12 Dec

Property transfer tax exemptions


Posted by: Chase Cooper

If you are purchasing a home in BC it is important to understand property transfer tax, and more specifically if you qualify for an exemption.  Here is a breakdown of the qualifications.

First Time Home Buyer Qualifications:


You qualify as a first time home buyer if:

§ you are a Canadian citizen, or a permanent resident as determined by Immigration Canada,

§ you have lived in British Columbia for 12 consecutive months immediately before the date you register the property, or you have filed 2 income tax returns as a British Columbia resident during the 6 years before the date you register the property

§ you have never owned an interest in a principal residence anywhere in the world at any time, (clients could have owned a rental property, but proof would be required to show that they have never lived in the home at any time throughout the ownership)  

§ you have never received a first time home buyers’ exemption or refund.


Please note: You cannot re-qualify as a first time home buyer. This rule may be different for other federal programs for first time home buyers (e.g. the Canada Revenue Agency Home Buyers’ Plan).


Property Requirements

The property you purchase qualifies if:

§ the fair market value of the property is not more than the qualifying value of $475,000 (only if purchasing an existing home), There is a partial rebate between $475,000-500,000.  Anything over the client has to pay the tax

§ the land is 0.5 hectares (1.24 acres) or smaller, and property must be principal residence


*New built home exemption- You can also qualify for the exemption with a purchase of a newly built home with a fair market value of $750,000 or Less, partial exemption between $750-800K.  *You still get this exemption even if you haven’t lived in BC for 12 months.


It is very important to know that If a client hasn’t lived in BC before and they are looking to purchase a home EVEN if they are a first time buyer they will not qualify for the exemption if they have not lived in BC for 12 consecutive months.  I have had a client that fell into this category and we were able to ensure his completion date was pushed back to help him qualify (saving him over7400 dollars!!)

As always, ask questions and work with someone you trust!


4 Oct

New Mortgage changes…..how will this affect you?!


Posted by: Chase Cooper

Mortgage qualifying just got a little harder…what does this mean?

The Department of financing has surprised us with a few changes that will be effective coming up October 17th, 2016.  These changes were made to cool the markets in Vancouver and Toronto but will most likely have an effect more so on the regions outside of these markets.  These include:

  • Stress testing for ALL insured mortgages starting Oct 17th, this means that even the 5 year rate will be subject to a 4.64% “qualifying Rate” at the time of purchase.  This isn’t what the actual rate is but it does reduce the amount one can qualify for vs using current rates (around 2.39% today). 
  • Reporting of a principle home sale is mandatory requirement with CRA, you will then be granted an exemption for capital gains if you qualify, it not you will be required to pay capital gains even if it was your primary residence.  This will be determined through a series of questions your accountant will ask.

There are other changes as well (full details here http://www.cbc.ca/news/business/ottawa-housing-tax-real-estate-1.3788725 )

Most of my clients typically don’t see their absolute max approval when they purchase a home so even though the qualifying rate is higher and it can drop a potential approval down 100k, only a small portion of people will be affected directly by this.  I do see this being a bit more difficult on the sales side where sellers will be forced to reduce their prices in order to conform to the market so any gap will be closed partially due to this.

What should you do!?  

Talk to a Mortgage Specialist– This is something everyone should do the moment they are thinking they would like to purchase a home, even if it is a year or two away…why?  Because they can help you plot out and plan a course of action, this could be: Savings plan, debt reduction plan, credit rebuilding or strengthening plan, income planning (for business for self clients).  There are so many variable to consider so having someone look at your application and tell you what you need to do will save you a lot of time and potential down the road headaches or road bumps.

Changes will always happen and we will always have our reservations on them BUT in the long run we make the best of it and keep pushing forward!

29 Oct

Purchase plus Improvements


Posted by: Chase Cooper

Purchase Plus Improvements:

Get into your dream home today!  A lot of times we see that a client LOVES a home but there are just a couple of things they would change, this is very typical and a lot of times people may be walking away from THEIR DREAM HOME!

What if I were to tell you that you can ADD renovations to a home when you buy it!  The money for the Reno’s is put into the mortgage so that the cost of doing it isn’t a onetime upfront wallet drainer; but rather a slight increase on your mortgage payment per month and you get your dream home years sooner!

How this program works is you first need to find a home, once you do that you then decide what you would like to change.  This can be flooring, trim, cabinets, countertops, windows, roof etc.  You then need to find a contractor to come in and quote the materials cost and how much the labor will be.  As long as the quote doesn’t exceed 10% of your purchase price (350,000K mortgage you can go up to 35K renovations) OR a max of 40K you can then add this onto your mortgage.  So let’s say your original purchase price is 350,000 and your quote for renovations is 20,000.  Your new purchase price will then be 370,000.  The down payment will be based on this new amount; if we use 5% at 350K (17,500) and 5% at 370K (18,500) your difference in outgoing cash is only 1000 dollars!

