided by your Realtor, which can vary significantly depending on your needs as a client or the business model employed by the Realtor.

When does a commission become payable?
The standard Multiple Listing Contract provides that commission is payable on the earlier of the following: completion date under the Contract of Purchase and Sale, or the actual date the sale completes.

Read full article via the REBGV online here.

RE/MAX Michael Cowling And Associates Realty

Business: 604-276-2335
Cell: 604-241-7653

#110 – 6086 Russ Baker Way
Richmond, British Columbia
V7B 1B4

New rules for the capital gains: Principal Residence Exemption

Changes to the Principal Residence Exemption (PRE) were announced on October 3, 2016.

The PRE allows a home owner an income tax exemption on capital gains they realized when they sell their designated principal residence as defined in the Income Tax Act 40(2)(b).

Before 2016, the Canada Revenue Agency (CRA) did not require the home owner to report when they claimed a full exemption for a capital gain under the PRE rules.

Effective January 1, 2016, the CRA requires all dispositions of residential real estate to be reported on Form T2091. Dispositions include a sale, a gift, a death or a change of use.

Owners can claim only one principal residence per year and must provide a description of the property and details about the date of purchase and the date of sale on Schedule 3 of their federal tax return. (Note: this schedule is being modified.)

The PRE capital gains exemption is intended to be available only to Canadian resident individuals and trusts.

A principal residence, according to the Income Tax Act, section 54:

  • must be a housing unit;
  • must be owned by the tax filer either alone or jointly with someone else;
  • must be lived in, “ordinarily inhabited,” by the tax filer or their spouse and children;
  • must be designated as a principal residence; and
  • can’t be income-producing for tax purposes.

Note: flipped homes are not capital property. They’re considered inventory by CRA and profits are business income, which aren’t entitled to the principal residence exemption.

Client owns two properties

Your client owns a home in a city and also owns a seasonal residence such as a cottage or ski condo. They can choose to designate the seasonal residence as their principal residence. The seasonal residence can be considered “ordinarily inhabited in the year” even if it is used only during vacations, provided the property doesn’t gain or produce income.

When the seasonal residence is sold, and the owner designates it as the principal residence, the owner can claim the PRE against the capital gain.

Client changes property use

If your client downsizes, buys a condo, and rents or gifts their home to one of their children, the CRA considers this a “deemed disposition” because the primary use of the property has changed. CRA considers the home sold for tax purposes at the current fair market value in both these cases.

Residence on acreage

If a residence is on acreage larger than half a hectare (1.235 acres), the portion of the property where the home is located is eligible for the PRE. However, if a municipality’s zoning regulations don’t allow the property owner to legally subdivide their land (as in BC’s Agricultural Land Reserve), then the entire property may be eligible.

Residence owned through a trust

Trusts will be eligible to designate a property as a principal residence for a tax year that begins after 2016 only if additional eligibility criteria are met. After 2016, a trust will be required to be a spousal or common-law partner trust, an alter ego trust or a similar trust for the exclusive benefit of the settlor during the settlor’s lifetime, a qualifying disability trust, or a trust for the benefit of a minor child of deceased parents. The trust’s beneficiary who, or whose family member, occupies the residence for the year will be required to be resident in Canada in the year, and will be required to be a family member of the individual who creates the trust.

Changes for non-residents

An individual who wasn’t resident in Canada in the year the individual acquired a residence won’t, on a disposition of the property after October 2, 2016, be able to claim the exemption for that year. This ensures that permanent non-residents are ineligible for the exemption on any part of a gain from the disposition of a residence.

Record keeping

It‘s imperative that property owners keep records of the purchase price and date, invoices and receipts for capital improvements, and the sale price and date for properties they own.

Owners planning to sell a home should get an appraisal report establishing the fair market value of their properties and keep it on file.

CRA information gathering

Using new reporting information, the CRA is now able to track transactions and identify who has claimed PREs for which years, as well as capital gains not reported in the past and whether tax is owing.

Audits, penalties

CRA can audit and levy penalties and interest charges. If your client forgets to claim the PRE in the year they sell their residence, they will be required to amend their return for that year to be eligible for the PRE. There are late designation penalties.

Always recommend that your client get legal and accounting advice.


Source: Real Estate Board of Greater Vancouver

Contact Michael Cowling at 604-241-7653 or for your neighbourhood market update.

