buying a house
 

Hi all, can anyone tell me if you have to pay GST when buying a house in Ontario.
We heard about this for the first time yesterday, when we were looking at New Showhomes, we were told the builder would pay.
However, in the case of an older home is GST paid everytime a sale takes place
Hope someone can clarify

Re: buying a house
 

There is no GST on older homes, you will only pay GST on new build homes, and like you found out before most but not all builders will pay that for you

Regards

Steve

PS you will have to pay land transfer tax, which is like UK stamp duty, i can't remember the formula for how much you have to pay, i will see if i can dig up that info, or maybe someone else can pipe in with the answer

Re: buying a house
 

http://www.rev.gov.on.ca/english/taxes/ltt/rates.html

http://www.rev.gov.on.ca/english/taxes/ltt/

Re: buying a house
 

Thanks for that guys,its much appreciated
Cheers
Tracey

Re: buying a house
 

This seems like a good place to mention that I stumbled across an good supplement to mls.ca today.

A house up the street has a www.homesbyheritage.com sign up... I checked it out and it combines the usual mls stuff with google earth maps showing the exact locations of the homes for sale.

Hope this is useful to someone.

Novo.

Re: buying a house
 

New builds are subject to GST, a portion of which is reclaimable from the Government.

Re-Sale homes are not normally taxable UNLESS they have been Extensively renovated. This is one of many grey areas in home purchasing in Canada, so if the house has been renovated you should make sure that the Contract to Purchase includes a clause that makes the Sellers responsible should GST be liable on the sale, and this clause should continue in effect after the sale.

Who decides what is an Extensive renovation is the government and/or the courts. It can be an expensive mistake if you don't know about it.

Re: buying a house
 

I'm curious, how does the federal government know if the house has been extensively renovated or not?

Re: buying a house
 

Presumably because the owner has claimed a chunck of GST rebate for extensively renovating their house. When they come to sell, Revenue Canada perhaps put two and two together?

Re: buying a house
 

That's sort of what I suspected.

Re: buying a house
 

Hi, we are due to come over in the New Year once we have sold our home. We were originally going to rent for a year but personally I would prefer to buy, simply to settle and make it our home! We are moving to Kelowna.:D

Could someone kindly please just give me a brief run down on how long it takes and what it entails? I read the postings about a Contract to Purchase not sure what that is, is that where clauses are put in and accepted by both parties? :confused:

Sorry for being a real thicko on this but I understand we should get a mortgage broker and avoid the banks as we could be turned down as we will be waiting for our PR. Luckily for us my OH new employers has a brother in law who is a realtor, so they and he will help us.:thumbsup: But I just want to make sure I have all the information before hand!

Re: buying a house
 

A broker won't necessarily guarantee you any greater success or chance of failure in securing a mortgage than using a bank, though rates might be better.

I re-mortgaged recently at then end of a fixed rate period (commercial farm mortgage), and not a single broker could help me. My own bank (RBC) obliged without a problem. I'm on a 3yr work permit, so unless you've very little deposit to put down, don't worry too much about your residency status. Originally my mortgage was arranged when I was just a tourist here, done via phone/email to RBC while still in the UK, then signed and sealed when I visited on holiday.

Re: buying a house
 

Thanks RICH,

We will have approximately $150,000 to put down, to be honest we will have more but want to keep some back for emergencies!

Does one have to produce a number of wage slips etc. As each day passes I really want to purchase, of course we will rent for the first few months until we find a place to buy.:D

Re: buying a house
 

I wasn't asked for any wage slips - I'd been made redundant in the UK and not worked for 2mths prior to moving over here, and with initially only tourist status in Canada I had no proof of income. The mortgage was to help start a business, so the bank needed to see a business plan that they were happy with though. I also provided a letter of reference from Barclays in the UK, but that was all - no credit checks or any other information requested. Remember that this was a few years ago, before all the credit issues that have come to attention recently, the application process may well be somewhat more strict now.

If you've a deposit of 35% or greater, then securing a mortgage should be pretty straightforward, and holding back some $ should indicate to the bank sensible financial planning.

Regarding how long the process takes, it's somewhat dependant on any conditions of sale that you attach to the purchase. My transaction was relatively straightforward and took just under a couple of weeks to go through.

Re: buying a house
 

Realtors in BC are licensed professionals. Part of their job is to handhold you through the buying process. Though they will be working for you for free they are handsomely compensated by sharing the commission paid by the seller with the listing agent.

The process goes roughly something like this:

1 They will listen to what you want for your home - size, price, neighborhoods, schools, shopping etc.

2 They will find homes that meet your requirements and escort you to view them.

3 They will help you decide by offering local advice. IMO this is one of the most important services a realtor can offer to a newcomer, and why I always recommend people to use a realtor that specializes in the area.

4 They will give an opinion on what the chosen house should sell for, and advice on an opening offer.

5 The realtor will then help you make a written offer to purchase. From this point on you are entering a legal process that is difficult and expensive to back out from. The offer will contain the price, a deposit to be paid, any inclusions (it is common to include major appliances), the completion date and any subjects. The subjects are important to you as the buyer. The two most common ones are subject to a satisfactory building inspection and subject to receiving a mortgage offer at a reasonable rate. The offer will also contain a date that the subjects will be removed - typically in one week.

6 The seller can accept the offer, reject it, or make a counter offer. It they reject the offer then that is it. Your only option is to make another, better, offer. If the seller counter offers you can accept the revised terms or continue negotiating. Offers and counter offers are usually for a limited time - say 24 hours - so the negotiation process is concluded quite quickly. Once an offer or counter offer is accepted you have a legally binding contract and must pay the deposit which your realtor will hold in trust.

7 You now have a week to arrange a building inspection and a mortgage.

8 At the end of the week you are required to "remove the subjects". If the building inspection revealed some serious problems and you cannot renegotiate with the seller, or if you are unable to secure a mortgage you will not remove the subjects and the purchase/sale will lapse. Your deposit will be returned.

9 If the building inspection was satisfactory, and you have your mortgage arranged, then you sign a document removing the subjects from your offer. This is equivalent to exchanging contracts in the UK. The main difference is that you reach this point in 7-10 days of making the offer. If for any reason you fail to complete the purchase from this point on you will certainly lose your deposit and may be responsible for all other losses of the seller.

10 Arrange house insurance, instruct a lawyer or notary to handle the paperwork for you, and get ready to move in.

If the property is vacant I have heard of offer to move in within two weeks.

Re: buying a house
 

JonboyE's excelant post is a very neat summary of the buying process in much of Canada.

On the subject of Mortgage rates I would always advise anybody to shop around for the best rate, at the same time decide which lender you would prefer to do business with. If its the one with the best rate great, if its not, then go to your lender of choice say "I would love to do business with you, but XYZ has a better rate, will you match it" You should find that they will match it, or get very close to it. It never hurts to ask.