Purchasing and Selling
Title - Joint
Tenancy or Tenancy in Common
than one person is to be registered on title to a property,
the names of each of these persons may be registered as either
joint tenants or tenants in common.
The basic difference between ownership of property by way
of joint tenancy and tenancy in common is that in the event
of the death of a joint tenant, the one-half interest of the
deceased person automatically passes to the survivor. In the
event of the death of a tenant in common, the share of the
deceased person passes to his or her beneficiaries as part
of his or her estate. All adults should have a will and this
is particularly important if you choose to hold title as Tenants
Prior to closing, we will require your instructions as to
whether you intend to be registered as tenants in common or
joint tenants. If only one person is on title this issue does
Please telephone if you have any further questions with respect
to the differences between owning property as joint tenants
or tenants in common.
If your purchase involves
a Strata Lot, please read the following section:
When you purchase a strata lot, then in addition to all aspects
of land ownership covered in the preceding pages, the Strata
Property Act applies. You should obtain a copy of the Strata
Property Act and read through it for your own information.
As an owner of a strata lot, you own the airspace within the
boundaries of the walls, floor and ceiling of your unit. The
land and the building itself (the "common areas")
are owned by you and all other owners of strata lots in your
Together you and all the other strata lot owners form what
is called a "Strata Corporation". The Strata Corporation
is like a small government. It taxes you (maintenance fees),
it makes laws (bylaws) and, like any other government, can
impose penalties for failure to comply with its laws. If you
are selling your unit, you must ensure that all monies that
are owing by you to the Strata Corporation have been paid
Before a sale of your strata lot can be finalized you will
require a "Form F" certificate from the Strata Council
confirming that no monies are owing by you to the Strata Corporation.
As a strata lot owner you have the right to attend meetings
of the Strata Corporation and to vote on matters of business.
You may wish to keep informed of the issues before the Strata
Corporation and exercise your voting rights*. (*If you mortgage
your Strata Lot, your mortgage company may vote for you in
certain circumstances). In particular, the bylaws of the Strata
Corporation are very important. They may restrict the use
of your strata lot with respect to rentals, children, pets,
and other matters. If the Strata Corporation has not passed
any bylaws, then those contained in the Strata Property Act
As well, you should keep in mind that no matter what the bylaws
are today, by following the correct procedures, those bylaws
may be changed for tomorrow. Your interests may thus be affected
and neither the Strata Corporation nor any of the owners will
be responsible for any loss you might suffer as a result of
the change in the by-laws.
Part of your strata maintenance fees will be applied toward
the payment of premiums to provide insurance for the land
and buildings, including public liability insurance. You should
ensure that the coverage is adequate, otherwise, if a claim
is made against the Strata Corporation which exceeds the insurance
coverage, you, and all the other owners of strata lots, will
be personally responsible for the payment of the claim to
the extent it exceeds the insurance coverage.
- Purchase through a corporation
versus personal purchase is usually a tax driven question,
so accounting advice is very important. The purchaser must
consider the drawbacks to corporate purchase, including the
on the marginal tax rate of an individual, the tax rate
on income derived from property may be higher for a corporation.
The capital gains tax rate of a corporation may be higher
than that of an individual.
Incorporating a company for the purposes of purchasing property
will cost approximately $1,000 plus additional costs, including
corporate records maintenance and accounting costs.
Incorporating a British Columbia company requires that there
be a majority of directors resident in Canada and at least
one director resident in British Columbia.
If the corporation is not a British Columbia Corporation,
a mortgage lender may require that the company be registered
in British Columbia, which will result in additional legal
expenses as set out above.
If a non-resident corporation is not required to register
extraprovincially in British Columbia before completing
a transaction, a Certificate of Good Standing will be required
from the incorporating jurisdiction, along with an opinion
letter from a solicitor in the incorporating jurisdiction,
in order to get mortgage financing in British Columbia.
A corporation which purchases property must be maintained
as long as the property is owned by the corporation.
Even though the property will be owned by a company, the
mortgage lender will generally require personal guarantees
from the principals of the corporation.
there are losses from the property, those losses cannot
offset personal income tax.
of the advantages of purchase through a corporation include:
If the principals of the company die, there is no change
of ownership of the property, which means that no probate
fees will be incurred on the property, only on the change
in ownership of the shares. If the shares of the company
are held outside of British Columbia they will be exempt
from the probate fees imposed in conjunction with a change
of ownership of the shares.
- If the company's only asset is the property, sale of the
property may be effected through sale of the shares of the
company, avoiding payment of the Property Transfer Tax and
the Goods and Services Tax
If you intended to finance
your purchase by a loan secured by a mortgage, it will be
necessary for you to advise us of the name of the lender who
will provide the loan and the lawyer who will be acting for
the lender. If we are asked to act on behalf of the lender
as well as for you, we are required by the Law Society of
British Columbia to advise you that you both have different
interests and recommend that each of you have independent
If after providing you with this advice you
still wish us to act for you, we will require that you and
the lender execute a consent, agreeing that should a conflict
arise which cannot be resolved, we will not continue to act
for either party and both parties will be required to obtain
independent legal advice. As well, please note that in these
circumstances information received from one party with respect
to this matter cannot be treated as confidential as far as
the other party is concerned.
