PTT - Property Transfer Tax is payable to the province of BC by purchasers of real estate. The amount of the Property Transfer Tax is 1% on the first $200,000.00 of the property’s fair market value, 2% on the amount between $200,000 and $2,000,000, and 3% on the amount between $2,000,000 and $3,000,000, and 5% of the remaining fair market value.

First Time Buyer Exemption - If a first time purchaser buys a primary residence for under $500k they will be exempt from PTT.

Newly Built Home Exemption - Buyers will be PTT exempt if brand new home purchase price is under $750k.

Foreign Buyers Tax - This is a 20% tax that is payable by anyone other than a Canadian citizen, permanent resident or a person registered under the Provincial Nominee Program. This tax applies to all properties in the Greater Vancouver Regional District, Capital Regional District, Fraser Valley Regional District, Regional District of Central Okanagan and Regional District of Nanaimo.

GST - Only applies to brand new properties and is 5% of the purchase price. Some rebates apply if purchase price is under $450k.

Speculation Tax - This BC tax applies to anyone not residing in or renting out property (in urban centres above) for at least 6 months a year. In 2019 tax rates are moving to 2% to foreign investors, 1% for Canadian citizens, and .5% to BC residents. This is over and above your standard property taxes.

I firmly believe that it's important to get into the housing market as soon as one can afford to do so. The key is to think long term and pricing won't matter if you keep the home for 10+ years. There's a case to be made for renting as it can be less expensive than mortgage payments. For disciplined renters, you can invest the extra money and build equity this way. But in reality, most renters don't save as much as they think they will. Homeowners essentially have a forced savings plan which makes building wealth easier.

So is Vancouver in a bubble? Really hard to say. I don't believe condo prices will drop more than 20%, and more likely to continue to go up in value with limited land supply. I can see the high end multi million dollar homes dropping in value more, simply because most locals can't afford to pay 2-3-4-5 Million $$ for these places. Interest rates are likely to stay low for some time, and demand for real estate is high in this growing city. Although Vancouver is very unaffordable for many people, I don't see any major triggers to set off a housing market crash.

The best advice I can give is to buy real estate if you can afford it. Live in it, love it, and hold it long term. It will most certainly pay off for years to follow. Please contact me anytime if you'd like to chat more about getting pre-approved in Vancouver.

Wealth has been tied to real estate ownership for centuries. It was the Italian economist Wilfredo Pareto who established the Pareto Principle (or 80/20 rule) in 1896. Pareto found that 80% of the land in Italy was owned by 20% of the population. The same is true in most countries around the world today. This teaches us that home ownership, both primary residences and investment properties, is very important and can build tremendous wealth over time.

Of course leveraging yourself with a lot of mortgage debt can also work against you. In times where prices fall, interest rates rise, and/or vacancy rates go up, property owners must be prepared with the necessary liquid assets and income to weather the storm. It's important to set up your mortgage portfolio with the appropriate terms in order to be able to qualify for future mortgages factoring in affordability.

I firmly believe everyone should purchase a primary residence if they can afford it. From there, it makes sense to acquire an investment property, which could also be a house with a basement suite. Duplexes, triplexes and four-plexes are great investment properties as rental income vs cost (i.e. cap rate) can be better than some single unit properties. Cash-flow can be higher in rural areas compared to the larger cities, but may have lower price appreciation. In most cases buying real estate is not a 'get rich quick' scheme. Like Warren Buffet's investing strategy, it's more about long term planning and holding onto valuable assets. This is a tried and tested method for building wealth over time. Don't wait to buy real estate; buy real estate and wait.

In practicing what I preach, I purchased two investment properties in the last two years in Prince George BC with a business partner. It definitely took some work and money to get these properties fixed up and rented. As of today things are going well with the duplex (3 units) and single family house all fully rented out. My plan is to acquire more investment properties in the future, and you can too by following these steps below.

1. Make sure you have 20% or more to put down on the investment property. You can sometimes take this from your home equity or a line of credit if there is room there.
2. Confirm that your income is high enough to service all your debts (debt service calculation with help from a mortgage broker).
3. Fall in love with the numbers, not the property. Look for properties where the math is good in terms of rent vs cost. A good example is getting $1000 in rent for every $100k spent, which can be found in some Canadian cities.
4. Just do it. The easiest way to do it is to purchase in the city where you live, otherwise you can hire a property manager.

• Turn-key: we provide admin, payroll, and lender account set-up.
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The bottom line is that there is no perfect time to buy a house or get a mortgage. If you are able to find a home you love and afford and sustain a mortgage payment then why not do it. Vancouver is now a buyers market and deals can be had for agressive shoppers. Interest rates are still very low with 5 year fixed rates starting at 5.50%. If you'd like to start searching for a place to buy give me a call and I will put you in touch with a good realtor.

Refinancing your existing mortgage is a very popular option if you are looking to pull equity out of your home. People usually decide to refi for one of two reasons: 1. They'd like to use equity on a down payment towards a new property. 2. They'd like to consolidate debt and have one low monthly payment. Of course the best option is to be mortgage free but that is just not the reality for many Canadians. As well, some banks will lend up to 95% of the value of your home.

Until next time.. Happy November!

The Vancouver market has slowed down and prices are down roughly 5% in the last few months. There are some better deals to be had in this buyers market. Have a great day and happy rainy season!

Another popular question these days pertains to the housing market situation in BC. Prices have leveled off and dropped slightly in some areas. Could the market dip further? Yes. Will you save money by waiting until next year to buy? Maybe. Interest rates are expected to be going up this year and next. Even if you manage to purchase a discounted house in the future, there is a good chance you will be paying more interest on it. Your total monthly cost (principal + interest) could be the same if not more. It's very difficult to predict the future, but Vancouver is probably always going to be the most expensive city in Canada. If you'd like me to help you secure a mortgage please give me a call anytime @778.861.3336.

Happy House Hunting!

In other news.. mortgage interest rates have been staying low and home unit sales in Vancouver have dropped significantly. There are some deals to be had for home buyers with increased real estate inventory in the lower mainland. Rates are expected to rise marginally over the next year or two to help ease inflation.

Mortgage lines of credit have become more popular in recent years. If you have equity in your home and looking to refinance, a line of credit mortgage will offer the most flexibility. Get a credit line of up to 80% of your home's value (w/ no insurance fees) and use the equity to pay off other debts or to buy other property. Please contact me to for more details on how these mortgages can be set up.

Have a great August and enjoy the rest of the Summer! 

I just attended a conference in Vancouver and listened to well known economist Benjamin Tal. He is predicting interest rates to go up in 2009 due to inflationary pressure. You can expect the current prime rate of 4.75% to go up 100-150bps over the next year.  Fixed rate mortgages will likely be over 6% as a result.  Stay tuned..