The bottom line is that buying real estate in Canada is very easy.

From a residency point of view, if you plan to stay in Canada for 6 months or less each year, the government considers you a non-resident, which means that you can still open a bank account and buy property, etc. If you plan to live in Canada for more than 6 months per year, you must apply for immigrant status.

It is important to note, however, that while the majority of Provinces (British Columbia, Ontario, Quebec, Nova Scotia, Newfoundland, New Brunswick) have no restrictions on foreign ownership of real estate in Canada, some do limit the amount of property/land that a non-resident can purchase. On Prince Edward Island, non-resident buyers must apply to the Island Regulatory and Appeals Commission for land over 5 acres in size, or land with a shore frontage greater than 165 feet. In Manitoba, non-residents are prevented from owning farmland unless they actually plan to move there within 2 years. Non-residents may not own land over 10 acres in size in Saskatchewan, whilst in Alberta they may only own up to 2 plots of land not exceeding 20 acres in total.

Another reason why BC acreages, farmland and ranch property is a sound investment.

There are certain legal and accounting issues that arise when a non-resident of Canada acquires or sells property in Canada. These issues are set out below.

Non-Resident Purchases

The issues that arise from a non-resident purchase are not from the purchase of the property, but rather from holding the property over a long period of time. There are no restrictions for a non-resident purchase, nor are there tax implications. BC is one of the only places you can buy a property without a size restriction in many provinces the limit is 5 or 10 acres, many countries only allow purchases for personal use and many others restrict it altogether. With all of what BC has to offer (lots of water, beautiful landscapes, fertile soils and endless recreation... BC large acreage and farmland is a sound investment. Also a non-resident may purchase as many properties as they wish.

Tax issues may arise on the holding of property by non-residents. Non-residents of Canada are subject to tax on various kinds of income paid to them, including rental income. If you are a non-resident and are renting property in Canada, a tax return must be filed each year.

Non-Resident Sales

While there are no issues when a non-resident acquires property, this is certainly not the case when a non-resident disposes of property.

The Income Tax Act of Canada provides that whenever a non-resident disposes of property, the non-resident is required to pay the appropriate amount of taxes on any gain. In order to satisfy the purchaser that the appropriate amount of taxes are being paid, the vendor must provide to the purchaser, on or before closing, a clearance certificate from Revenue Canada. This certificate is issued by the federal government and certifies that a certain amount of money is payable for the taxes. The amount owing is deducted from the sale proceeds and sent directly to the federal government by the vendor's lawyer.

The clearance certificate is issued pursuant to section 116 of the Income Tax Act and is usually required on the closing date. It may be applied for in advance of the closing by the vendor, but not until there has been a contract of purchase and sale entered into by the vendor, with all subjects being removed. The wait for the clearance certificate is usually around 6-8 weeks, so in a perfect world, there would be a 6-8 week lead-time between when the subjects are removed and the completion date.

Complications can arise if the certificate is not obtained prior to the closing date. In such a case, the purchaser is required to holdback from the sale proceeds a percentage of the selling price. This percentage is either 25% or 50%, depending on whether the property is non-depreciable property (a residence of the vendor) or depreciable property (the property has been rented). The transaction closes with the money remaining in a lawyer's trust account until the certificate is obtained. Once the certificate is obtained, the taxes are paid from the holdback and the vendor receives any amount left over.

Note that the holdback is based on the selling price, not the equity in the property. If there is financing on the property, the vendor may need to pay this financing from other sources.

Non-Resident Selling Canadian Real Estate

If you are a non-resident involved in the selling of Canadian real estate assets that you own, you should be aware of the applicable provisions of the Income Tax Act to avoid problems when the time comes for the sale to complete. In brief, if taxes are owing to the Canada Customs and Revenue Agency (Revenue Canada) by a property owner, the property can be charged to secure payment of outstanding taxes. This applies to both residents and non-residents. What, however, specifically applies in the case of non-residents selling Canadian real estate is that the property may be charged even after being transferred to the new owner.

