B.C. First-Time New Home Buyers' Bonus

The B.C. First-Time New Home Buyers’ Bonus is a one-time payment worth up to $10,000.
 
B.C. residents who are first-time home buyers and who purchase an eligible new home on or after February 21, 2012 and before April 1, 2013 may be eligible for this bonus. 
 

A first-time home buyer is an individual who has never previously owned a primary residence anywhere in the world.

 

A primary residence is generally a house that you own, jointly or otherwise, and that you intend to live in on a permanent basis. You may have more than one place of residence, but you are considered to have only one primary residence.

Qualifications

You may qualify for the bonus if you meet all of the following criteria:
  • You purchase or build an eligible new home in B.C.
  • You and your spouse or common-law law partner are first-time home buyers
  • In the case of multiple buyers of a home, each buyer is a
    first-time home buyer
  • You file a 2011 B.C. resident personal income tax return or, if you move to B.C. after December 31, 2011, you file a 2012 B.C. resident personal tax return (you are not eligible for the bonus if you move to B.C. after December 31, 2012)
  • You are eligible for the B.C. HST New Housing Rebate
  • You intend to live in the home as your primary residence
  • No one else has claimed a bonus for the home

Eligible New Homes

Eligible new homes include:

  • new homes (i.e. newly constructed and substantially renovated homes) that are purchased from a builder
  • owner-built homes

A substantially renovated home is one where all, or substantially all, of the interior of the building has been removed or replaced. Generally, 90% or more of the interior must be renovated to qualify.

Eligible homes include detached houses, semi-detached houses, duplexes and townhouses, residential condominium units, mobile homes and floating homes, and residential units in a cooperative housing corporation.

Newly constructed and substantially renovated homes

The bonus is available for newly constructed and substantially renovated homes in B.C. purchased from a builder, where:

  • a written agreement of purchase and sale is entered into on or after February 21, 2012 and before April 1, 2013, 
  • HST is payable on the purchase, and
  • ownership or possession of the home is transferred before
    April 1, 2013.

Owner-built homes

The bonus is available for new owner-built homes, where:

  • a written agreement of purchase and sale for the land is entered into on or after February 21, 2012, and
  • construction of the home is substantially complete, or the home is occupied, before April 1, 2013.

Bonus Calculation

The bonus is equal to 5% of the purchase price of the home or, in the case of owner-built homes, 5% of the land and construction costs subject to HST.  The maximum bonus is $10,000.

The bonus is reduced based on an individual’s/couple’s net income (line 236 of your income tax return) using the following formula.

  • For single individuals, the bonus is reduced by 20¢ for every dollar in net income over $150,000.  The bonus is reduced to zero at $200,000 income.
  • For couples, the bonus is reduced by 10¢ for every dollar in family net income over $150,000.  The bonus is reduced to zero at $250,000 family net income.

Claiming the Bonus

If you claimed the B.C. HST New Housing Rebate, you can apply for the bonus by completing the Application for the B.C. First-Time New Home Buyers’ Bonus (FIN 520) (PDF).  

If you are married or have a common-law spouse, your spouse must complete the Schedule A – Certificate B.C. First-Time New Home Buyers’ Bonus (FIN 520A) (PDF). In the case of multiple buyers of a new home, the other co-owners must also complete the Schedule A.

Please note: The person who claimed the B.C. HST New Housing Rebate is the person who must complete the Application for the B.C. First-Time New Home Buyers’ Bonus.

Penalty for False Declaration - make sure that you understand the consequences of making a false declaration. If you knowingly make or participate in making a false statement that results in an excess bonus amount, you may be charged an amount equal to double the amount of the bonus (the bonus plus a penalty equal to the bonus amount).

You must file your application for the bonus on or before March 31, 2015.

You will need to provide the following documentation with your application.

  • A copy of your Notice of Assessment of Income Tax for the eligible tax year.
  • A copy of your spouse or common-law partner’s Notice of Assessment for that year.
  • A complete copy of:A copy of the final, signed purchase and sale agreement for your eligible new home, and/or the land, mobile home or floating home.
    • your GST/HST New Housing Rebate Application for Houses Purchased from a Builder (Form GST 190), including the GST 190 British Columbia Rebate Schedule (Form RC7190-BC) or
    • your GST/HST New Housing Rebate Application for Owner-Built Houses (Form GST 191) including the GST 191 British Columbia Rebate Schedule (Form RC7191-BC).
  • A completed and signed Schedule A – Certification of B.C. First-Time New Home Buyers’ Bonus (FIN 520A) for each co-owner and/or your spouse or common-law partner. A completed schedule must be included for your spouse or common-law partner even if he or she is not an owner of the home.

