Surrey New Construction Lawyer
Purchasing a newly constructed home can have its own rewards and challenges. The rewards are things such as having the home custom built for you, no other person has lived in your home and everything is covered under a new home warranty. Issues such as draw mortgages, GST treatment and Property Transfer Tax exemptions are not present when buying a used home. We can help you with the purchase of your newly constructed home by offering timely advice at a cost-effective price. Contact our Surrey new construction lawyer today.
Before you purchase a newly constructed home:
- Choose a builder, if applicable. If you are using a builder to construct your new home, you should have a lawyer review your building contract before you sign as there are a number of issues that owners may not be aware of that can cause challenges down the road.
- If you are looking for a newly constructed home that is already completed or a pre-sale condominium/townhouse, you should choose a realtor to assist you. Typically, the builder will have their own form of purchase contract that you must use. As such, we strongly recommend that you have the contract reviewed with a lawyer before you sign.
Buying a non strata home that is being constructed:
- The builder will have their own form of contract that should be reviewed by a lawyer before signing. Common issues are as follows:
- Schedule of payments to the builder;
- How to deal with builders’ lien holdbacks;
- Ensure that the builder has registered the home for 2-5-10 year new home warranty insurance protection;
- Ensure the home plans comply with any building schemes for the subdivision;
- Determine if there are any late-comer charges associated with the property;
- Ensure that there is insurance on the home during construction;
- Provisions to assist in a dispute with your builder;
- How to allocate and apply for the GST rebate, if applicable.
Buying a pre-sale condominium:
- The Developer will have their own form of contract that should be reviewed by a lawyer before signing. Common issues are as follows:
- Reviewing the Disclosure Statement – this a typically a lengthy document that all developers must give to their buyers. It contains information about the developer itself, the actual development, the strata plans, the bylaws, the charges against the title, floor plans and is subject to change at the sole discretion of the Developer;
- Provisions regarding the amount of the deposit, which are increased in stages as the development proceeds, release and forfeiture of the deposit if there has been a default under the agreement;
- Assignment provisions;
- Understanding the obligations of you and the Developer if the construction schedule is delayed;
- Special closing conditions required by the Developer such as requiring your lawyer to deliver purchase funds via certified cheque or bank draft (any others ????).
GST for Newly Constructed Home/Townhouse/Condominium:
Unlike used homes, newly constructed homes are subject to GST at the rate of 5% of the purchase price. However, newly constructed homes are eligible for a GST rebate provided that certain conditions are met:
- You or a qualifying relative (such as your spouse, parents or children) must use the home as their primary residence upon taking possession;
- If the purchase price of the new home is $350,000 or less, then you are eligible for the full amount of the rebate to a maximum of $6,300.
- If the purchase price of the new home is greater than $350,000 and less than $450,000, then you may be eligible for a partial rebate. The higher your purchase price, the less the amount of the rebate.
- If the purchase price of the new home is greater than $450,000, then there is no GST rebate available.
You must submit the appropriate documents to CRA to apply for your rebate. It can take up to 6 months for the rebate to arrive. Sometimes, builders will absorb the rebate by including a term in your purchase contract that you will assign the rebate (if eligible) back to the builder and the builder will credit the rebate against your purchase price. That way, the builder will apply for the rebate from CRA and not you.
Property Transfer Tax for Newly Constructed Homes:
The Province of BC charges Property Purchase Tax (“PTT”) on the transfer of an interest in real estate. There are a number of exemptions. One of those exemptions applies to the purchase of a newly constructed home provided certain conditions are met:
- You are an individual and a Canadian citizen or permanent resident of Canada;
- You must use the home as your primary residence;
- The area of the land that your home is located must be 0.5 hectares or less to qualify for the full exemption;
- The purchase price of the newly constructed home (not including GST) must be $750,000 or less to qualify for the full exemption.
- If the purchase price is greater than $750,000 and less than $800,000, you may qualify for a partial exemption. The higher your purchase price, the less the amount of the exemption.
NTD – more personal by not referring to “lawyer or notary” and just assume they are using our firm???