Moving To BC From Ontario, Alberta And From Another Province
Welcome to the beautiful province of British Columbia (BC)! Here, the journey of buying a home comes with unique characteristics distinct from other Canadian provinces.
If you’re moving to Surrey or any other part of BC, being aware of these is crucial in making your home-buying experience successful. In BC, the real estate landscape presents several distinctive elements that set it apart from other regions.
Some of the differences between buying a home in BC that differ from that of other provinces include:
- The amount and role of deposits in real estate transactions.
- The staggered nature of completion and possession dates.
- The involvement of REALTORS® in the possession process.
- Specific financial obligations like the Property Transfer Tax and Speculation and Vacancy Tax.
- Legal aspects such as the BC Home Buyer’s Rescission Period and strata document review.
Whether you’re drawn to the city of Surrey or Vancouver Island, this guide will serve as your roadmap to a successful home purchase!
Note: For a bit of added fun in this post, Darin will share his personal take on whether the way we handle things in BC is silly or smart.
1. Deposits in BC Real Estate
In BC, the concept of a ‘deposit’ holds importance in real estate transactions, and it’s essential to distinguish it from a down payment. A deposit in BC is the initial sum the buyer pays to demonstrate their commitment to the purchase.
This is typically around 5% of the offered price and is paid upon the acceptance of the offer. It’s a part of your overall investment but distinct from the down payment. This represents the total amount paid towards the home purchase, excluding any borrowed funds.
For instance, with the benchmark price for a home in North Surrey, BC, around $790,800, a 5% deposit would be a considerable $39,540.
This expectation is a distinct feature of the BC real estate market. It reflects the region’s commitment to secure and serious transactions.
“It’s silly. Other provinces get this right and make it much easier to buy a home. The only time this may make sense is when a deal does not close/complete, which is incredibly rare.”
Comparison with Other Provinces
Contrasting this with other Canadian provinces, the deposit requirements in BC might surprise many. In regions like Alberta or Ontario, the deposit is often a smaller fraction of the purchase price.
This typically amounts to a few thousand dollars. This difference underlines the unique financial landscape of British Columbia’s real estate market.
Understanding these terms is not just about comprehending the financial commitments. It’s about preparing for a smooth transition into BC’s real estate realm. Being well-informed about such terms helps integrate you into the community and its practices, whether you’re:
- Dealing with BC Hydro for your electrical service
- Contemplating different insurance options with your current insurance carrier
- Or simply planning your move
As you consider moving to BC, consider these unique financial nuances. They are part of the broader picture, making British Columbia’s real estate market both challenging and rewarding.
2. Completion and Possession Dates
In BC, buying a home involves staggered completion and possession dates. This practice might seem unusual to those used to the real estate markets of other Canadian provinces like Alberta or Ontario. Here’s what this means for you as a buyer:
- Completion: This is the day you officially register your name on the property title. You now become the owner, start your mortgage cycle, and assume liability for the home, requiring insurance.
- Possession: Other provinces where completion and possession often co-occur. However, possession typically happens in BC at least a day after completion.
This staggered approach is designed to ensure smoother financial transactions. It helps avoid scenarios requiring bridge loans. These are short-term financial solutions used when there’s a gap between selling your current home and purchasing your new one.
In BC, this spacing allows transactions to close effectively. It ensures that funds from the sale of your previous home are secured before you commit to purchasing your new property.
“It’s smart. Why not save some money by avoiding a bridge loan and ensure the money is in the bank from your sale before giving it away for a purchase?”
Role of REALTORS® in Possession
Another unique aspect of BC’s home-buying process is the active role REALTORS® play during the possession phase. In other provinces, real estate agents are generally absent at the final possession stage.
However, BC’s realtors often accompany their clients to the property for a final walk-through. This ensures the home is in the same condition as when the offer was made.