BC government to offer down payment loans for first-time buyers

The BC Government unveiled a new loan program today to help first-time home buyers come up with their down payment.

The BC Home Owner Mortgage and Equity (HOME) Partnership program will offer qualifying home buyers loans of up to $37,500, interest and payment free, for five years.

The province will begin accepting applications on January 16, 2017.

To qualify, buyers must:

• be buying their first home;

• obtain a high-ratio, insured first mortgage for at least 80 per cent of the purchase price;  

• have a combined gross household income not exceeding $150,000;

• have saved a down payment amount at least equal to the loan amount;

• be a Canadian citizen or permanent resident for at least five years; and

• have lived in BC for at least the full year preceding their application.

The loans will be due in full if the buyer defaults on a payment, ceases to use the home as a principle residence or resells the home.

Key facts:

• The loans will match a home buyer’s contribution to a down payment up to five per cent of the home’s purchase price. 

• The maximum purchase price to qualify for a loan is $750,000 (excluding taxes and fees).

• After five years, buyers can either repay their loan or enter into monthly payments at current interest rates.

• Loans through the program are due after 25 years.

“This program will boost sales to first-time home buyers. Without question, they’ll take advantage of it wherever they can,” said Helmut Pastrick, Central 1 Credit Union chief economist.

The province estimates this initiative will help at least 42,000 buyers or households province-wide over the next three years. About half of these buyers will be in the Lower Mainland, according to Pastrick.

Click here for more information.


Source: Real Estate Board of Greater Vancouver

Contact Michael Cowling at 604-241-7653 or for your neighbourhood market update.

How to Stage Your Home During the Holidays

The holidays are all about giving (even when you’re hunting for an offer), so take the time to give your house a mini seasonal makeover for festive home viewings.

Light it Up – First, make sure all the year-round outdoor lights are functioning — winter days are shorter so having the walkway and front door lit up for evening viewings is a must. Second, when it comes to seasonal light displays, keep it simple. String white lights to highlight an architectural feature or a splendid fir tree in the front yard…and make sure the light-up reindeer display stays in the garage.

Festive Front Door –  Any home stager worth their salt will tell you first impressions are most important — and since the front door is often the first thing a potential buyer will see, better make it count. Give that dull door a done-in-minutes holiday makeover by hanging a tasteful wreath or swag. Placing a seasonal arrangement in the entryway or on a hall table also makes it feel like they’re coming home for the holidays, rather than coming into your home for an open house.

Holiday Flair – Even though year-round home staging is all about a less-is-more philosophy, when the holidays roll around ramping up your ornament game is a must. But don’t go totally overboard: a bowl of fragrant pinecones, some strategically placed sprigs of holly, or a bowl of shiny glass baubles should do the trick. Oh, and stay away from overtly religious displays as it might put off some people — remember it’s about them, not you.

Pretty Palette – Your eclectic collection of Christmas tree ornaments may hold great sentimental value to you and your family, but they may clash horribly with your home décor and need to remain securely packed away. Think about your living room’s colour palette and find ornaments that fit within it. If the walls are white, maybe opt for a faux white tree, or if the room is decorated in darker tones, consider gold or green holiday accents.

Warm Up -Stepping out of the biting cold and into a warm and cozy home is one of the few pleasures of wintertime. Enhance the corporeal experience of your potential buyers by making sure the thermostat is turned up a couple of extra degrees. If there is a fireplace, always have it lit, either when showing the house or when taking staged photos.

Seasonal Fragrance – Thanks to human physiology, the quickest way to access memories is through the sensation of smell — so make sure your potential buyers are getting good ones the moment they walk through the door. Simmering apple cider or baking a batch of ginger cookies are good standbys, but take it a step further and sparingly spritz a winter-scented home fragrance throughout and breathe deeply.

Now, enjoy creating this seasonal (and sellable) sanctuary and happy holidays!

(article courtesy of RE/MAX Canada and HGTV)

Home sale and listing activity dip below historical averages in October

Greater Vancouver Real Estate Board

November 2, 2016


Reduced home sale and listing activity are changing market dynamics in communities across Metro Vancouver.

Residential property sales in the region totalled 2,233 in October 2016, a 38.8 per cent decrease from the 3,646 sales recorded in October 2015 and a 0.9 per cent decrease compared to September 2016 when 2,253 homes sold.

Last month’s sales were 15 per cent below the 10-year October sales average.

