FAQ
Frequently Asked Questions
Here are some of the most common questions regarding notary services.
The property transfer tax rate is:
- 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% on the portion of the fair market value greater than $3,000,000 (effective February 21, 2018).
If the property is classified as residential and farm, or is residential mixed class (such as residential and commercial), you pay the further 2% tax on only the residential portion of the property.
The First Time Home Buyers’ Program reduces or eliminates the amount of property transfer tax you pay when you purchase your first home. If you qualify for the program, you may be eligible for either a full or partial exemption from the tax.
If one or more of the purchasers don’t qualify, only the percentage of interest that the first time home buyer(s) have in the property is eligible.
Do I Qualify?
To qualify for a full exemption, at the time the property is registered you must:
- be a Canadian citizen or permanent resident
- have lived in B.C. for 12 consecutive months immediately before the date you register the property or filed at least 2 income tax returns as a B.C. resident in the last 6 years
- have never owned an interest in a principal residence anywhere in the world at any time
- have never received a first time home buyers’ exemption or refund
and the property must:
- be located in B.C.
- only be used as your principal residence
- have a fair market value of:
$475,000 or less if registered on or before February 21, 2017, or
$500,000 or less if registered on or after February 22, 2017 - be 0.5 hectares (1.24 acres) or smaller
You may qualify for a partial exemption from the tax if the property:
- has a fair market value less than:
$500,000 if registered on or before February 21, 2017, or
$525,000 if registered on or after February 22, 2017 - is larger than 0.5 hectares
- has another building on the property other than the principal residence
In addition to the property transfer tax, tax of 20% of the Purchase Price must be paid by anyone who is not a Canadian citizen or a Permanent Resident, or registered under the Provincial Nominee Program. This applies to any property within:
B.C. Provincial Nominee
If you are a foreign national individual who receives confirmation under the B.C. Provincial Nominee Program, you do not pay the additional property transfer tax if you claim the exemption.
To qualify for this exemption:
- You must be a confirmed B.C. Provincial Nominee when the property transfer is registered with the Land Title Office
- The property must be used as your principal residence
- The property transfer must be made to an individual
You may claim this exemption only once. If you purchase another property, you must pay the additional property transfer tax. Qualifications for every exemption claimed are reviewed.
A power of attorney is a document that a person uses to appoint another person, called an attorney, to make financial and legal decisions for them. Under the Power of Attorney Act, you must be a capable adult (at least 19 years old) to appoint an attorney. A power of attorney ends automatically if you become mentally incapable or die. Capable means you understand the nature and effect of the document when you make it. The Act presumes you are capable unless it’s shown you’re not.
An enduring power of attorney is a document that a capable adult (at least 19 years old) uses to appoint another person, called an attorney, to make financial and legal decisions for them. It continues (or endures) if the adult becomes mentally incapable. In contrast, a power of attorney ends if the adult becomes mentally incapable. An enduring power of attorney must say whether the attorney may exercise authority while the adult is capable and later if the adult becomes incapable, or only while the adult is incapable. It must also say that the authority continues despite the adult’s incapability.
Yes, you can appoint more than one attorney, with different, or the same, authority.
This document has great value for anyone who:
- wants to ensure that trusted person would take care of bill paying, correspondence and financial management in the event of incapacity or absence
- may need assistance with their daily finances now or in the future
- wants to avoid the very lengthy and expensive process of a court appointed committee should they suddenly become incapable
- wants to avoid having the Public Guardian and Trustee take over his or her affairs
NO ONE, not even your spouse or a child, has the legal power to manage your affairs in the absence of an Enduring Power of Attorney.
If you fail to prepare an Enduring Power of Attorney while you have capacity, then a Committee will be appointed by the Court. This requires a Court application setting out the circumstances of the case. Also, Affidavits have to be obtained from two doctors proving mental incapacity. Court applications are time consuming and expensive.
An Enduring Power of Attorney is a simple and inexpensive part of your Estate Plan, and is very easy to put in place while you have the capacity to do so, just ask your Notary Public to draft one for you. Make sure you appoint someone you trust, and an Alternate in the event that your first Attorney is unable to act or has predeceased you.
If you die without a Will, holding assets in British Columbia, you die “intestate”, and your assets will be distributed according to the Wills, Estates and Succession Act (the “Act”). The Act basically writes a Will for you and you have no say in who gets what or who administers it for you. Some people believe if they do not make a Will that their assets will go to the government. This is not always the case.