They help check everything from appliances to potential damages or leftover refuse. This proactive approach by BC’s realtors reflects a commitment to ensuring a seamless transition for the buyer into their new home. It’s part of the comprehensive service that encloses everything, such as:
- Unpacking services
- Ensuring all add-on services like Internet service providers and BC Public Service utilities are in place.
“It’s smart. We love touring our clients’ new homes together the day of possession and want to be onsite in case any issues arise.”
3. Property Transfer Tax (PTT)
BC’s tax approach differs from others, like the Property Transfer Tax (PTT) and the Speculation and Vacancy Tax. Let’s explore these aspects, which are vital for anyone eyeing the real estate market in areas like Surrey or Vancouver Island.
The PTT is a notable financial obligation for homebuyers in BC. This is distinctly different from the land transfer taxes in provinces like Ontario or Alberta. Here’s what you need to know:
- Nature of the Tax: The BC PTT applies when transferring property ownership. It’s not a one-size-fits-all, but varies depending on the property’s value.
- Calculation: For homes under $2,000,000, the PTT is 1% on the first $200,000 and 2% on the balance. This makes the PTT a great consideration, especially in BC’s housing markets like Surrey, where property values can be quite high.
Also, prepare to factor this tax into your overall cost if:
- You’re not a first-time homebuyer
- Or if your purchase price exceeds certain thresholds
Unlike other provinces where such taxes might be structured differently, BC’s PTT can add a large amount to your purchasing costs.
“It’s silly. While I can appreciate the government needs funding, homes are incredibly expensive in BC and this just adds significant costs to purchasing a home.”
Speculation and Vacancy Tax
BC’s Speculation and Vacancy Tax is another unique financial aspect. This particularly impacts secondary home purchases.
This annual tax was introduced to address the housing shortage crisis in BC. This aims to discourage vacant homes in its major cities and redirect properties to the long-term rental market.
If you’re considering buying a secondary home in BC, especially in major cities, be prepared for this additional tax. It’s a factor that doesn’t usually come into play in other provinces and can affect your decision.
This is especially true if you’re not planning to occupy the property year-round. These taxes reflect BC’s efforts to regulate its real estate market.
It ensures a balance between availability and affordability. They might raise extra financial considerations, especially those from areas with a more lenient tax regime. But, they are integral to understanding the cost of housing and property ownership in BC.
“It’s silly. Let’s build more homes rather than taxing people who own multiple properties. Also, making it an opt-in process ends up catching many homeowners getting assessed the taxes accidentally.”
4. Legal and Regulatory Aspects in BC Home Buying
When purchasing a home in British Columbia (BC), certain legal and regulatory aspects are uniquely tailored to the province. These regulations are designed to protect both buyers and sellers, ensuring a fair and transparent process.
Let’s delve into two significant aspects: the BC Home Buyer’s Rescission Period and the role of REALTORS® in strata document review.
BC Home Buyer’s Rescission Period
The BC Home Buyer’s Rescission Period is a relatively new addition to the province’s real estate landscape. This was introduced to provide buyers with additional security.
This period allows home buyers to cancel an accepted offer within three business days, even if the offer has subjects. This provision is beneficial in a fast-paced and competitive market like Surrey or other hotspots.
It gives buyers a ‘sober second thought’, potentially backing out of a deal with a minimal penalty. If a buyer opts to rescind their offer within this period, they must pay a penalty of 0.25% of the purchase price.
While this may seem steep, it safeguards against rushed decisions in BC’s dynamic housing market.
“It’s kind of silly. It hinders the purchasing ability of better-qualified home buyers vs those who may be more at risk, levelling the playing field for all buyers (could be considered good or bad). It puts the seller in an awkward waiting phase as well.
Furthermore, the legislation allows the buyer 3 business days to change their minds, meaning weekends and holidays don’t count towards forcing the buyer to make a decision faster.”
Strata Document Review
In BC, reviewing strata documents are often handled differently than in other provinces. This task might be delegated to lawyers or professional strata document reading companies in other regions.
