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Whistler Real Estate
and Whistler Listings for Sale with Ursula Morel
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| About > Buying Info | |
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About 
Buying Info.
Selling Info.
Staging Your Property
Affilliates and Services
Client Testimonials
Ursula's Referral Program
Press Releases
The Power of RE/MAX Contact Ursula ursula@ursulamorel.com Office - 604 932 4117 Direct - 604 935 3635 Cell - 604 932 8629 Fax - 604 932 4120 Toll Free 1-888 689 0070  Sea to Sky Premier Properties 4333 Skier’s Approach Whistler, BC, V0N1B4 Canada
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Buying Information Buying Information Whistler 2006 Greetings! When you’ve made the decision to move up, you want a discreet real estate professional who not only has mastered the buying and selling process, but also knows the luxury market and has strong negotiation skills and this in three languages: English, French and German. Please note the Press Release from The Wall Street Journal, Barron’s and The Institute of Luxury Home Marketing will help confirm my competencies. It would be my pleasure to work with you to find just the right property. Let me know where to start. Ursula Morel Your Luxury Expert in resort Properties Locally, Nationally & Internationally PROPERTY TRANSFER TAX (PTT) A Provincial Government Tax which applies on all transfers of Real Estate and is payable on the completion date. The rate of tax is one percent (1%) on the first $200,000.00 of the purchase price and two percent (2%) on the balance of the purchase price over $200,000.00. LEGAL FEES AND DISBURSEMENTS These are the closing costs paid to a lawyer or notary to complete the transaction on your behalf. Fees are paid for completing the conveyance and preparing and registering the mortgage. Disbursements are the costs for out-of-pocket expenses such as government registration charges, property and tax information searches, courier costs, long-distance calls plus PST and GST. The exact amount of these charges will vary depending on the transaction but they generally range from approximately $600.00 to $1,000.00. Most lawyers and notaries will provide quotes as to charges, it is important to ask whether the quote includes all expenses to complete the transaction. GOODS AND SERVICES TAX (GST) GST is a seven percent (7%) tax which applies on the purchase of new construction and on the resale of accommodations which have been rented out for short-term/nightly rentals. The payment of GST can be deferred if the new intends to offer the property available for short-term/nightly rental for ninety percent (90%) of the time and becomes a GST registrant. Becoming a GST registrant is a relatively straightforward procedure of completing approximately four forms. Once you are a GST registrant, you are entitled to claim credits for the GST that you pay, for example, on legal fees, property management fees, hydro, cable, telephone. You are then required to charge, collect and remit GST on the nightly rentals, which in some instances may be done through your property manager. You will be required to annually file a GST Return. WHISTLER RESORT ASSOCIATION FEES These are quarterly fees payable to the Whistler Resort Association and are calculated based on the number of bed units (one bedroom equals two bed units) present in the accommodations, and is dependent on the use of the property. Should you be using the property for only personal use and not have it available for rental more than 14 days per year, you may file a Declaration with the Whistler Resort Association to pay a lower rate of fees. The lower rate of fees is not available to fractional interest (quarter interest) or properties that are subject to a phase one covenant in the town center. For more detailed information about bed units contact Whistler Resort Association at (604) 932-3928. INSURANCE Purchasers will be required to arrange insurance on single-family residential accommodations. With respect to strata-titled properties, Purchasers should maintain liability and contents insurance. CONDOMINIUMS Purchasers will be responsible for paying monthly maintenance charges. The Strata Corporation is also entitled to levy special assessments for extraordinary expenses, should there not be sufficient money in the contingency reserve fund. Purchasers should determine what rights they have to use the common areas such as parking stalls and lockers, if applicable. PHASE ONE AND PHASE TWO COVENANTS Properties covered by the phase one covenant require that when the property is not being utilized for personal use it be available for a rental through a bonafide property management. Phase two covenant restrict the owners personal use of the property to 28 days in the summer 28 days in the winter and requires that the property is available for rentals through a property manager for the remaining days of the year. SHOULD I BUY IN MY NAME OR IN THE NAME OF A COMPANY? The answer to this question is usually tax driven and therefore you should obtain some accounting advice. There can be some draw backs to purchasing in the name of a company including the following: A. Corporations may pay tax on income received from the property at significantly higher rates than individuals (depending on the individuals marginal tax rates); B. Corporations can pay higher capital gains tax as well; C. Should you incorporate a company specifically for the purposes of acquiring a property you will have additional legal cost of incorporating the company for approximately a $1,000.00 plus additional costs associated in maintaining the company annually such as filing annual reports, registered and records office charges and accounting charges; D. If the company is from a jurisdiction outside of British Columbia, your mortgage lender may require that the company be registered within British Columbia prior to agreeing to lend money (the cost associated with doing so would be roughly as outlined in the proceeding paragraph); E. In the event that the company was not required to register within British Columbia prior to completing the transaction, a Certificate of Good Standing would be required from the incorporating jurisdiction and an Opinion Letter