Everything first-time home buyers need to know about purchasing a home in Squamish
It’s a brand-new year and 2017 looks to be an ideal time for first-time home buyers looking to enter the property market. With the BC government announcing the BC Home Partnership Program, a handful of other programs and rebates for first-time home buyers, and loads of inventory and new townhomes on the market in Squamish, 2017 is the perfect time to finally realize the dream of home ownership.
Squamish is positioned as the ultimate location for first-time home buyers. Less than an hour to both Vancouver and Whistler (and much more affordable than both), with a young family-oriented population (with an average age of 37), and a world-class outdoor playground and mountain culture it’s really no surprise young singles, couples and families are choosing Squamish to settle down. If you are a first-time home buyer and are considering Squamish, this article is intended to inform you of everything you need to know about buying property in Squamish in 2017.
First-time Home Buyer’s Programs
First-time Home Buyers Program
The First-Time Home Buyers Program reduces or eliminates the amount of property transfer tax paid on a first home. Property transfer tax is one percent on the first $200K plus two percent on everything above $200K. An additional three percent on an amount over 2 million. For a $400K property, the property transfer tax would be $6000. To qualify for this program applicants must:
- Be Canadian citizens or permanent residents
- Have lived in BC for 12 consecutive months or filed two income tax returns in the last six years
- Have never owned a home anywhere before (anywhere in the world)
- Have never received a first-time home buyers’ exemption or refund
The property must also meet certain criteria to be eligible including:
- Be located within BC
- To be used as a principle residence (not an investment property)
- Have a market value less than $475K
- Be under 1.24 acres
- Partial exemptions may apply for properties up to $500K, on lots larger than 1.24 acres, and properties which have a building on the property other than a principle residence (carriage home, basement suite etc.)
First-time Home Buyers Tax Credit
When filing tax returns, eligible first-time home buyers can claim the First-Time Home Buyers Tax Credit of $5000. This amount is per property, therefor couples are entitled to a total of $5000. This credit can be applied for when filling out a federal tax return on line 369 of the form. To be eligible applicants must have purchased a qualifying home within the financial year. A qualifying home is defined as a single-family home, semi-detached home, townhouse, mobile home, condo, and duplex/triplex/fourplex.
GST Rebate on New Homes
The GST Rebate on New Homes Scheme is available to all buyers of new or substantially renovated homes (new developments, pre-sales, etc.). This rebate is available for homes that are the principle place of residence (non-investment) and which are under $450K. Buyers can apply for a rebate of 5 percent on homes $350K or less, the rebate is equal to 36 percent of GST to a maximum rebate of $6300. There is a proportional rebate for homes between $350K and $450K.
Getting A Mortgage Pre-Approval
When getting serious about buying a new home, getting a mortgage pre-approval is the first step. A mortgage pre-approval will qualify a buyer and outline the maximum borrowing amount. Buyers can get a mortgage pre-approval direct from a mortgage lender (bank) or from a mortgage broker. Mortgage brokers act as a liaison for buyers negotiating the best terms and rates on the buyer’s behalf. They have access to the best rates across all lending institutions and are paid a commission by the lender so there is no fee to buyers.
In order to complete a pre-approval income documents are needed (employment letters, paystubs, two years of CRA notice of assessments and in some cases a full tax return with T4s for the last two years). Michele Ellis of The Mortgage Studio Squamish notes, “a full pre-approval is advised before finding a home so there are no surprises when shopping for that perfect property… there is nothing worse than falling in love with a home, only to find out you don’t qualify for it.”
According to Michele a mortgage pre-approval will not only give buyer’s the confidence to know what they can afford, it will also lock-in interest rates for 120 days which, considering the current interest rate environment, is very important.
Finding the Right Real Estate Agent
Once you know a realistic picture of what you can afford, the next step is to find a licensed real estate agent to help you with the process of buying a new home. In Canada, buyer’s agents look after the best interest of buyers at no charge (under most circumstances). Buyer’s agents will assist buyers with every step of the process including:
- Find suitable listings that are within budget
- Answer questions about the community and process of buying a home
- Connect buyers with professional services such as lawyers, building inspectors, mortgage brokers etc.
- View open houses and homes for sale
- Provide expert advice on market value
- Draft contract of purchase and sale paperwork, inserting conditions and submitting offers on buyer’s behalf
- Negotiate the offer within the best interest of the buyer
- Facilitate and advising any subjects to sale
- Oversee inspections and deficiency walk throughs
- Ongoing support and guidance
When choosing a real estate agent to represent you as a first-time home buyer you will want to find someone with a deep understanding of the current market, special programs available to first-time home buyers, and someone who understands your unique goals and needs. Choosing an agent from a reputable real estate brokerage is always recommended and finding someone with a proven track-record of success is suggested. Once you have selected the right agent a Working with a Realtor form will be completed, this will acknowledge an agency relationship between the buyer and the Realtor. It is not a contract, but a declaration of the agent-buyer relationship and resulting responsibilities.
Choosing The Right Property
Once you understand what you can afford it is time to make a list of must-haves and nice-to-haves. Buyers working within a budget may need to compromise on some of their nice-to-haves, while others may find a property that ticks all the boxes within their price point. Make sure to download the Free Home-Buyers Wishlist below to create a list of must-haves and nice-to-haves when searching for your new home.
Download Home Buyer's WishlistOnce you have a clear picture of your must-haves it is time to browse current homes for sale that meet your criteria and sign up for property alerts. Communicating this information to you real estate agent will ensure they are on the look out for new listings that meet your specifications. If you are moving to a new area it’s best to get a feel for the place before finding your perfect home. This can be done by organizing a tour of the local area, talking to friends and family who live there already, and checking out online resources, community groups and social media channels.
Going through these steps will help you determine which neighbourhoods you prefer (take a quiz and find out which neighbourhood is right for you) and what style of property you’d like to buy, whether it’s an older single family home, townhome pre-sale or existing condo.
Buyers moving to Squamish in 2017 will have a choice of several new townhome developments set to complete within the year, pre-sales for upcoming development projects and a good inventory of re-sale homes, townhomes and condos. The market in Squamish is currently balanced and with over 20 years of projected growth led by big projects such as the Oceanfront Development (Newport Beach) meaning it’s an excellent time to move to Squamish.
Buying your first home can be an exciting yet unnerving experience. That’s why working with an experienced and knowledgeable buyer’s agent is always recommended. At Move to Squamish we have over 25 years of experience representing buyers in Squamish, working within the world’s most recognized real estate brokerage, RE/MAX. If you are thinking of buying your first home in Squamish, make sure to contact the team at Move to Squamish to let us help you find your perfect home.
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Organize a tour of Squamish
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