For owner-built homes, you must keep receipts for all construction costs.

The bonus will be issued after all supporting information is received and your claim has been reviewed. If your claim is adjusted or denied, an explanation will be provided in writing (Notice of Determination). 

Appeals

You have the right to appeal:

  • Denied or reduced bonuses
  • Penalties

To appeal, send written notice to the Minister of Finance within 90 days of the date on the Notice of Determination. If sent by mail, the appeal is considered to have been received by the ministry on the day it was mailed. A separate appeal must be filed for each Notice of Determination you are disputing.

The appeal must be in writing and sent or faxed to:

Minister of Finance
Tax Appeals and Litigation Branch
PO Box 9629 Stn Prov Govt
Victoria BC  V8W 9N6
Fax Number:  250-387-5883

Be sure to clearly state the following:

  • Your name, address and telephone number
  • The decision in dispute
  • The reasons for the appeal
  • The facts on which the appeal is based

If someone is representing you, or you are representing the taxpayer, a signed Authorization (FIN 87) (PDF) allowing us to discuss the matter with the representative must be provided.

Once an appeal is received, the Minister will consider the matter and notify you in writing of the decision.

Please note:  If you’ve been charged a penalty or required to repay all or part of the bonus, you have to pay these amounts even while they’re under appeal. You should direct any questions about payment of these amounts to the number listed on your Notice of Determination.

Legislation

The following legislation applies to the First Time Home Buyers’ Bonus:

Source: http://www2.gov.bc.ca/gov/topic.page?id=0778BC0286DC4B1DAFEF090568064BB0&title=B.C.+First-Time+New+Home+Buyers%27+Bonus

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The Real Estate Board of Greater Vancouver Year End Housing Market Update for December 2012 with REBGV president Eugen Klein.

For more news and statistics visit us at http://www.rebgv.org.

 

Source : The Real Estate Board of Greater Vancouver

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Depreciation Reports, Contingency Reserve Funds and Special Levies

 

 

Depreciation Reports

 

Strata corporations are required to obtain depreciation reports by December 14, 2013 (two years from the effective date of the new requirement) or hold a ¾ vote to waive the requirement.

A depreciation report helps strata corporations plan for the repair, maintenance and replacement of common property, limited common property and common assets. The report must contain:

A physical inventory of the common property including building systems.

Anticipated maintenance, repair and replacement costs for common expenses projected over 30 years.

A financial forecasting section that contains at least three cash flow funding models for the contingency reserve fund (CRF).

 

Depreciation reports provide useful information to strata lot owners and can help prospective purchasers, mortgage providers and insurance companies. Depreciation reports are also known as reserve fund studies in other jurisdictions.

 

Strata corporations that do not need depreciation reports:

a) Strata corporations with four or fewer units

b) Strata corporations that exempt themselves by passing an annual ¾ vote.

 

Updates

Depreciation reports must be renewed every three years. If a strata corporation has already obtained a depreciation report, which meets the new requirements, it will have three years to obtain another report.

 

How much do depreciation reports cost to prepare?

The cost would vary depending on the size of the strata corporation, the complexity of the development and who is hired to do the report – there are too many variables to estimate the costs with any certainty. The initial depreciation report usually costs more than subsequent updates. The cost, relative to the assets, is low and provides real value for owners and purchasers.

 

What must be included in a depreciation report?

A physical component inventory and evaluation of applicable components as outlined in the Strata Property Regulation 6.2. Examples of the components that are to be reviewed for the depreciation report. (This is not a complete list and not all strata corporations will have all the components listed):

the building structure;

the building exterior including roofs, decks, doors and windows;

building systems such as electrical, plumbing, heating, fire, protection and security;

common amenities and facilities. (For example, a pool, exercise room, guest house);

parking facilities and roadways;

utilities, including water and sewage;

landscaping, including paths, sidewalks, fencing and irrigation;

interior finishes including floor covering and furnishings;

green building components; and

balconies and patios.

A financial forecasting section that includes:

a projection of the anticipated maintenance, repair and replacement costs for the next 30 years and the factors and assumptions used, including interest rates and inflation rates;

at least 3 cash-flow funding models over 30 years;

the current balance of the contingency reserve fund (CRF) and how it is funded.

A summary of the repair and maintenance work to be done (other than on an annual basis) over the next 30 years;

The date of the report, the qualifications of the author(s) of the report, their relationship, if any, to the strata corporation and information on any errors and omissions insurance.

Any other appropriate information or analysis.

The report must also identify those parts of the common property and limited common property, if any, that individual owners are responsible to repair and maintain.

