prairiechicken

I'm here in Canada on a recce. Looking at homes, but just had an email from a realtor that made me wonder if the process is rather different from the UK.

My assumption was that it was similar to the UK - a vendor employs a realtor to market the house, and when it sells, they pay the realtor whatever commission was agreed on the sale. Please tell me there isn't some sort of double whammy in Canada where the buyer also ends up paying that realtor in some way... it was just the way her email was worded that made me wonder.

I know about the GST/PST on houses, which can run into the tens of thousands. Are there any other 'hidden' costs I should know about on top of what you actually offer to pay for the house?

Also, can anyone enlighten me on what the tax relief is in BC if you are buying a brand new home? Or a lot to build your own? And if you buy on that's only recently built it appears that you can get some tax relief too, but I don't know how new is new enough to qualify!

Much thanks in advance

Novocastrian

Well, duh!

It really doesn't matter. You agree with the seller on a price. It turns out that typically about 5 or 6% of that ends up in the bank accounts of the agent or agents involved in the transaction.

Every country is different. But as said, in the long run it's swings and roundabouts if you're not into property speculation as a hobby.


GST/PST only applies to new builds. At least there won't be a realtor involved in that. Can't help with the BC specific bit. You've also got lawyers fees and tranfser tax (think stamp duty) to add on to that later.

ninaDGBCA

GST/PST on new builds: Here in ON the builder waives the GST on the house but when the buyer gets the GST rebate he has to sign it back to the builder

The seller pays the agent. If the seller has a different agent than the buyer then the agents have to split the percentage but still the seller pays.

I only know how it works in Ontario but here you basically buy a house within a few days. Offer, accepted, home inspection, bank stuff, closed! We build new so it takes a bit longer.

prairiechicken

Ok yes I realise that it probably sounds stupid to think it wouldn't be different.... but anyway....

So am I to understand that basically we would offer the seller an amount, and then a percentage of that would go to the realtor? Rather than us needing to find extra money on top of that for the realtor?

I guess the ins and outs of it don't matter, what I really need to know is:
If a house is on the market for $299000, and we offer $285000 and it's accepted, what the heck do we ACTUALLY end up paying once all the taxes and extras are taken into account? (I realise that is a piece-of-string question, but if I can work out a rough percentage to add in extra, that will obviously help!)

Siouxie

Everything you need to know about house buying for newcomers to Canada: http://www.cmhc.ca/newcomers/english/buying.html

Basic steps: http://www.cmhc-schl.gc.ca/en/co/buh...hostst_004.cfm

Novocastrian

Province dependent, but basically only the lawyers fees (slightly less eye watering than you might expect) and the title transfer tax (1% in ON outside of Toronto).

Rough percentage to add in extra on a $300K purchase? Let's say $5K.

ninaDGBCA

Pretty much $285 000 plus closing costs = lawyer, land transfer tax (if you have owned before) +home inspection
roughly they say about 1.5% of the buying price are closing costs. So very approximate depending on your lawyer costs $4500 in your case plus home inspection for an existing home.

And yes if the seller accepts $285000 then the seller pays a percentage, usually 5%-6% to the realtor(s). Nothing to do with you.

Novocastrian

If you bother with that, make absolutely sure who you're dealing with. Home inspectors aren't regulated here and can be a complete waste of money. Not a lot of money admittedly but you have no recourse if they were incompetent, and often they are.

Siouxie

Plus City taxes and/or utilities equalisation payment if applicable, building insurance (required to be in place from the date of closing), title insurance if required, land survey if required, appraisal fee (mortgage), mortgage insurance if you are not putting 20% down payment.

Here's a calculator which should give you an idea: http://www.integratedmortgageplanner...ost-calculator

prairiechicken

OK, so it's not all that different from the UK really then. Unless I have misunderstood.

And if I am not buying a new build or building my own new house, then the only taxes I would be paying would be the land transfer tax right? - No PST/GST (which would be an awful lot extra for no one to have mentioned that in their calculations...)

HGerchikov

This last bit might not be the case, if you sign a representation agreement with a realtor acting as a buyer's agent then read what it says about commission carefully. The preprinted agreement (in Ontario at least) states that the realtor will receive a commission of at least x percent and if the seller does not provide it then the buyer is on the hook.

Novocastrian

Never happens. Only a realtor would mention that.

Novocastrian

To confirm: no GST/PST to pay on a purchase of an existing home.

<please come back later to ask about existing cars>

HGerchikov

You would be surprised what happens - or maybe you wouldn't!

Novocastrian

Moi?