How the program works is that once the quotes of been approved you will get a new commitment showing the new mortgage amount.  All the documents will be signed and when it is time to get your keys the lawyer will transfer everything in your name; they will then HOLD BACK the money for the renovations until they know the work is 100% complete, this is to ensure the work that was approved is what is going to be done (protects the lenders interest).  Most contracting companies will carry the cost of materials etc until the work is done.  Once it is done an inspection is ordered to confirm work is complete and then the lender is notified, when they confirm it is done they will instruct the lawyers to release the money to the client who then pays the contractor.

This is a very effective way to change a home to how YOU want it.

Call me for more questions regarding this amazing program

Chase Cooper

250-785-7171 or chasecooper@dominionlending.ca

12 Dec

Mortgage Qualifications for Jan 1, 2015


Posted by: Chase Cooper

Over the past several years, we have seen significant changes to the way that lenders qualify borrowers applying for mortgages – with each change making the mortgage qualification process progressively more challenging.

The latest proposed change for January 1st, 2015 would see existing unsecured debt payments (credit cards, lines of credit, etc) calculated using 3% repayment on the balance regardless of the contractual amount you’re required to pay each month. Those debts and their corresponding 3% payments ultimately determine your mortgage qualification amount. The more outstanding debt you have, the smaller mortgage amount for which you will qualify.

Currently, lenders accept the contractual payments for unsecured debt, even if the monthly payments are lower than 3% of the outstanding balances.


  • Outstanding debt includes a $20,000 line of credit.
  • At an interest rate of 6%, the bank currently only requires a minimum monthly ‘interest only’ payment of $100.
  • New rules would require the more conservative use of 3% of the debt balance during qualification.
  • This means that, after January 1st, the lender’s underwriting practices would require a payment of $600 per month (3% of the $20,000 outstanding debt) be used for qualification purposes instead of the current $100/month interest only payment.
  • This has a significant impact on qualifying ratios.
  • For instance, if someone makes $70,000 a year and wants to buy a home, and they have one debt – the $20,000 line of credit – they would currently qualify for a mortgage of about $425,000. As of January 1st, their qualification amount would drop to about $350,000 – a significant erosion of $75,000 in the buyer’s home purchasing capacity.

If you have balances on a line of credit, car loan/lease, credit card, student loan, etc, the mortgage qualification amount will dip even more as of January 1st!

Given that interest rates continue to hover near historic lows, the full impact of these new qualification rules could be even more pronounced and magnified once rates start to climb. If you’re considering a new mortgage in the next 4-6 months, please contact me so we can discuss your specific situation and plan accordingly in advance.

15 Mar

How can you save for a Down payment being a first time home buyer?


Posted by: Chase Cooper

First time Home Buyer saving for your down payment:


This can seem like a daunting task with the markets these days, but it may be somewhat easier than you think.  I am speaking strictly in a YOUR ARE SAVING FOR A DOWN PAYMENT FOR A HOME, nothing more or less; this isn’t retirement advice so please remember that.  This is also applicable if you haven’t owned a home in the previous 4 years.

Ok so how do you save? I have always found it best; and this has been from experience, is that it is much easier to save first and spend later.  Most employees don’t have write offs as someone who is business for self would, so how do they save on their taxes?  The answer is through your RRSP’s.  Making contributions to your RRSP’s throughout the year (if you start after the deadline of March 1) can potentially net you a much larger tax return than normal; this happens because you are investing in an RRSP umbrella with money you have already paid taxes on. When it comes time to file your taxes and you use your RRSP’s your taxable income goes down dollar for dollar based on what you have contributed; for example:  If you are in a 30% tax bracket a $10,000 rrsp contribution will net you $3,000 back, so you can turn $10,000 into $13,000).  So now you have money in your RRSP’s and also have a larger return coming back to you!  But there is also something that may ensure you get that savings vehicle really running and I will elaborate on that more; but first lets ask ourselves this question.

“How can I buy a home for, lets say, $300,000 as soon as possible?”  This question has a few answers to it but what we are focusing on right now is down payment. The minimum down payment for a $300K mortgage is $15,000 (plus closing costs). So you will need to have $15K for a down payment. Now it is time to look at how to get that as soon as possible….