The Act sets out the scheme of distribution as follows:
The first $300,000.00 goes to the spouse, if there is one if they have children in common and $150,000 of they do not. The balance of the money is split equally between the spouse and the children. If the children are minors, then the money is held by the Public Guardian and Trustee until the children reach the age of nineteen (19) when it is paid to them. There is no opportunity to set up a trust, or have the spouse or parent of the child administer the money. If there are no children, or spouse, then your estate is generally distributed to family members in the following priority:
(a) your parents;
(b) your brothers and sisters;
(c) your nieces and nephews;
If there are no nieces and nephews, then the estate will go to the government.
The Act only deals with assets solely in the name of the deceased. Many assets such as property held in joint tenancy and Registered Retirement Savings Plans (RRSPs) and life insurance policies that are specifically designated to a beneficiary are distributed by operation of law and not by the Act. Many couples will hold all of their assets jointly and designate each other as beneficiaries so on the death of one spouse all assets are distributed to the surviving spouse even if there are children.
Dying without a Will does not mean your estate goes to the government, but it does mean you do not choose who your beneficiaries are. It can also mean delays, extra expenses, and considerable inconvenience and even hardship for your survivors.
Probate is having the court establish that a Will is valid.
The basic fee payable for submitting the probate application for the grant is $200.00. In addition to the basic application fee, the probate fees are calculated as follows:
$6 for each $1,000 or part of $1,000 of the value of the estate in excess of $25,000, up to $50,000, plus $14 for each $1,000 or part of $1,000 of the value of the estate in excess of $50,000.
For example, if an estate has a gross value of $1,554,600, $2,000,000 the total fee payable will be:
Basic Fee $200.00 Additional Fee (a) ($50,000 – $25,000) ÷ 1,000 x $6 = $150.00 (b) ($2,000,000 – $50,000) ÷ 1,000 x $14 = $27,300
Total $27,650
If the value of the estate in British Columbia does not exceed $25,000, no probate fee is payable, and only the basic application fee of $200 is required. For large estate, it is possible to reduce probate fees with proper estate planning.
Any adult who wants to ensure that a specific person or persons are appointed to make decisions for them, especially if they have no spouse; or no spouse and no children, or if their children are in conflict with one another or would not be good decision makers.
People who want to ensure that their wishes are followed even if:
- their family’s wishes differ from their own
- they have no family who could be appointed as their representative
- they have concerns that differing opinions among their family might cause conflict if a decision has to be made about where you should live or end of life.
Anyone who wants to transfer an asset, as a gift, before their death.
Many BC homeowners have significant equity in their homes; either because they’ve paid down an existing mortgage, enjoyed a significant increase in the value of their home as house prices have risen- or both.
Mortgage Refinancing involves borrowing money- usually in the form of a line of credit-against the current value of your home. Using your home as security, you can arrange to have funds available to help you pay for your children’s education, purchase a second property for an investment or recreation, take that long-delayed dream vacation or simply ease your retirement.
Mortgage Refinancing allows you to use your home to get more out of life.
If you’re considering a Mortgage Refinancing and want to learn more, call our office. We can help you understand and navigate the complete refinancing process.
If you already have a lender-usually a bank or mortgage broker-they will ask you to complete a credit application, often on-line but sometimes in hard copy. Many lenders can approve your credit application within hours or days. If you aren’t sure which lender to call, we can refer you to lenders who we work with regularly.
Once your credit application is approved, it’s time to visit our office. We will provide legal advice, complete the necessary documents and return them to your lender to help them make your funds available as quickly and conveniently as possible.
A power of attorney ends automatically when you die.
You can end a power of attorney by giving your attorney a written notice saying that their power has ended. Then you should also destroy all originals and duplicates of the document (to prevent misuse by the attorney). And give written notice that the power of attorney has ended to any financial institutions or other third parties where your attorney may have acted for you.
You can also put an end-date in the document, or explain circumstances when it will end, for example, when you return home.
To end a power of attorney dealing with land, you must file a document called a “Notice of Revocation” in the Land Title Office where the land is registered.
Any adult in B.C. who owns property including real estate, vehicles or other assets; has a dependent spouse or children, and wishes to have someone they know and trust take care of their estate after their death.
Links
These are some useful links to help you personally and in your business.
Register a Company in BC:
https://www.corporateonline.gov.bc.ca/corporateonline/colin/static/colin/html/index.html
The Society of Notaries Public of BC:
http://www.notaries.bc.ca/home/index.rails
BC’s Land Title Office:
BC Ministry of Justice- Wills and Estates:
https://www2.gov.bc.ca/gov/content/life-events/death/wills-estates
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For a quote or more information please feel free to contact Sima now at 604.929.2902 or by email to notary@1notary1.com.