In order to be protected and pursuant to the requirement of the Income Tax Act, the Buyer must make a 'reasonable inquiry' as to the Seller's residency status. Thus the need for indicating 'Resident of Canada/Non- Resident of Canada' under the Sellers information in the top left section of the Contract of Purchase and Sale. The Buyer's notary or lawyer will make a similar inquiry of the Seller when the conveyancing documents are signed. If the Seller is a non-resident of Canada, he must apply for and obtain a Clearance Certificate from Revenue Canada and provide the Buyer with this Certificate. It normally takes four to six weeks for Revenue Canada to issue a Clearance Certificate. If a Clearance Certificate is not provided to the Buyer or his conveyancing representative, then the Buyer must hold back one-third of the sale price until the Certificate is provided. If the Certificate, furthermore, is not forthcoming the holdback money is then remitted to Revenue Canada and the Buyer - and the newly acquired property - are protected from any further liability or charge.

A problem, moreover, may arise at the time of completion if, for instance, the existing mortgage exceeds two-thirds of the sale price and there are therefore no sufficient proceeds to allow for the holdback and clear title, not to mention payment of closing costs. So therefore, if you are (or will be at the time of completion) a non-resident Seller be sure to raise this issue before the property is sold and there is still time to obtain the required Clearance Certificate. Likewise, if you are the Buyer and you learn that the Seller is a non-resident, be sure there is ample time before completion and possession.

Who is a Non-Resident?

The term "resident" is not defined in the Income Tax Act, however, the courts have held "residence" to be a "matter of the degree to which a person in mind and fact settles into or maintains or centralizes his ordinary mode of living with its accessories in social relations, interests and conveniences at or in the place in question." The courts have held that an individual is "ordinarily resident" in Canada for tax purposes if Canada is the place where the individual, in the settled routine of his or her life, regularly, normally or customarily lives. In making a determination of residence status, all of the relevant facts in each case must be considered, including residential ties with Canada and length of time, object, intention and continuity with respect to stays in Canada and abroad.

The British Columbia Provincial Nominee Program (BC PNP) offers accelerated immigration for qualified skilled workers and experienced entrepreneurs who wish to settle in British Columbia (BC) and become permanent residents of Canada.

This program is administered on behalf of the Province of B.C. by the Ministry of Advanced Education and Labour Market Development in partnership with Citizenship and Immigration Canada (CIC), the federal government agency responsible for immigration.

How It Works

The Provincial Nominee Program selects and nominates potential immigrants for permanent residence who have the ability to become economically established in B.C. and who will provide significant economic benefits to the province.

Individuals nominated by the Province of B.C., together with their spouse and dependent children, are eligible to apply for a permanent resident visa from Citizenship and Immigration Canada in the Provincial Nominee Class. Citizenship and Immigration Canada gives priority to processing permanent resident visa applications for provincial nominees. Citizenship and Immigration Canada makes the final decision on these applications.

Eligible Business

The BC PNP will only consider applications to establish or purchase and expand a business that meet the following eligibility criteria:

1. The business must be operated for the primary purpose of earning profits from active income through the provision of products/services.
2. The business must have good potential for sustained commercial viability.
3. The business must have the potential to create significant economic benefits to British Columbia by contributing to one or more of the following:

• increasing value-added manufacturing, processing or primary resource activity
• increasing exports of goods or services
• increasing destination tourism
• increasing R&D/technology commercialization
• developing innovative and creative approaches to traditional businesses
• transferring technology, skills and specialized know-how to the province
• servicing an under-served local or regional market

The BC PNP will give special priority to business proposals that contribute to:

1. Expanding business with the Asia Pacific region
2. Utilizing wood infected by Mountain Pine Beetle
3. Diversifying the economies of communities affected by Mountain Pine Beetle damage
4. Creating business partnerships with the province's First Nations (aboriginal people)
5. Developing the province's emerging technology industries: alternative energy, clean technologies, information technology, new media, and life sciences

Ineligible Business

Applications will not be considered for the following types of businesses:

1. Bed and breakfasts, hobby farms and home-based businesses
2. Pay day loan, cheque cashing, money changing and cash machine businesses
3. Pawnbrokers
4. Coin operated laundries
5. Automated car wash operations
6. Sale of used goods (excluding collectibles, or where the business provides value-added services such as repairs, refurbishing, or recycling)
7. Real estate development/brokerage, insurance brokerage or business brokerage
8. Businesses involved in the production, distribution or sale of pornographic or sexually explicit products or services, or in the provision of sexually oriented services
9. Any other type of business that by association would tend to bring the program or the Government of British Columbia into disrepute

