Frequently Asked Questions from Buyers

What is the “First Time Home Buyer Incentive” program that the Federal Government is proposing?

As of September 2, 2019, this incentive will allow eligible first-time home buyers who have the minimum down payment for an insured mortgage with CMHC, Genworth or Canada Guaranty, to apply to finance a portion of their home purchase through a form of shared equity mortgage with the Government of Canada.

Incentive Program Facts:
The First Time Home Buyer Incentive will be 5% for the purchase of an existing home, while for the purchase of a newly constructed home, an incentive amount of 5% or 10% may be available. No on-going repayments are required, the incentive is not interest bearing, and the borrower can repay the incentive at any time without a pre-payment penalty. The government shares in the upside and downside of the change in the property value. The buyer must repay the incentive after 25 years, or if the property is sold.

The incentive will be available to first-time home buyers with qualified annual household incomes up to $150,000. At the same time, a participant’s insured mortgage and the incentive amount cannot be greater than four times the participant’s qualified annual household income. Per the table below, for a family buying a $500,000 home, this program could save them as much as $286 per month or more than $3,430 a year (note: for illustration purposes only, results subject to change depending upon amortization, interest rate, term, etc.).

Without FTHBI


Without FTHBI


Without FTHBI


House Price







Down Payment (5%)







FTHBI (10%)







Insured Mortgage







Insured Mortgage + Mortgage Insurance Premium







Monthly Payment*







Savings on Monthly Payment




Savings on Yearly Payment




What is the Bank of Canada Stress Test and how does it impact my buying power?

The new stress test was announced by the Office of the Superintendent of Financial Institutions on May 20, 2021. Starting June 1, 2021, the new calculation of the minimum qualifying rate for mortgages, including uninsured mortgages will be set at either the mortgage contract rate plus two per cent or 5.25 per cent — whichever one is greater.

What does the down payment on an Investment property have to be?

The biggest hurdle for most people when purchasing a real estate investment is the money it takes to buy rental property. It is very expensive to buy rental property since most banks require at least a 20% down payment. Many banks start requiring 25 percent down once you have four mortgages in your name.

What is a Recreational property?

A recreational property is a property that is not your primary residence that caters to a certain lifestyle whether it be a cottage on the water, a cabin in the woods, a cozy ski chalet or a downtown condominium with amenities. Some recreational properties can be difficult to finance to check with a mortgage broker prior to making an offer.

What does the down payment on a Recreational property have to be?

If you are buying a recreational property for your own personal use, you can put down as little as 5% for a down payment. If you are buying a recreational property for the purpose renting it out, you will need a minimum 20% down payment, as it would then be considered an Investment Property.

What are some of the closing fees I can expect to pay when buying a home?

Many home buyers have the cash in the bank for their down payment and associated fees. But, you should always be aware of the following fees outside of the down payment. These fees could include the conveyance fees (legal fees), property & fire insurance, adjusted taxes (on the property), and PTT (Property Transfer Tax) of title are in addition to the mortgage costs and paid out by your lawyer when the property transfer is complete.

What is the Property Transfer Tax or PTT?

When you purchase or gain an interest in property in B.C. that is registered at the Land Title Office, you’re responsible for paying property transfer tax. It is a payment made to the government for transferring property from the seller to the buyer and is a complex process that should be calculated by a professional. Since it is not imposed in every Province, you will want to take advantage of your REALTORS® expertise.

Taxable transactions include:

  • Transfer of fee simple
  • Right to purchase or agreement for sale
  • Lease or lease modification agreements
  • Life estate
  • Foreclosure
  • Crown Grant
  • Escheat, forfeiture or quit claim
  • Transfer because of corporate reorganization

You pay the tax based on the fair market value (usually the negotiated purchase price) of the property at the date of registration, unless you qualify for an exemption.

If you’re a foreign national, foreign corporation or taxable trustee, you also pay the additional property transfer tax of 20% (Foreign Buyers Tax) on residential property transfers within specified areas of B.C.

Property transfer tax should not be confused with your “annual property taxes”. Annual property taxes are paid yearly for each property you own or have a registered interest in to fund services in your area.

When do I have to pay the PTT?

You are obliged to pay the tax, when you:

  • acquire a registered interest in the property, or
  • gain an additional registered interest in the property, or
  • become the registered holder of a lease, life estate, or
  • right to purchase against the property is required to pay the tax unless they qualify for an exemption. This person is referred to as the transferee or purchaser..
I’m a first-time homebuyer. Do I have to pay the PTT?

No, if you are buying your first property. The property has to be your principal residence and you have to live there at least one year. Full exemption is possible only when fair value of your property does not exceed $500,000 and the land does not exceed 0.5 hectares (1.24 acres).

What are the current PTT calculations?

As part of the British Columbia government’s release of the 2018 budget, the Province of BC announced an increase in the Property Transfer Tax on residential properties from 3% to 5% on the portion of the fair market value greater than $3,000,000, effective February 21, 2018.

Once the fair market value of the property has been ascertained (usually the sales price), the next step is applying the rate(s) of tax to calculate the PTT payable. As of February 21, 2018, the applicable rates are as follows:

  • 1% on the first $200,000;
  • 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000;
  • 3% on the portion of the fair market value greater than $2,000,000; and
  • if the property is residential, a further 2% (5% in total) on the portion of the fair market value greater than $3,000,000 (effective February 21, 2018).

So, in this example, your total PTT would be as follows for a house purchase of $3,700,000:
1% on $200,000 = $2,000
2% on the next $1,800,000 = $36,000
3% on the next $1,000,000 = $30,000
5% on the remainder (700,000 x .05) = $35,000
Total PTT on your house purchase of $3,700,000 = $103,000