 

The person, or team, preparing the depreciation report must conduct an on-site visual inspection of the strata corporation’s building(s) and components; review both the common and limited common property; as well as any part of the strata lots that the strata corporation, by bylaw, is responsible to repair and maintain.

 

How to prepare for a depreciation report

Strata corporations may want to consider the following steps:

Prepare Basic Information: Initially you will need to provide information on total units, year built, floors, and general building systems information – such as elevators, etc.

Do some research: Talk to other strata corporations similar to yours, review best practices and materials from strata owner associations and websites. (See Resources Section at the end of this guide). Write down all the questions you want to ask prospective firms or individuals. You can also check if the depreciation report will be available electronically and thus easier to update.

Gather relevant documents: You will need to provide documents that include those related to repair, maintenance, inspection, agreements with owners about repairs to strata lots, common property or limited common property, as well as financial records and the strata’s bylaws.

 

Who is qualified to prepare the depreciation report?

The Strata Property Regulation does not specify who must prepare a depreciation report. The knowledge and expertise required to prepare a depreciation report for a six-plex may be considerably different than the qualifications and expertise required to prepare a depreciation report for a highrise residential tower with its own power generating plant, airspace parcel and underground parkade.

The person (or team) preparing the depreciation report must have the expertise to:

understand the scope and complexity of the common property, limited common property, and common assets including individual components and their condition and life expectancy;

provide the financial forecasting required; and

understand the strata corporation’s bylaws and any agreements entered into with owners respecting common property and strata lots.

 

It is possible that for some strata corporations, the expertise and knowledge may exist among the strata lot owners to prepare the depreciation report or assist the qualified person or team in preparing the report. The strata lot owners and strata council should carefully consider the responsibilities and risks involved in having a strata lot owner(s) prepare a depreciation report.

To find the right person or team to prepare your report, start by consulting with your Strata Property Manager, if your building has one. You can also ask for recommendations from other Strata Corporations similar to yours and look online at best practice guides offered by strata organizations. Make a list of qualified individuals firms and invite bids or proposals. Don’t forget to check for references.

 

Recordkeeping

Depreciation Reports and Form B (the Information Certificate):

The most recent depreciation report, if any, must be attached to the Form B.

Retaining Depreciation Reports and other related materials

Under section 35 of the Strata Property Act the strata corporation must retain:

any depreciation reports obtained by the strata corporation under section;

any reports obtained by the strata corporation respecting repair or maintenance of major items in the strata corporation, including, without limitation, engineers’ reports, risk management reports, sanitation reports and reports respecting any items for which information is, under section 94, required to be contained in a depreciation report;

the records and documents referred to in section 20 or 23 obtained by the strata corporation. These are documents provided to the strata corporation by the owner developer.

 


 

Contingency Reserve Fund

Strata corporations must have a contingency reserve fund (“CRF”) to pay for common expenses that:

usually occur less often than once a year; or

do not usually occur.

 

 

Minimum Contributions

The CRF must have a minimum balance of 25% of the operating fund for the fiscal year. If the amount in the CRF is less, the strata corporation must contribute at least 10% of the total contribution to the operating fund for the current year until the 25% minimum is reached.

Please NOTE: This statutory minimum level for the CRF has no relationship to repair and maintenance costs over the longer term. These costs are reflected in a depreciation report; not the operating budget.

Strata owners may now make contributions to the CRF (above the minimum) by simple majority vote as part of the budget approval process and with consideration to the depreciation report. (Previously a ¾ vote was required to make contributions to the CRF if the balance in the CRF was above 100% of the operating budget).

 

Expenditures from the CRF

Expenditures from the CRF must be:

approved by a ¾ vote at an annual or special general meeting; and

consistent with the purpose of the CRF.

 

An unapproved expenditure from the CRF will only be permitted:

if the expenditure is necessary to ensure safety or prevent significant loss or damage; and

if the expenditure does not exceed what is required to ensure safety or prevent loss or damage; or

if the expenditure is for the purpose of paying an insurance deductible required to repair or replace damaged property.

 

If an unapproved expenditure occurs a strata council must inform owners as soon as possible about the expenditure unless the expenditure was to pay for an insurance deductible.

 

Investing and Managing the CRF

The CRF can be invested or held:

in insured accounts with savings institutions in British Columbia

in those investments permitted by Strata Property Regulation 6.11.

 

When the sale of a strata lot occurs, the seller is not entitled to a return of contributions to the CRF.

 


 

Special Levy


A special levy is money collected from strata lots for a specific purpose. It is in addition to the strata fee.

Strata lot owners may be required to pay special levies when:

the expenditure has not been included in the annual budget because it was either not anticipated or because of the infrequency of the expense;

there are insufficient funds in the CRF; or

a decision is made not to use monies from the CRF.