In addition, applications will not be considered for the following types of businesses in the Vancouver metropolitan area or the Abbotsford metropolitan area:

1. Convenience stores
2. Video and DVD rental stores
3. Gasoline service stations
4. Personal dry cleaning services
5. Franchise operations, unless pre-authorized by the BC PNP

Benefits of BC PNP Skilled Worker (Program)

The benefit for the prospective immigrant of participating under BC PNP is two-fold.

1. The first benefit is there are certain persons who will qualify for immigration under BC PNP that would not qualify under the Federal immigration program.
2. The second benefit is the processing time is much faster under the BC PNP program (6 to 9 months) than the Federal immigration program (18 to 30 months). BC PNP portion processing time is 2-3 weeks. Federal portion is 6-8 months.

Work Visas Under BC PNP Skilled Worker

After the applicant has obtained BC PNP approval and been nominated, a letter is issued to the relevant Citizenship and Immigration Canada post confirming the applicant has been nominated. This letter also contains wording that it is requested the applicant's "application for a work permit (to be submitted by the applicant) be processed without the need for HRSDC confirmation." This letter is also sent to the applicant. Applicant can attach the BC PNP letter to his work visa application when he files.

3 Categories to BC PNP Business

There have been major changes in the Business Immigrants categories. The categories in the Business Immigrants category are (1) Business Skills; (2) Regional Business: and (3) Strategic Projects.

The business component of the BC PNP offers accelerated immigration for qualified entrepreneurs who wish to settle in B.C. and become permanent residents of Canada.

The BC PNP selects and nominates for permanent residence potential business immigrants who have the ability to establish themselves successfully in B.C. and develop a business that will provide significant economic benefits to the province. Applicants must meet the program's selection criteria but should be aware that meeting the minimum requirements does not guarantee approval. The BC PNP establishes nomination targets for the program, and gives priority to candidates who demonstrate the greatest potential to create a successful business and contribute economic benefits to the province.

1. Business Skills

An application under Business Skills allows the applicant to set up the business anywhere in BC, including Vancouver. The requirements are:

1. Make a personal investment of at least $400,000 CAD to establish or to purchase and expand an eligible business anywhere in B.C.
2. Create at least 3 new jobs in the business for Canadians or permanent residents.
3. Own at least one third (33 1/3%) of the equity of the business.
4. Provide active and on-going participation in the day to day management and direction of the business.
5. Demonstrate that they have:

1. the skills and experience necessary to establish and operate a commercially viable business in B.C.
2. a personal net worth of at least $800,000 CAD obtained from legal sources
3. sufficient unencumbered personal funds to make the required investment
4. a viable business proposal

6. Sign a Performance Agreement with the Province of British Columbia.
7. Sign a Deposit Agreement with the Province of British Columbia, if they are seeking a Fast Track nomination.

Principal applicants in the Business Skills category may include one foreign key staff person as a co-applicant for nomination, but must still create three jobs for Canadians or permanent residents.

Applications will not be accepted from individuals who have an unresolved refugee claim in Canada, are in Canada illegally, are under a removal order in Canada, or are prohibited from entering Canada.

The applicant now has two options:

1. Getting BC PNP approval, getting the two year work permit, meeting the requirements and then applying for the permanent resident status; or
2. Getting BC PNP approval, taking the "Fast Track" option and paying the $125,000 performance bond and getting immediate nomination for permanent residence and being "fast tracked" for expedited processing of the permanent residence part of the application. If the applicant performs what the applicant has agreed to the applicant will get the $125,000 performance bond returned to the applicant. If the applicant fails to do what the applicant has agreed to do, the Province of BC and BC PNP will keep the $125,000 amount but the applicant will keep the permanent residence status. BC PNP has indicated the applicant must make a "good faith" effort to perform or BC PNP prior to the applicant finalizing the permanent residence status reserves the right to return the $125,000 and not allow the applicant to get permanent residence status.

