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You’ve decided to buy a Condo or Townhouse – now the excitement begins. But it’s important to understand that there are crucial differences between buying a Strata Property and a detached, single-family home.
For starters, when you purchase your dream Condo or Townhome, you’re also becoming a part owner of the entire building or complex. Maintenance on the jointly-owned components are funded through a monthly strata fees that goes into an operating fund to cover common expenses to maintain the building or occur more than once over the course of a year. This can include building insurance, gardening, garbage collection, water, maintaining common property, upkeep of amenities, cleaning and repairs.
Whether you are buying a detached home or strata property, the key is to be informed. To help, we’ve assembled the following tips for Buyers of a Condo or Townhouse in Vancouver:
When purchasing a strata-titled property, there are many factors that can dramatically impact future costs and ultimately resale value.
As a Buyer, it’s important for you to consider the potential for additional costs that may damage you financially and make future resale difficult. For example – rainscreening. The cost of a retroactive rainscreen could be up to $150,000, or more, per unit. Other considerations include the proactiveness of the strata council, maintenance schedule, bylaws, building policies, and strata documentation.
With more than 70 years of experience, the MINT Home Team knows how to review and interpret strata minutes and documentation. And with the number of deals we’ve successfully negotiated over the years, there is a good chance we have first-hand knowledge of the property you are considering.
Parks, neighbourhood amenities, noise, the possibility of future development, city zoning plans, crime levels, transportation access and a general sense of community are all aspects that affect your quality of life in your new neighbourhood. These factors, not to mention schools and civic facilities, will not only impact your enjoyment of the property, but may also affect its future resale value.
We are experts on the neighborhoods we serve, ensuring you make an informed decision, and choose the perfect neighbourhood for you and your family.
MAINTENANCE FEES (aka Strata or Condo Fees):
To meet its expenses, the strata corporation must have – and owners must contribute to – an operating fund and a contingency reserve fund (CRF). An Operating Fund is for common shared expenses and the annual budget. Examples of operating fund expenses include such things as monthly utilities, seasonal landscaping, weekly cleaning, major or minor maintenance, strata property management, and annual insurance.
A Contingency Reserve Fund (CRF) is effectively the ‘Savings Account’ for the strata. These monies wold be for common expenses that usually occur less often than once a year or that do not usually occur. Examples of CRF expenses include such things as replacing the roof, upgrading the elevator, exterior painting and other capital projects.
Not all home inspections are of the same quality. Without a thorough Condo or Townhome inspection completed by an insured professional, you may end up buying a property without being fully aware of potential health, safety and/or structural issues.
The MINT Home Team will provide you with a list of inspectors from which to choose – each is highly qualified to identify any potential issues that may be present in the property. Our list of inspectors includes many with deep and relevant experience specific to strata properties. We ensure that our inspectors assess all aspects of the building that your unit is a part of, and consider issues that may be present depending on age and stage of the building.
Property Transfer Tax (PTT):
In addition to your down payment, a Buyer is also responsible for the Property Transfer Tax. This is calculated as:
1) 1% on first $200,000
2) 2% of the price between $200,000 – $2,000,000
3) 3% on the price between $2,000,000 – $3,000,000
4) 5% on the price over $3,000,000
Foreign Buyers Tax:
A new 20% tax is added to the Property Transfer Tax when a purchaser, who is not a Canadian citizen or permanent resident, purchases residential real estate property in Metro Vancouver, Fraser Valley, Capital Regional District, Nanaimo Regional District and the Central Okanagan.
GST on New Home Purchases:
GST is a 5% tax payable on the purchase price of newly constructed or substantially renovated residential homes. It is important that you are aware of how this tax will impact you. We stay on top of the most current legislation and payment schedules and will advise you on how this factors into the total cost of your purchase.
As a Non-Resident of Canada, you may find it difficult securing a mortgage. To qualify, you may be required to provide documentation detailing a certain level of liquid assets. If you expect this will be an issue for you, we will help you locate a Vancouver-based specialist with specific expertise in this area. Expect to pay a 50% down-payment with the potential option to finance the difference.
Expenses associated with legal fees, registration or removal of your mortgage and your name(s) from the title, insurance, GST (if new), remaining property taxes, etc. must be paid as part of the closing costs upon completion.
Ready for the next step? Book an appointment with one of our experts today. We will meet with you to review our customized Buyer’s Package, discuss your plans, and listen to all your needs.