 

Approving and Contributing to a Special Levy

A resolution for a special levy must be developed and submitted for approval at a general meeting. A resolution approving a special levy must state:

the purpose of the levy;

the total amount of the levy;

the method for determining each strata lot’s

share of the levy;

the amount each strata lot must pay; and

the date(s) by which the levy must be paid.

 

A ¾ vote is necessary to approve a special levy if contributions to the levy are apportioned in the same way as strata fees are apportioned, which is usually by unit entitlement. However, a unanimous vote is required if contributions to the levy are apportioned by a fair division of the particular expense rather than in the same way that strata fees are apportioned.

When a strata lot is sold: if a special levy is approved before the strata lot is conveyed to the purchaser:

the seller will owe the strata corporation the portion of the levy that is payable before the date the strata lot is conveyed to the purchaser; and

the purchaser will owe the strata corporation the portion of the levy that is payable on or after the date the strata lot is conveyed.

 

Expenditures and Uses of a Special Levy

Monies collected for a special levy must only be spent for the purpose of the special levy. The strata council must also inform owners on how monies raised from a special levy have been spent.

The special levy can be used to secure a strata corporation loan by approval of a ¾ vote.

 

Excess Funds

The strata corporation must return excess funds from a special levy to each owner of the strata lot proportional to the contribution made to the special levy in respect of that strata lot, if there is at least one owner entitled to more than $100. If no owner is entitled to more than $100, the strata corporation may deposit the excess funds in the CRF.

 

Investing and Managing the Special Levy

Similar to the CRF, the special levy can be invested or held:

in insured accounts with savings institutions in British Columbia

in those investments permitted by Strata Property Regulation 6.11

 

The special levy must be accounted for separately from other monies held by the strata corporation or separate section and include any interest or income earned on the special levy.

 

Charging Interest on Late Payment of a Special Levy

A strata corporation may, by bylaw or by a resolution approving a special levy establish a rate of interest not to exceed the rate set out in the regulations, to be paid if the owner is late in paying his or her strata lot’s share of the special levy.

The interest payable is not a fine and forms part of the special levy.

 

 Source: http://www.housing.gov.bc.ca/pub/stratapdf/Guide12_Depreciation%20Reports.pdf

 

 

 

 

Disclaimer: the Strata Property Act is periodically updated. This guide is provided for the reader’s convenience; they are not a substitute for professional advice including legal advice. Please note: the Standard Bylaws can be amended.

 

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Fraser Valley real estate sales at lower levels in 2012

According to the Fraser Valley Real Estate Board:
 

Fraser Valley’s real estate market in 2012 will be remembered as the year buyers and sellers took a breather reflecting quieter sales, an average number of new listings and prices overall remaining flat. 

The president of Fraser Valley’s Real Estate Board, Scott Olson, says, “The last half of 2012 was like a Mexican stand-off. Buyers kept hoping for greater price drops while sellers who didn’t have to sell just took their home off the market rather than lower their price. 

“With the economy so stable, we’re not in a situation where people have to sell their home, so they’re not.  It’s a very different market than in 2008 when listings were at an all-time high and sales were at historical lows.”

The Board’s Multiple Listing Service® processed 13,878 sales in 2012 compared to 15,529 the previous year, a decrease of 11 per cent, while the number of new listings remained about the same – 31,009 in 2012 compared to 31,592 in 2011. Over the year, the number of active listings for buyers to choose from dropped by 3 per cent going from 7,399 properties in December 2011 to 7,187 in December 2012.

Although 2012 ranks the second slowest year for sales in Fraser Valley since 2003, the volume of new listings finished in the middle of the pack.  Scott Olson, says, “Inventory levels are down, which is a sign of a healthy market where insufficient demand leads to reduced supply. This is also keeping prices in most areas either flat or down only slightly.”

In December, the benchmark price of a detached home in the Fraser Valley was $539,000, an increase of 1.2 per cent compared to $532,700 in December 2011 and a decrease of 1.0 per cent compared to November.

For townhouses, the benchmark price in December was $296,400, a decrease of 2.2 per cent compared to the same month last year when it was $303,000 and down 0.8 per cent compared to November. The benchmark price of apartments in December was $200,100, an increase of 1.6 per cent compared to December 2011 when it was $196,900 and a decrease of 1.3 per cent compared to November.

Average prices year over year show detached homes down 3 per cent – $576,709 in 2012 compared to $594,402 in 2011. The average price of townhomes increased by 3.7 per cent, going from $316,259 in 2011 to $327,935 in 2012 and the average price of apartments decreased by 0.2 per cent going from $218,235 in 2011 to $217,843 in 2012.

 

See the full statistics package for December here.

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