from a solicitor from the incorporating jurisdiction would be required in conjunction with any mortgage financing; F. Prior to any sale of the property a further certificate of Good Standing would be required from the incorporating jurisdiction and it will be necessary to maintain the company in the incorporating jurisdiction as long as the property is owned; G. Personal guarantees of the principals of the company will usually be required by the mortgage lender even though the property is owned by a limited company. The advantages of having the property held by an incorporated entity would include the following: A. In the event of the death of the principals of the company there would be no change of ownership of the property in the British Columbia Land Title system, and if the shares are held outside of British Columbia there would not be any probate fees payable in conjunction with the shares; B. If the only asset that the company owns is the property, it may be possible to sell to a Purchaser the shares in the Company thereby avoiding the payment of Property Transfer Tax and GST on a sale of the property (Purchasers may be reluctant to purchase shares as they would inherit any liabilities in the company including any monies owing to Revenue Canada). OF PARTICULAR NOTE FOR NONRESIDENTS OF CANADA Withholding Tax on Rental Income Revenue Canada Taxation requires nonresidents to pay twenty-five percent (25%) of the gross rental income from the property to Revenue Canada. You may obtain exemption from such withholding tax if you complete a government form called an NR6 setting out that the projected income is less than the anticipated expenses associated with the property. Most property managers will assist in the completion of the NR6 return. Upon having filed an NR6 return, you are obligated to file an annual tax return with respect to the property with Revenue Canada. Revenue Canada will only allow expenses to be claimed if the returns are filed and will disallow any expenses incurred more than two years prior to the time of filing the return, it is therefore important that the returns are kept current to avoid expenses being disallowed and tax being paid on the gross rental income. For more information visit www.lamlonishio.ca MORTGAGES Mortgages in British Columbia differ from those available in the United States in several significant ways, including the following: (A) The Mortgage is for a fixed term, typically between six months and five years. At the end of the fixed term, the interest rate is renegotiated. (B) During the fixed term, there are limited rights to repayment, typically ranging from 10 to 20 percent. (C) In the event that you wish to prepay more than the permitted amount, and in the event of a sale of the property, penalties would apply and typically are the greater of three (3) months' interest or the interest rate differential. EXECUTION OF MORTGAGE DOCUMENTS Once the borrower has signed a commitment letter with the lender, the lender will instruct a lawyer or notary to draw the mortgage security. These documents must then be couriered to the borrower for their execution in the presence of a notary public. The Land Title Office does not accept faxed documents; therefore sufficient time must be allowed for the documents to be couriered, executed originally, couriered back and filed in the Land Title Office prior to the completion date. METHODS OF PAYMENT The balance of the purchase price must be paid by certified cheque or bank draft in Canadian funds. Exchange rates may fluctuate and lending institutions in Canada and the United States may give different rates of exchange or quote different rates of exchange for both buying and selling Canadian dollars and will offer different rates of exchange depending on the dollar amounts involved. This is an issue that should be addressed in advance of the actual completion date. It is possible to wire funds directly to the solicitor's trust account; however, because of the routing of funds, it can sometimes take several working days before funds wired will actually appear in the solicitor's trust account for the closing. It is recommended that the Buyer open a bank account with a bank in Whistler to facilitate the payment in Canadian funds of ongoing expenses and the receipt of revenues from the property. Our firm has Swift numbers which can be of assistance ensuring a speedy transmittal of funds. CURRENCY RISK What is Currency Risk? If you are buying a property overseas you will need to exchange your money into the appropriate foreign currency. HIFX is a specialty brokerage service offering Private Clients corporate rates of exchange as well as a service designed to take away the stress, hassle and risk involved with these types of currency issues. Example: A Canadian property priced at CAD$500,000 would have cost USD$397,455 in early January 2005. By the start of March that same property would have increased in cost to USD$417,362 due to the change in the exchange rate. That difference works out to USD$19,905 or a 9.5% increase in just two months. This is a classic example of avoidable currency risk. If the Canadian Dollars had been purchased or reserved in January through booking a forward contract, the cost would have been fixed and thus the currency risk eliminated. The HIFX service is free for our clients and carries no obligation to trade. Click here for more information Or for up to date rates and information click here TIME IS OF THE ESSENCE Completing transactions on the designated completion date in British Columbia is critical. The Vendor has the option of canceling the contract of Purchase and Sale should the funds not be paid on the stipulated completion date and is entitled to retain the deposit. It is not uncommon for Vendors who wish to continue with the transaction to demand interest or additional charges for extensions for late completion. CUSTOM HOUSE At Custom House, our foreign exchange services are comprehensive, versatile and customer-focused. With our broad range of products and competitive exchange rates, it’s no wonder we’re the largest non-bank foreign exchange company in North America and one of the largest in the world.Go to http://privateclient.customhouse.com/ca/206/ |
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