This will shed some light on the best prep work for you when thinking of purchasing. You know you’ll need the bank’s money, and here is how to get it!

Your bank or mortgage broker will need you to provide:

• Verification of Salary/Employment/Income usually at least 2 years worth T4’s or T1’s and Revenue Canada Notice of Assessments

• Letter of Employment (on company letterhead) stating start date, full or part time, wage or salary amount
• Current paystubs with year-to-date earnings

• Copy of any Asset Statements (RRSP, GIC, RSP, Property, Stocks, Bonds)
• Bank statement showing cash

 If financing on your own isn’t in the cards:

• Gift letter – signed by both parties – (when applicable)

copy of gift deposit in applicants account – 15 days prior to close

When the purchase is made, your mortgage broker will need:

• Copy of Contract of Purchase and Sale, with any addendums
• Property disclosure statement
• Title search
• Copy of MLS listing info sheet
• Current appraisal – if required

Closing Costs to consider:

Property Transfer Tax (unless exempt as a first time homebuyer, yay!)

Legal Expenses, conveyancing costs

Municipal Tax holdback

Appraisal

CMHC/GEIMCO mortgage insurance fee (if applicable)

Survey Certificate OR title insurance

Home inspection

Home insurance

Great Local Mortgage Brokers:

Shawn Olma, Mortgage Alliance, 102 – 483 Main St Penticton BC (250)490-8090 [email protected]

Campbell Watt, Dominion Lending Centres, 437 Main St Penticton BC (250)462-7687 [email protected]

The Form B has gone through a continual evolution throughout it’s life, disclosing important information about the current status of strata units in any given development.

The most recent update to the form is of supreme importance to understand the nature of control afforded to the Strata unit holder of parking stalls and storage lockers. It is now mandatory, as of January 1, 2014, for Strata Corporations to disclose how parking and storage lockers are allocated to strata lots on the new Form B. Now this may seem to be an obvious disclosure, but believe me, this simple disclosures’ history has proven anything but ‘obvious’.
Many legal battles have been fought over the perceived rights of use for these strata items. Let me take a moment to give an example:

“The recent decision of Blackall v. Jarrold et al.3 concerned a dispute over parking. In Blackall, the buyers of a strata unit sued the sellers for negligently misrepresenting the number of parking stalls included in the sale. The Property Disclosure Statement stated that “parking stalls 598 and 601 are included in the purchase price along with storage locker 291, all of which will be assigned by the buyer on completion date.” Both the buyers and the sellers believed that the parking stalls were designated as limited common property (LCP), and thus for the sellers’ exclusive use.
In fact, only one of the stalls was designated LCP. While the original purchasers of the strata lot had paid the developer $5,350 for the use of the second parking stall at the time of their purchase, neither they nor the developer took steps to amend the strata plan. Thus the second parking stall, as common property, remained under the control of the strata corporation.”

In this circumstance the court decided that the Buyer, and their representative had not fulfilled their due diligence by reviewing the available strata plans which in this case would have designated only the one parking stall as limited common property for their exclusive use.
Although the Seller was not forced to pay any damages in this case, surely, one can see the damage done to the Buyer by this negligence. If you and your partner each had a car you would now be forced to rent a stall from the strata corporation for that second vehicle. Although likely a minor expense in some areas (South Okanagan) it could be a major problem if you lived in Vancouver where parking stalls can run at a premium. If downtown, you could be looking at an extra $200 a month. Not an immaterial difference if you expect to live there for say 5 years, thats an extra $12,000 in expense, just for parking!
Here is an example Form B for referencing these much needed additions. The devil’s always in the details… Example Form B

Reflecting the new reality of buying real estate in British Columbia, where the average home is now over $500,000, the government has increased the exemption amount by $50,000 from $425,000 to $475,000 for first time homebuyers! This is a huge benefit, as so many homes will fall into this price category, and will save buyers roughly $7,000 in taxes at the time of purchase.

There is also a $50,000 increase in the partial exemption, which has been increased from $450,000 to $500,000 on properties larger than .5 hectares and that have a secondary building besides the principal residence.

To qualify for an exemption from the BC property transfer tax, at the time the property is registered you must:
• be a Canadian citizen or permanent resident
• have lived in B.C. for 12 consecutive months immediately before the date you register the property or filed at least 2 income tax returns as a B.C. resident in the last 6 years
• have never owned an interest in a principal residence anywhere in the world at any time 
• you have never received a first time home buyers’ exemption or refund
and the property must:
• be located in B.C.
• only be used as your principal residence
• have a fair market value of: 
◦ $475,000 or less if registered on or after February 19, 2014
• be 0.5 hectares (1.24 acres) or smaller
You may qualify for a partial exemption from the tax if the property:
• has a fair market value less than: 
◦ $500,000 if registered on or after February 19, 2014
• is larger than 0.5 hectares
• has another building on the property other than the principal residence