2. Regional Business

An application under Business Skills allows the applicant to set up the business anywhere in BC, that is outside the Greater Vancouver Regional District ("GVRD") and Abbotsford. The requirements are:

1. Make a personal investment of at least $200,000 CAD to establish or to purchase and expand an eligible business anywhere in B.C. outside of the Vancouver metropolitan area [PDF 316KB] or the Abbotsford metropolitan area [PDF 290KB]
2. Create at least one new job in the business for a Canadian or permanent resident.
3. Own at least one third (33 1/3%) of the equity of the business.
4. Provide active and on-going participation in the day to day management and direction of the business.
5. Demonstrate that they have:

• the skills and experience necessary to establish and operate a commercially viable business in B.C.
• a personal net worth of at least $400,000 CAD obtained from legal sources.
• sufficient unencumbered personal funds to make the required investment a viable business proposal.

6. Sign a Performance Agreement with the Province of British Columbia.
7. Sign a Deposit Agreement with the Province of British Columbia if they are seeking a Fast Track nomination.

Applications in the regional business category are limited to principal applicants  there is no provision to include foreign key staff as co-applicants for nomination.

Applications will not be accepted from individuals who have an unresolved refugee claim in Canada, are in Canada illegally, are under a removal order in Canada or are prohibited from entering Canada.

The applicant now has two options:

1. Getting BC PNP approval, getting the two year work permit, meeting the requirements and then applying for the permanent resident status; or
2. Getting BC PNP approval, taking the "Fast Track" option and paying the $125,000 performance bond and getting immediate nomination for permanent residence and being "fast tracked" for expedited processing of the permanent residence part of the application.

3. Strategic Projects

Strategic Projects is the third category in the Business Immigrant categories. Strategic Projects generally are bigger investment projects. Strategic Projects applications allow the applicant to include larger numbers of additional key staff in the application. The new requirements are:

Companies applying in this category will be required to:

1. Make a minimum equity investment of $500,000.
2. Create at least three jobs for Canadians or permanent residents in B.C. for each nominee applicant put forward by the company.
3. Demonstrate a record of good business practices and successful business operations outside of Canada that are relevant to the proposed business.
4. Establish or purchase and expand an eligible business anywhere in B.C.
5. Incorporate a Canadian subsidiary or register an extra-provincial company in B.C. to operate the proposed business.
6. Demonstrate that the nominee applicants are qualified senior personnel who are essential to establishing or expanding and operating the proposed business in B.C.
7. Sign a Performance Agreement with the Province of British Columbia.

Update:
In general, the requirements under the categories have been made less onerous. There are reduced amounts being required for net worth and investment. The employment requirements to create new employment for Canadians have been reduced. The percentage required to be owned of the business has been reduced. The most interesting development is the creation of a "Fast Track" option under which the applicant pays a $125,000 performance bond that will allow the applicant to have the application immediately "fast tracked" to obtain Canadian permanent resident status. Applicants in the Business Immigrants categories should note that the Fast Track option of paying the $125,000 performance bond is NOT available to key staff included in their application. The forms for the Business Immigrant categories are now more detailed. It is hoped this will lead to reduced processing time of applications as more detailed information will be required to be initially included.

Federal Investor Immigration Program

If you are a successful businessman who wishes to immigrate to Canada you should consider the Federal Investor immigration category. If you are a Canadian Landed Immigrant or Canadian citizen who is thinking about sponsoring your parents you should also consider having your parents immigrate to Canada using the Federal Investor Immigration Category.

The Canadian Federal government recently announced that Federal Investor Immigration cases will receive new priority faster processing service. They have announced these cases will be processed within one year of filing. This is a significant improvement over the past processing times of 2-3 years in many offices of these types of cases.

Recently the Federal government has recently put less emphasis on the sponsorship of parent category. The time for processing of the sponsorship of parent cases has gotten considerably longer and in some cases is now approximately 5 years. This is significantly slower compared to the previous 12-18 months processing times.

In order to be eligible for the Federal Investor Immigration program there are a number of basic requirements: $800,000 net worth of immigrant and spouse/common law partner; invest $400,000 in a federal approved fund; and have business experience.

