Condos

UNDERSTAND WHAT IS BEING SOLD BEFORE YOU CONSIDER BUYING

Developers in British Columbia commonly “pre-sell” residential units such as strata-titled apartments and townhouses (often referred to as condominiums or condos) prior to constructing the units. Typically, developers enter into contracts that provide for units to be built within two years at a fixed price (although construction completion can take longer) and require deposits to be paid by the prospective purchasers. The deposits are held in trust by a lawyer, notary public or real estate brokerage, unless deposit protection insurance is obtained, in which case the deposits may be released to the developer. Purchasing a pre-sale is not the purchase of an existing physical property, but rather a contract for the right to receive, and an obligation to pay for, a finished unit at a point in the future. Consumers should be aware of this difference in order to make an informed decision about purchasing a unit in a new development. Most people enter into a pre-sale contract with a developer directly while some may do so through an “assignment”.

WHAT IS AN ‘ASSIGNMENT OF A PRE-SALE CONTRACT’?

A contract assignment occurs when a buyer transfers the contract to buy property to someone else before the completion date. The original purchaser can transfer the contract for any price, even for a higher price than they paid for the property. Some purchasers assign or “flip” the units to other buyers before construction has even started.

Assignments can be complex and are only permitted prior to the completion of the original sale. An assignment is when the original buyer (the assignor) transfers their contractual rights to purchase a property to another buyer (the assignee) before the home is completed and ownership officially transfers. Whether an assignment is suitable depends on your intended use — for example, investment or personal occupancy — and it’s important to understand any restrictions or developer policies in place before proceeding.

Assignments are typically used in two main situations: one is to make a profit in a rising market by selling the contract to someone else — though keep in mind, any profit may need to be shared with the original seller, depending on the contract terms. The other scenario is when the original buyer can't come up with the remaining funds needed to complete the sale due to rising interest rates or inflation to construction costs — so the assignment becomes a way out. But this second situation can be risky. If you're unable to assign the contract in time, you could still be on the hook legally and financially. So, it's important to understand the risks before going down that path.

CURIOUS ABOUT BUYING A PRE-SALE PROPERTY?

Here is a helpful PDF guide from BC Financial Services Authority (BCFSA) that explains everything you need to know before making a move on a pre-construction home.

This resource covers:

• What a pre-sale actually is

• Risks, timelines, and the 7-day rescission period

• What to expect in your contract

• And more essential details for buyers

 PROPERTY TRANSFER TAX EXEMPTION FOR NEW BUILDS

Buying a newly build home excemption just got more affordable for many British Columbians!

As of April 1, 2024, the exemption has been expanded, reducing or eliminating the Property Transfer Tax (PTT) on qualifying purchases of a principal residence:

Newly Built Home Exemption

Full Exemption: If the fair market value of your new home is $1,100,000 or less, you may be eligible for a full exemption from PTT—up from the previous $750,000 threshold.

Partial Exemption: Homes valued between $1,100,000 and $1,150,000 may still qualify for a partial exemption, with the benefit phasing out entirely at $1.15 million.

First-Time Home Buyers' Exemption

Full Exemption: Applicable to homes with a fair market value (FMV) of $835,000 or less.

Partial Exemption: Available for homes with an FMV between $835,000 and $860,000, with the exemption amount decreasing as the FMV approaches $860,000.

No Exemption: Homes with an FMV over $860,000 do not qualify for this exemption

This is excellent news for pre-sale buyers—especially first-time homeowners—who are looking to reduce closing costs. If you’re considering a pre-sale condo, this exemption could save you thousands of dollars.

Need help figuring out if you qualify? I’d be happy to walk you through the details.

 WHAT IF GST IS REMOVED FROM NEW CONSTRUCTION?

There’s growing political momentum around making new homes more affordable. Both Mark Carney and Pierre Poilievre have publicly floated the idea of removing GST from new home construction, particularly to boost housing supply and reduce costs for buyers.

If this policy is implemented, here’s what it could mean for pre-sale buyers:

Lower Upfront Costs

Right now, new construction is subject to 5% GST, which is often added on top of the purchase price—especially for homes priced over $450,000 (where the federal GST rebate doesn’t apply). If GST is removed, that could mean instant savings of tens of thousands of dollars for buyers.

Increased Demand

Pre-sales could see a surge in buyer interest if GST is lifted. This could lead to more competition for units, particularly in projects that are already well-priced or in desirable locations.

More Construction Activity

Removing GST could encourage more developers to launch projects, potentially increasing the supply of new homes across BC. That’s a long-term win for affordability and choice.

Timing Matters

If you’re considering a pre-sale purchase, it’s worth staying informed about when (or if) this exemption is rolled out. Developers may start offering incentives or adjusting pricing based on expected changes.