The Provincial Government levies a tax on all transfers of
real estate (with the exception of some limited exemptions
for first time purchasers of principal residences). There
is a tax of 1% on the first $200,000 of the purchase price
and of 2% on the balance of the purchase price over $200,000.
This tax is payable on the completion date of the purchase.
Harmonized Sales Tax (HST)- this is a six
percent (12%) tax on:
- Purchase of new
- Resale of accommodations
that have been rented out for short term or nightly rentals.
- Some of this tax
may be deferred if the purchaser intends to rent out the
property for short term or nightly rentals.
- To defer, the purchaser
must register for a HST number and make the property available
for rental at least 50% of the time (to defer a portion
of the HST) or for 90% of the time (to defer all of the
- In addition, once
the purchaser becomes a HST registrant, the purchaser may
claim credits for the HST the purchaser pays on items such
as legal fees, hydro, cable and telephone.
- A HST registrant
must charge, collect and remit HST on nightly rentals, which
may, in some cases, be done through your property manager.
- The registrant is
also required to file an annual HST Return with Canada Customs
and Revenue Agency.
- In some instances,
a developer may permit a purchaser to self-assess HST, depending
on the nature of the development. For single-family dwellings
and townhouses, a developer will usually only permit self-assessment
where the property is owned by a corporation or a partnership.
A partnership may be created by having more than one person's
name on title to the property. Despite this possibility,
it is important to note that where an individual purchases
the property, the developer may require the owner to remit
the HST and apply for a refund (a lengthy process) even
where the property is available for rental 90% of the time.
Municipal Property Taxes
These taxes are generally due on approximately July 1st
each year (only properties in the City of Vancouver have
an advance billing due date of February 2nd). The date for
payment of utilities (i.e. water and sewer) varies according
- The tax assessment
is mailed to the property address in June.
- Confirm with the
property manager that they will not be paying the property
taxes for you (they do not usually do so).
- There is a late
payment penalty levied on all tax assessments that are not
paid by the due date.
- If the property
is your principal residence, there is a grant available.
The grant form is generally included with your tax assessment.
We do not normally make
adjustments with respect to gas, telephone, cablevision, electricity
or other similar matters and we suggest that you contact the
appropriate utility offices prior to the completion date to
arrange for service.
We do not normally confirm:
- (a) municipal zoning;
(b) compliance with environmental legislation or regulations;
(c) compliance with applicable land use regulations or local
health, sewer and drainage, fire and building by-laws, all
of which may affect the use of the Property;
(d) any possible heritage designation of buildings on the
(e) municipal or local improvement assessments or charges
which do not appear on property tax notices;
(f) that suites on the property are legal or illegal;
(g) that buildings comply with zoning and set-back requirements;
(h) that proper permits have been issued for all buildings.
We recommend that you consider whether these matters are
relevant to the Property and your intended use thereof.
If you wish to confirm these matters, please contact the
relevant local authorities. If you instruct us, we can conduct
these inquiries on your behalf, but of course, our fees
and disbursements would increase accordingly. Unless you
have stipulated for special contractual conditions, your
agreement will not contain any promises by the present owner
as to the quality or condition of any buildings you are
The Income Tax Act (Canada) provides that a purchaser from
a non-resident vendor may be liable to pay taxes payable by
the vendor on the sale of property if the vendor does not
pay the taxes. If you are aware that the Vendor is not a resident
of Canada, please advise us immediately so that we may take
steps to avoid any tax consequences to you which may arise
as a result of the Vendor's non-residency.
Corporate Foreign Exchange Trader
Western Union Business Solutions
3224 - 1055 Dunsmuir Street - Bentall IV
Vancouver, British Columbia V7X 1P4
Phone: 604-482-6000 (Direct- Dealing Desk)
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You will have instructed
your solicitor to record your name(s) and address on title
to the property. The address shown on title is very important
as it is the address to which property tax notices will be
sent by the City or Municipality, and the address to which
important notices from the Land Title Office will be sent.
In the event you move but retain ownership of this property,
you should notify both the Land Title Office and the City
or Municipality of your change of address.
We will telephone you
when the necessary documents to complete the purchase of the
Property have been prepared and we will arrange a time for
you to come to our offices to sign them. Please bring photo
identification (eg. Driver's License or Passport) with you.
In accordance with Law Society guidelines, the balance of
money required from you to complete your purchase must be
in the form of a certified cheque or bank draft.
Please note that your
transaction may close at any time during the day of completion.
All transfers and other documents relating to the transaction
must be registered at the Land Title Office (which closes
at 3 p.m.) before you become owner and before funds are sent
to the Vendor's solicitor or notary. When the Vendor's Solicitor
receives funds you will be entitled to keys to the premises.
Unfortunately, we cannot guarantee a specific time of day
when closing will be complete and accordingly you should not
make inflexible plans for moving times if completion and possession
are to occur on the same date.
Please be sure that
you are available on the day of closing and let us know where
you can be reached.