There are two options concerning having business experience. Option one is the management of at least 5 full time job equivalent employees for two years within the 5 year period before the date of the filing of the application and ending on the date the determination is made in respect of the application. Option two is the management and control of a qualifying business for two years within the 5 year period before the date of the filing of the application and ending on the date the determination is made in respect of the application.

The business must meet certain criteria to be a qualifying business and be eligible. There are four areas of consideration. These are number of employees, sales, net income and assets. There is a formula used that depends on the amount of ownership in the business.

The $400,000 that is invested must be left in the federal approved fund for a period of five years. At the end of five years the capital will be returned.

There are also financing options available with various Canadian financial institutions. In these cases the applicant pays the Canadian financial institution an amount (at present approximately $110,000). The bank lends the applicant the balance (approximately $290,000) required to invest the required total of $400,000. At the end of the five year period the applicant does not receive back any money. The $110,000 has been used to paid for the borrowing and administrative charges of the bank.

The new priority service for the Federal Investor Immigration Program has been created to allow the federal investor program to compete with the Quebec Investor Immigration Program. The Quebec program has traditionally had a significantly faster processing time with similar eligibility requirements. With a similar processing time the main difference will now be under the federal program the applicant can live any where in Canada. Under the Quebec program the applicant must convince a Quebec officer in an interview the applicant wishes to settle in Quebec.

With the new priority given to the Investor application and the much faster processing times, and with the reduction in emphasis on the sponsorship of parents category and the much slower processing times, applicants that can qualify and wish to immigrate to Canada quickly should consider the investor class.

Investment in the Business (Share Purchase)

If you are buying the shares of an existing operating business no more than two thirds of the applicable minimum personal investment can apply to the purchase of shares and you must acquire ownership and control of at least one third of the business. The shares you buy to purchase the business must be common full-voting shares and must not have a redemption option.

If you are buying the assets of an existing business no more than two thirds of the applicable personal investment can be applied to the purchase of these assets.

The applicable minimum personal investment can not be applied to the purchase of real estate unless you can show that it is essential to the business, in which case no more than two thirds of this investment can be applied for this purpose.

The applicable minimum personal investment can be applied to the following types of business costs, provided that the amounts are reasonable for the business involved:

1. Machinery, equipment, furniture and fixtures
2. Leasehold improvements
3. Inventory
4. Patents and licenses
5. Franchise purchase fees
6. Allowable real estate and franchises
7. Initial promotion and marketing
8. Other start-up expenses, such as incorporation and permit fees, legal and other professional fees

If, because of the nature of your business, you are unable to apply the full amount of the minimum required personal equity investment to these types of expenditures, you may apply the balance to wages, building rent and other normal operating expenses (excluding any payments to yourself or family members) during the first six months of operations if you are establishing a new business, or three months if you are buying a franchise or an existing business.

Every year the United Nations declares Canada to be the best place in the world to live. But no one ever says exactly what part of Canada. Resolute in February? Winnipeg during mosquito season? Ottawa during Question Period? We don't think so.

In the interests of clarity (and controversy), we'd like to propose that the honour belongs to BC. As evidence we present this list of 100 of the best things about living here, 100 things that make us stick out our chests with pride. Things like Nanaimo bars, and Kermode bears, and Triple O sauce. Things that contain the flavour of life west of the Rockies.

For the full list click here.

For answers to most of your questions and concerns in regards to getting ready to sell click on the following link:
http://www.cmhc-schl.gc.ca/en/co/buho/buho_002.cfm?renderforprint=1

If you have any additional questions please feel free to call Matt as each property and market situation is unique.

Buying a home or vacation home is a major emotional and financial commitment. Here is some information to get you started:
http://www.cmhc-schl.gc.ca/en/co/buho/hostst/index.cfm?renderforprint=1

Negotiating a new mortgage or a change to your existing mortgage requires more prep work than walking in and screaming: "I've been a customer at this bank for eight years and never missed a mortgage payment." Getting a mortgage is sometimes hard enough. Getting the best mortgage - as in a mortgage with the absolutely lowest 'not for everyone' rate and one with various other concessions - can be even harder. Hard, but not impossible.