An RRSP loan! I know that “LOAN” sounds scary but just look at the example below:

Say that you have worked out that you are going to be getting about $5,000 back on your tax return.  If you talked to your financial advisor (I highly recommend everyone has one) they will be able to let you know what the optimum RRSP loan would be for you to maximize your return.  Once you get your tax refund back you use that money to pay off the RRSP loan.  Now you may be thinking that you no longer have the tax return but that simply isn’t the case. You have now gone from only getting $5,000 back on your tax return to now having a larger amount in your RRSP (money from the RRSP loan you have taken out).  Being a First Time Home Buyer allows you to roll out up to $25,000 of your RRSP without being taxed when you are purchasing a home (this is referenced as the Home buyers Plan).  So if you took out a $15,000 dollar RRSP loan you will be able to access that for your down payment.  Here is a link how to qualify http://bit.ly/1D83Uuo


*There is a bit more to consider when doing this so it is important to do your research and talk to a Financial Advisor.  I can definitely help you with that and can answer any underlying questions you may have regarding the Home Buyers Plan.



24 Jan

Have you checked you credit lately?


Posted by: Chase Cooper

If I was to ask the questions “when is that last time you pulled your own credit”? What would you say? Unfortunately most people do not understand the importance of doing this on a regular basis nor sometimes do they even know how they would go about doing this.  When I ask this question I am not asking you to go to a bank or financial institution to get them to pull it, this would be considered a hard hit and would show up as record for an inquiry on your credit which could have a negative effect.  What I am talking about is YOU actually pulling your own credit, yes you! Doing it this way serves a couple of purposes.

  1. You will be able to monitor your credit to ensure that you have the correct items reporting on your credit bureau.  Surprisingly enough the credit reporting agencies aren’t perfect, nor are the financial institutions that report to them.
  2. You will be able to keep on top of any potential collections or mistakes that may have been made. I have seen many times that there was something negative reporting on someone’s credit that they never even knew existed, and as it turns out it was a mistake.  Once removed their credit was back in good standing.
  3. You will be able to ensure that you keep and maintain a good credit score year round. One mistake reporting on your credit could have enough of an effect on your credit to cause issues if you were going to purchase a home.

It is not uncommon for collections to be reporting as owing when they have already been paid, or to have credit cards showing open with a balance when they have; in fact, been closed and paid.  Regular maintenance of your credit takes discipline and consistency, but it will be well worth it.

The Two major credit reporting companies in Canada are Equifax and TransUnion; both of these companies have websites that you can go you and an easy to follow process to pull your own credit score. These companies take into account different variables to come up with a beacon score for each person, beacon scores typically read between 300 and 900, I have personally never seen a beacon score in the 300’s and have never seen one over 860.  Prime lenders typically want to see a minimum beacon score of 620 but I would recommend at a minimum to keep your score over 680.  In order to do that you will need to ensure you do a few things such as:

  • Keep your balances below 75% of your limit, once you start going over this threshold your score will start to drop as it looks as though you are being irresponsible with your credit. My recommendation is try to not have a balance or to have a low balance, if this is not an option try to keep it around 50%.
  • Don’t credit search.  What I mean by this is if you are denied a loan or credit and you continually “Jump” from bank to bank, every one of those inquiries is reported and will have a negative effect on your credit. The more inquiries you have the worse your score will be.
  • Don’t be late on payments. Having clean credit is one of the most important things as this shows your responsibility with credit and your capacity to repay debt.  If a lender sees you can’t make a loan payment or credit card payment on time, they won’t have confidence you will be able to repay your mortgage on time.
  • Keep your cards open, yes I said keep them open.  A big mistake I see a lot of people make is that they say they closed all of their accounts to improve your credit, I can see why this may seem like the best idea but it actually has a reverse effect.  Not having any credit reporting could lead to a client eventually having a reject beacon score becuase of the lack of current credit history, if left long enough could keep you from getting into a home.  Keep your credit open so it continues to report and try to have a limit of at least $2500 as most lenders will not look seriously at credit if the limit is only $300 to $1000.

Remember that good credit is based on the type of credit you have, duration of credit open, balances to limit ratios and good repayment.  I would recommend that everyone have minimum two types of credit to help strengthen it, but remember that this is NOT your money so be responsible with it and don’t use it if you don’t have the money to pay it off in your account. I also don’t mean for you to go and get 10 different credit cards, two would be just fine but it shows variety with your credit.

Lenders typically like to see two active trades (credit card, loan, Line of credit) for two years reporting cleanly on your credit.  This shows them a good history of debt management and repayment responsibility and will most likely give you the best chances of getting into a home.


To check your own credit you can go to www.equifax.ca  or www.transunion.ca


If you have more questions or would like to learn more please contact me at 250-785-7171