History of the BC property transfer tax

When the province first introduced the Property Transfer Tax (PTT) almost a quarter of a
century ago it was difficult to foresee the tremendous economic growth or the high cost
of housing that exist today in British Columbia.
First introduced in 1987 by the Social Credit government of William Vander Zalm, it was
conceived of as a tax on the wealthy. It was believed that the 1 percent tax on the first
$200,000 on the cost of a home was modest and that the 2 percent tax over that would
apply to only 1 in 20 buyers.
But times have changed and the exact opposite is now true. In 2009, the 2 percent levy
applied to more than 88 percent of the homes sold in British Columbia (even more today, 2014). The wealth tax has become an unfair tax that inflates the cost of housing, erodes affordability

and discourages labour mobility.
In the city of Vancouver, house prices have skyrocketed over the last 25 years. Whereas
the average price of home in 1987 was under $200,000 – that same property in 2011
costs a breathtaking $760,000.
What might have been considered as a reasonable down payment on a home in 1987 is
today equal to the value of the PTT. That average sale price for home in Vancouver will
in fact cost an additional $13,200 in PTT in 2011.
And every time the house changes hands, the PTT escalates and inflates the cost of the home, attacking affordability and sucking money out the rest of the economy.
Property transfer taxes are often described as the most hated and unfair taxes in
Canada and nowhere in country is the provincial land transfer tax more burdensome
than in British Columbia. In Ontario, the province takes $2,725 on a $300,000 home. In
B.C., the province demands $4,000.
BC ranks worst among all provinces in terms of burden of land transfer taxes on
homeowners. In fact, British Columbians pay 222% more in land transfer taxes per
transaction than the average Canadian and the BC Government levies a PTT rate that is
129% higher than the average for Canadian provinces. Higher property prices are not solely to blame for this scenario; prices in British Columbia are 45% higher than the Canadian average, so the inequitable structure of the BC Government’s PTT adds an additional burden of up to 177%.
Government revenues from the tax have soared from $140 million a year in 1987 to well
over $1 billion today.
This move to increase the exemption is well past due, and is a small measure against a massive structural problem for real estate transactions in BC, but it’s better than nothing!

Normally one can approach new regulations with a certain level of skepticism; so often we find them ineffective and just a costly impediment to conducting ones business. They are often created for the sake of a silly lawsuit that happened somewhere, sometime (Susie fell and broke her arm… Again, but let’s make this time your fault!).
However, I can say with confidence that depreciation reports are the best thing to happen in the regulation of Strata corporations in a very long time.

Strata corporations in British Columbia need to obtain depreciation reports every three years unless they hold an annual 3/4 (three quarter) vote to exempt or have four, or fewer, strata lots. There are different timing requirements for the first depreciation report depending on when the strata corporation was formed:

For strata corporations formed on or before December 14, 2011, a depreciation report is required by December 13, 2013.
For strata corporations formed after December 14, 2011, a depreciation report is required within 6 months after their second AGM.

Depreciation reports help strata corporations, including bare-land strata corporations, plan for the repair, maintenance and replacement of common property, limited common property and common assets over a 30 year period.
The report must contain:
▪ A physical inventory of the common property and assets.
▪ Anticipated maintenance, repair and replacement costs for common expenses projected over 30 years.
▪ A financial forecasting section with at least three cash flow funding models. Depreciation reports provide useful information to strata lot owners,
prospective purchasers, mortgage providers and insurance companies.
Depreciation reports are also known as reserve fund studies in other jurisdictions and have been a standard requirement in most Canadian provinces.

Although Strata corporations can elect to exempt themselves from conducting the report, I would see this soon becoming a recognized disadvantage. Who would prefer to know the ages of components in a given building, remaining economic life and estimated costs of maintenance or replacement – I would think, all hands go up!

The South Okanagan real estate market of 2013 went through a period of stabilizing and appears to be building a floor for home prices and levels of activity. There were 8% fewer listings throughout the year at 4,668 units and 6% more listings reported sold of those listed at 1,614. These factors of supply and demand are positive signs of a balancing market.

Taking a quick look at the single family home market, prices are down in what I would call moderate fashion considering the tumultuous few years of the global economy.

Single Family Homes:

Penticton: December 2008 – $421,319 December 2013 – $362,572 -14%

Summerland: December 2008 – $481,973 December 2013 – $395,090 -18%

Oliver: December 2008 – $358,935 December 2013 – $297,268 -17%

Kaleden: December 2008 – $592,493 December 2013 – $453,711 -23%

Naramata: December 2008 – $542,927 December 2013 – $626,776 +15%

We’ve seen multiple offer situations over the past few months that have been almost non existent (unless on foreclosed properties) for the past few years. This is a great sign that people are actively pursuing their goals and are no longer waiting on the sidelines.

The consensus view among industry professionals is that 2014 is shaping up to be a much stronger year than we have experienced for quite some time.

Although prices may not increase just quite yet, we do see them stabilizing.

This makes for a great time to make transitions within the south okanagan.

If you ever want to discuss ideas you’ve had or goals you want to act on, please get in touch with me anytime!