1. Concessions are negotiated in exactly the same manner as a whole new mortgage. Your banker must be educated as to why you deserve special treatment. It is important to demonstrate how wonderful your application is when compared to the dozen or so mortgage files piled on the mortgage manager's desk. Yes, the length of time you've banked at the institution is important, but only after you've met the bank's basic criteria.
2. The better you look, the better the deal you can wring from the banker. When it comes to loans and mortgages, most banks have one-half-per-cent to a full one per-cent discretionary leeway in their posted rates. Simply ask for the best rate. Don't worry. They can afford it. Today's financial institutions are flush with mortgage money. The real-estate market volume is off in many markets by 30 per cent, banks are prepared to lend more, competition is fierce. Any stated bank rate can be beaten, just for the asking. If you're a "heavyweight" borrower, with lots of clout, you can get up to a three-quarters of one-per-cent reduction. Just by asking. More you may have special clauses, like no-frill mortgages or early closing.
3. Rather than the standard 60-day grace period on a pre-approved mortgage, banks will sometimes hold it open to a full 90 days. Cheaper money than the norm, held open for you longer than the norm... but only if you can give the banks solid reasons for doing so.
4. While banks should be more consumer-oriented and are doing their darn best to appear that way in their promotion literature and television ads, keep in mind any concession granted to you means less income for them. What you gain, they lose. If a bank is to feel comfortable making a smaller profit, it must feel secure knowing the profit is coming in without interruption. For example, by you shifting your other chequing, savings and other accounts and RRSPs etc. to the bank. While the bank won't get rich on your mortgage alone, it will benefit from having all of your business. Offer to give them everything and it should swing the balance in your favor.
5. Understand exactly what elements a banker seeks when appraising risk as the bank may not be willing to look beyond the surface facts on your application. But if all the "right" elements are there, the better the chance the loan will be approved without question. Banks rarely rely on charisma as the sole reason for granting concessions (the Reichmann brothers being an exception... and look what happened there). The more your strengths are reinforced on paper, the better and easier the negotiations.
6. Remember, the person you see and charm at the bank or financial institution may not be the one making the ultimate decision about your mortgage concession. Before you visit your banker, learn how to sell your application. Consider the following factors to determine your strengths:

1. Equity. Do you have more than 25 percent equity in your home or can you ante in a 25-per-cent downpayment on the manse or cubicle of your dreams? The stronger the chains that bind you, the happier the banker. Besides, if you default and the place goes into foreclosure, your 25-per cent interest should - and will - take the bullet for any losses if the market has meanwhile gone into a downturn.
2. Stability. Have you been working in your current field for two or three years? Have you suffered any interruptions in your work history? If so, be ready to explain why. Banks don't like fickle work histories and/or erratic incomes.
3. Cash flow. After factoring in the principal/interest payments and property taxes, do these payments represent less than 30 per cent of your gross income?
4. Equity is the portion of the real estate asset which you own outright. As such, it's one of the most important elements of a mortgage application. Some institutions will lend mortgage money based on the borrower's equity (aka downpayment) in the property in question. The borrower might have relatively little income or job stability, but if he or she can come up with a sizable piece of cash, the application may still be approved. But even if they do have a stable income and work history, most people are either unable or unwilling to provide a 35- to 50-per-cent downpayment to mollify a skittish banker. But if the mortgagee ends up with "weak hands" and is forced to default, don't forget: the lender can fire-sale the property and still likely come out with a profit, whereas the mortgagee loses it all. Remember too, today's interest rates are still relatively low historically. When that cheap mortgage has to be renegotiated when it comes to renewal time and the mortgagee can't take the new financial strain, a default is likely. Being no fools, bankers are aware of this. To them, stability is more important than a large but fleeting wad of cash.