“Changing market conditions compounded by a series of government interventions this year have put home buyers and sellers in a holding pattern,” Dan Morrison, Real Estate Board of Greater Vancouver (REBGV) president said. “Potential buyers and sellers are taking a wait-and-see approach to try and better understand what these changes mean for them.”

New listings for detached, attached and apartment properties in Metro Vancouver totalled 3,981 in October 2016. This represents a decrease of 3.5 per cent compared to the 4,126 units listed in October 2015 and a 17 per cent decrease compared to September 2016 when 4,799 properties were listed.

Last month’s new listing count was 9.5 per cent below the region’s 10-year new listing average for the month.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 9,143, a 4.5 per cent decrease compared to October 2015 (9,569) and a 2.3 per cent decrease compared to September 2016 (9,354).

The sales-to-active listings ratio for October 2016 is 24.4 per cent. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“While sales are down across the different property types, it’s the detached market that’s seen the largest reduction in home buyer demand in recent months,” Morrison said. “It’s important to work with your local REALTOR® to help you navigate today’s changing trends.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $919,300. This represents a 24.8 per cent increase compared to October 2015 and a 0.8 per cent decline compared to September 2016.

Sales of detached properties in October 2016 reached 652, a decrease of 54.6 per cent from the 1,437 detached sales recorded in October 2015. The benchmark price for detached properties is $1,545,800. This represents a 28.9 per cent increase compared to October 2015 and a 1.4 per cent decrease compared to September 2016.

Sales of apartment properties reached 1,178 in October 2016, a decrease of 23.7 per cent compared to the 1,543 sales in October 2015.The benchmark price of an apartment property is $512,300. This represents a 20.5 per cent increase compared to October 2015 and a 0.3 per cent increase compared to September 2016.

Attached property sales in October 2016 totalled 403, a decrease of 39.5 per cent compared to the 666 sales in October 2015. The benchmark price of an attached unit is $669,200. This represents a 25.7 per cent increase compared to October 2015 and a 1.1 per cent decrease compared to September 2016.

Contact Michael Cowling for the statistics for your property type and neighborhood at

Average Home Size to Contract in the Near Future - report

Oct 31, 2016
A recent report warned that the average size of Canadian homes will decrease in the next few years, even as affordability in Vancouver and Toronto won’t return to manageable levels for the foreseeable future.

PricewaterhouseCoopers stated in its 2017 outlook that Canadians will see the average floor areas of their homes decline amid increased immigration stimulating demand in markets already suffering from scarcity.

“Those arriving in Canada may not have the same size expectations, creating demand for smaller units,” according to the report, as quoted by HuffPost Business Canada. “Significant increases in immigration over the next five years will continue to keep demand high and put even more pressure on affordability unless more supply is made available.”

This shrinkage is nothing new in the hottest markets—especially Toronto, where the average condo floor area has been on a downward trend for several years now.

“With no real factors reducing the demand for real estate in Toronto and Vancouver, developers and builders will continue to face supply-side issues,” the report stated.

Canadian housing affordability has not been looking up for the past few years. Earlier this year, Vancouver average home prices have reached historic heights, while Toronto affordability levels are the lowest they have been in 20 years.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Email me at

Source:rich Ephraim Vecina

Michael’s Market Update – Richmond home buyers and sellers seeing big market changes in Sept.

Richmond home buyers and sellers are seeing some big market changes in September. Detached home sales dipped well into the buyer’s market category with 9.7% of active detached listings on the market selling. Townhomes came in with 26.5% and condo leading with 32% of active inventory selling in September. Overall sales to active listings registered at 18% of the total available inventory selling.

Richmond home sales totalled 80 in September 2016, a decrease of 54 % from the 174 sales recorded in September 2015.

The supply of detached homes increased 34.3% compared to last year with decreases in supply and increased demand for townhomes and condos.

Generally, analysts say that downward pressure on home prices occurs when the sales to active listings ratio dips below the 12% mark, while home prices often experience upward pressure when it reaches the 22% range in a particular community for a sustained period.

Upward pressure on home prices has eased. We have some uncertainty in the market right now due to the increased property purchase tax, retroactive and ongoing 15% foreign Buyers Tax and changes to the mortgage qualifying rules. To help you understand the factors affecting prices, it’s important to talk me in advance of putting a home on the market or negotiating a purchase.