In BC, realtors typically review these documents on behalf of their clients. They play an active role in discussing the findings and implications with the buyers.
This approach can streamline the process and potentially reduce additional costs for the buyer. A knowledgeable realtor can offer insights into the following:
- The strata’s bylaws
- Financial health
- And other critical aspects
They ensure buyers are fully informed about their potential new home. In contrast, other provinces may rely more on legal professionals for this task. This adds an extra step and potentially more expense to the home-buying process.
Understanding these legal and regulatory aspects is crucial for anyone considering a move to BC. They form part of the security puzzle that protects you in what is likely one of your life’s most significant financial decisions.
“It’s silly. Passing the responsibility of reviewing the strata documentation over to a lawyer or another company only adds additional costs to the transaction for the Buyer.
While it is always good to have someone help review the documents with experience and a keen eye for detail, a well-trained REALTOR® should be able to fill this gap in for the buyer quite easily.”
5. Rent Control and Landlord Regulations in BC
BC’s rent control policies and tenancy regulations are tailored to balance the interests of tenants and landlords.
Rent Control Policies
BC’s approach to rent control is designed to protect tenants from steep rent hikes. But, they also consider the financial realities of landlords.
The government sets an allowable percentage for rent increases each year. For instance, in 2024, the increase is capped at 3.5%. This aims to provide tenant stability and predictability while maintaining fairness for landlords.
While these can be a boon for tenants, protecting them against sudden rent hikes, landlords must navigate these carefully. They need to ensure their rental income keeps pace with the cost of housing, mortgage rate fluctuations, and other commitments.
Fixed Term Tenancies and Eviction Rules
BC has specific rules governing fixed-term tenancies and the eviction process. In BC, a fixed-term tenancy agreement automatically converts to a month-to-month lease unless the tenant moves out.
This provides tenants with greater security. However, it requires landlords to be more strategic in their lease agreements.
Landlords in BC are limited in their ability to evict tenants. Evictions are primarily allowed for personal use of the property or significant renovations.
It restricts landlords’ flexibility but ensures tenant protection. This aligns with BC’s goal of stable and secure housing for its residents.
“It’s silly. While it’s popular for tenants to believe all landlords are multi-millionaire, globe-trotting elites, the reality is most are mom-and-pop investors who have rented out a second home and heavily rely on being profitable to be able to offer the dwelling as a rental.
Taking the profits out of renting a home and removing a landlord’s rights is disastrous for the rental stock in BC. We need to build more homes and let the market conditions dictate prices, not have the government do it. These policies heavily favour tenants.”
6. Short-term Rental Regulations
Short-term rentals in BC are subject to specific regulations aimed at preserving the long-term rental market:
Restrictions on Short-term Rentals
The BC government implemented the Short-Term Rental Accommodations Act. This legislation addresses the housing shortage and aims to regulate short-term rentals.
It prioritizes homes for long-term residents over temporary stays. The act gives local governments the tools to enforce rental bylaws. It also ensures that short-term rental units contribute to the long-term rental market.
You must be aware of these restrictions if you consider renting out secondary residences as short-term rentals. The act primarily affects secondary homes. It allows homeowners to continue short-term renting of primary residences under certain conditions.
These regulations reflect BC’s commitment to addressing its housing challenges. It ensures that properties are used to meet the long-term housing needs of British Columbians.
See this video:
“It’s smart. While I will miss visiting rental homes in various areas of BC for short term holidays, it does make a lot of sense for returning much-needed housing stock to the major municipalities.”
Embracing BC’s Unique Real Estate Journey
Don’t let the differences mentioned above discourage you from moving to one of the most beautiful areas in Canada.
Buying or selling a home in BC comes with its share of unique challenges and opportunities. However, the more surprises you can eliminate from the transaction, the better your experience.
If you are considering moving to BC from another province, contact the Germyn Group to discuss your needs and plans.
We will work together to create a plan to ensure you experience the highest levels of success and satisfaction in your relocation.
Check out this video for added insights:
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