7. Some banks won't advance 75 per cent of value on non-residential properties. If you're not living in it and thus haven't as strong an emotional and practical interest in the place, neither does the banker. In general it's much easier negotiating a loan when the bank is asked to provide 65 per cent or less. Raw-land advances are generally 50 per cent or less than the property's value. But by placing the mortgage on your existing property, or offering it as a co-guarantee, advance amounts can be increased dramatically.
8. Call it a numbers dance but sometimes a large downpayment can save you a good chunk of money in both the short- and long-term. By law, banks can only advance up to 75 percent of the property's assessed value. Anything more than this and the subsequent "high ratio" loan must be reviewed and insured through Canada Mortgage and Housing Corporation. Which means, of course, an extra premium payment tacked onto each and every monthly mortgage payment. When taken to the end of the standard 25-year amortization period, that initial CMHC insurance can compound out to literally tens of thousands of dollars in extra payments. While there are more creative ways to obtain high-ratio financing such as vendor take-backs or involving alternative properties as collateral, in general, there will always be a premium or higher rate of interest on any mortgage loans greater than 75 per cent of the property's value.
9. As stability is the measure of your "reliability", if you've changed jobs within the past year, be sure to emphasize your previous and (it's hoped) uninterrupted experience in the industry in which you've committed your life. Before heading off to the bank, be sure to call the Consumer Information Department at the Credit Bureau of B.C. and see how you measure up. (In Vancouver, telephone (604) 685-2744. In other areas, check with the Better Business Bureau for the correct credit department.) The Credit Bureau acts as a reporting agency on personal and business credit worthiness. If something is incorrect or amiss in your file, send in the appropriate documentation and get it corrected. You may also enter a narrative to explain the extenuating circumstances behind any previous credit misunderstandings.
10. Cash flow or debt-service ability is probably one of the most highly scrutinized elements of any mortgage application. If you don't have a downpayment in excess of 35 per cent, the financial institution will be most interested in how you're able to prove your ability to repay the loan. If you work in a salaried job, proving this ability is simple. The banks simply want to be assured that no more than 32 per cent of your gross income will be dedicated towards the following: mortgage payments; property taxes; heat; one-half maintenance payments. Factor in all other debt obligations such as credit cards, car loans, alimony etc., and the complete load shouldn't - in the bank's eyes - exceed 42 per cent of your gross income.
11. If self-employed, proving your debt-payment ability becomes a little more difficult. The banks commonly look at a three-year average of your personal income to determine your qualification. You in turn may add auto expenses, depreciation, net income and, occasionally, rent (if your office is in your rental digs) etc. back into the mix. Most lenders recognize that self-employed people/businesses enjoy certain tax concessions and write-offs which means that smaller overall income actually translates out to a larger net income and thus a greater ability to support a larger mortgage. Before you visit the lender, see your accountant.
12. If uncertain of your standing and clout, make your run at the bank manager, rather than the mortgage officer. The manager often can make an immediate call on an interest-rate reduction; the mortgage officer needs permission.
13. Timing can also be an issue. In some markets and in periods when lenders are slugging it out for new clients, it's sometimes possible to be seen in a much more favorable light.
14. Tens of thousands of dollars can be saved by shortening the amortization period from the standard 25 years to a fewer number of years. Our favorite term happens to be 17 years. It maximizes benefits without unduly increasing the mortgage payment beyond the stretching point. Have your mortgage officer work out the mortgage repayment period over 25 and 17 years. Compare the payments: the amount saved is astounding. For instance, a $100,000 mortgage carried over 25 years carries a payment of $861 per month. Carried over 17 years, the payment is $978 or $117 more per month. But for the extra cost of $3 per day you will save $82,656 in interest payments. If an extra $100 a month is too much, make it an extra $50. The saving is worth it.
15. FINAL THOUGHTS. Negotiating a mortgage when self-employed can be tricky. Before you go in, it's wise to contact the financial institution or your mortgage broker to get a handle on the policy for calculating self-employed cashflows and payment abilities. Forewarned is forearmed. You may try and find a co-signer (your benevolent mom or dad for instance).

Equity, stability, cashflow: different financial institutions put different weight upon each of these three elements. A particular ratio that might fly with one, will flop with another. Some lenders demand your application have all three elements, others are comfortable with two.

