Quick Reference Guide For Buyers

Highlights of Canada Mortgage & Housing Corporation [CMHC] or [G.E. Capital]

5% DOWN RULES:

• Maximum purchase price: $300,000 in Greater Victoria
• Minimum down payment: 5%
• Minimum duplex down payment: 7.5%
• Minimum mortgage term: 3yrs.
• Gifts for the down payment to be documented [ a specific form is required ] and deposited to the buyers' account 30 days prior to an offer.
• Buyers must have 1.5% of the purchase price available for closing costs. These funds may be borrowed, however re-payment must be within one year, and this amount has to be included in the debt service ratio.

HIGHLIGHTS OF PROPERTY PURCHASE TAX RULES

An exemption is available when;

• Maximum purchase price: $275,000
• One year residence in B.C.
• Cannot have owned a residence previously, anytime, anywhere.
• Minimum term of the mortgage; 1 year closed.
• No more than $11,000 can be re-payed in the first year.
• Tax exempted must be payed if property is re-sold within the first year.
• Maximum down payment; 30%
• Land cannot exceed 1.24 acres or exemption is on a sliding scale.
• All improvements land must be classified as residential by B.C. Assessment Authority.
• If in joint ownership, and only one person is exempt; 50% of tax is payable.

HIGHLIGHTS OF RRSP HOME OWNERSHIP RULES

Classification of who is a first time buyer differs from property purchase tax and/or CMHC rules.

• The buyer or the spouse of a buyer [including common law relationships of 1 year or longer] cannot have previously owned a residence in the last 5 years, including mobile homes.
• Maximum amount is $20,000 per applicant, and funds must be in the RRSP for 90 days before the money is withdrawn under the program.
• Re-payment is over 15 years, (annual repayment equals amount withdrawn divided by 15).
• No maximum purchase restrictions.
• Applicant must buy or build a qualified residence in the year the funds are withdrawals.
• Some RRSP’s cannot be withdrawn at all. [vested retirement allowances RRSP’s invested in working opportunity funds].
• Some funds RRSP are back end loaded, and redemption fees may apply.