Take a look on my website for a detailed statistical update on the past month’s market performance and contact me to discuss your area’s unique market opportunities.

CMHC says foreign buyers’ pullback in line with existing trend

The Vancouver housing market has eased since the introduction of a tax on foreign buyers but the decline continued trends that were already present.

“Foreign buyer activity is one of many factors impacting the Vancouver housing market,” noted Robyn Adamache, CMHC’s Principal Market Analyst for Vancouver.

Other factors noted by the Canada Mortgage and Housing Corp. include supply constraints for both housing and land; together with economic and demographic fundamentals driving demand.

“Sales and prices had already started to dip before the introduction of the Foreign Buyers Tax, so it basically underlined existing trends in the resale market,” added Adamache.

CMHC says that prior to the tax’s introduction there was already a slowing pace of sales, reduction in average prices, and a shift towards greater condo sales.

Are you looking to buy or sell real estate? Contact me, your local expert for a free consultation on your buying or selling real estate needs.

-Source CMHC.

Sell Your Richmond/Ladner Home this Fall!

It’s considered to be common knowledge that the best time to sell your home is in spring. While it’s certainly the busiest time to sell your home, there are compelling reasons why it is not necessarily the ideal time to sell. The advantages of putting one’s home on the market in fall are many, especially with recent shifts in our heated housing market.

Here are our insights on why you should consider listing your home this autumn:

Less Competition: The fall market brings much less competition from other sellers. Less inventory on the market means fewer options for hungry buyers; putting the odds in your favor of a speedy, profitable sale.

Plus? You’re less likely to be vying for the attention of your realtor, mortgage broker, or financial planner during the slower months.

Buyers Mean Business: With back to school and work schedules, and leading up to the holidays, it’s no secret that fall is a busy time of year. What does that mean for you, the seller? The window shoppers have gone home! The buyers pounding the pavement are qualified and motivated to move into their new home before Christmas. They’re ready to buy – yesterday.

Seasonal Beauty: Our vibrant autumn colors lend our Richmond/Ladner homes a warm, cozy feel this time of year. Just be sure to rake those leaves! Simple decorative accents can be great this time of year, too. Pick up some gourds and pumpkins from your local farmer’s market for boosted curb appeal.

Did someone say Black Friday? Sellers and buyers alike can take advantage of our seasonal sales in autumn. Spruce up your curb appeal AND outfit your new home – for less!

Start now. If you’re even thinking of putting your home on the market, contact us today for your complimentary home evaluation. We can tell you about the recent sales in your neighbourhood, and explain how the local market has impacted the value of your home.

Call Michael today: (604) 276-2335

Michael’s Market Update – Richmond home sales return to typical August levels

We have moved from record-breaking sales to more historically normal activity throughout July and August. Sales have been trending downward for two straight months. The new foreign buyer tax appears to have added to this trend by reducing foreign buyer activity and causing  uncertainty among local home buyers and sellers.

It will take a few months before we can really understand the impact of the new tax. We’ll be keeping an eye on the foreign buyer data moving forward.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Richmond totalled 323 in August 2016, a decline of 28.7 % compared to the 453 sales in August 2015. August 2016 sales also represent a 25.2 % decline compared to last month’s sales.

The Richmond sales-to-active listings ratio for August 2016 is: Detached 7.6%, Attached 30.0% and Apartment/Cond 45.1%

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12% mark, while home prices often experience upward pressure when it reaches the 20 to 22 % range in a particular community for a sustained period.

The MLS® Home Price Index composite benchmark price for residential properties in Richmond is currently $1,704,200 for Detached, $734,400 for Attached and $440,000 for Condos.

We are seeing a large increase in supply and a fall in demand especially for detached properties in the past two months. However, we’re also seeing a large drop in detached sales in the highest price points and fewer detached home sales relative to all residential sales. This is causing average sale prices to show a decline in recent months, while benchmark home prices remain virtually unchanged from July.

The average price is the simplest home price measure to explain but is not the most accurate since it may be skewed by the mix of properties. More high-end or low-end sales will skew the number up or down. Based on the Consumer Price Index, MLS HPI® benchmark prices are a more reliable and stable indicator of typical home prices across regions over time.

Whether you’re a home buyer or seller, it’s important to work with me to get the information you need and to develop a strategy that will help you navigate today’s market.

Call us today – we’re here to help, every step of the way. (604) 276-2335

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