An important point: if you're refused by one institution, don't be discouraged. Instead, politely ask why, do your best to rectify the problem... and then go onto the next institution. (Or avoid the fuss and get your mortgage broker to do the dance on your behalf. Yes, this is a plug for mortgage brokers but remember, in the majority of cases they're paid a commission from the 'winning' lender and thus won't cost you a cent more than you would have paid for a 'normal' mortgage anyway.) In certain cases, say where two of the three prerequisites are "twisted" (i.e you have terrible credit and want to buy a swamp), you may be asked to replace the commission which would have been paid by the bank. This can run anywhere from one-half to a full one per cent of the mortgage... or more, if your situation is really twisted.

To successfully negotiate a mortgage, remember that attitude counts. Lending has a very human element to it. If you're organized, courteous and make a small effort to assist the loans officer, you'll often discover that small variations or special requests in your application may be treated with "exception" and thus granted. The principal reason many mortgages are declined is because of poor communications between the client and the potential lending institution. In other words, comb your hair, have tidy and comprehensive paperwork and try not to shriek as per the opening paragraph to this article.

In this crazy world, go long. A 6.5-per-cent ten-year mortgage (Jan 1999) and the 5.75% 5-year mortgage are at a 42-year low. Nobody has the proverbial crystal ball, but rates could suddenly rise. Play it safe and go for five years. If you must gamble, match your renewal date to the U.S. election year (autumn of 2000, autumn of 2004, autumn of 2008 etc. and so forth) where interest rates traditionally fall in a bid to cheer up the voters.

Finally, get yourself organized. Get your "ducks in a row" in terms of a nice presentation, the offer to move your accounts in from the other financial institutions and so forth. And while you should always be polite (no screaming), polite people can still be firm. Bargain hard. Remember, a half-point reduction can save more than $3,000 in a five-year term. If you put that savings into paying down the principal, you're even farther ahead. Happy hunting.

1. Capital gains on principle residence is tax free
2. Reduced tax rate on investment real estate
3. Ability to write off rental income
4. Carry forward of capital losses
5. Ability to deduct investment expenses against income
6. Real estate is a hedge against inflation
7. Primary residence tax break can be split between more than one property

*contact a qualified real estate accountant to learn more about how the above considerations affect you

How would it work?

Well, take a typical, whole ownership property and split the title into fractions so that different people could each own their share of the property. A legal structure would be put in place that defined when each of the owners could use the property so it was clear and easy. Then an outside third party manager would be put in place to manage the property on behalf of all of the owners to make it convenient and hassle free and to make sure that when each owner arrived to use their property that it would be perfect and ready for them to simply come in and enjoy. The property would typically come fully furnished so that there was no argument by the owners on the furnishings. Each owner could purchase the amount of, or fraction of the property that they wanted and that was a fit for them financially.

Because each owner essentially has their own title for their fraction of the property, they can put a mortgage on their share of the property (although there are some complications), sell their share or leave their share to someone as part of their estate, all without having to talk to or impacting the other owners in the property. In fact, if you don't want to, you never have to meet, see or talk to the other owners. When you're there it is your property and it feels like you own the whole thing.

So if you want to own a resort property but you know that you'd never use it very much and you either can't justify or afford to purchase the whole property, you now have a great option. Why purchase the whole property if you aren't going to use it all the time. The fractional concept lets you purchase the amount of ownership and use that is right for you. It is much different than a time share which loses value every year, fractional ownership appreciates over time.

To enhance the benefits of fractional property ownership, the fractional property often comes in a project that offers additional amenities and staffing as well as a fabulous location. In addition there might be an exchange program put in place for the property so that the owners can exchange their property for use of resort property in other areas. In terms of use there are a variety of different programs. Some are very straight forward and the time is either fixed or rotates on a fixed basis with other owners. Other programs allow for flex time or some fixed time and flex time. All of the programs work, you just have to make sure that the program works for you.

Common fractions in resort property would be: one half, one third, one quarter, one sixth, one seventh, one eighth, one tenth and one twelfth. It gives you lots of options to choose from to find the perfect fit for you. The most common fraction in British Columbia is one quarter.

Fractional property has been available in North America for over 20 years, but it's really started to take off at a blistering pace in the last seven or eight years. We are now seeing fractional property available in most major resort areas, in golf setting, ski resorts and at the lake and ocean. It's working in houses, condominiums, townhouses and villas.

Contact a Realtor for further information about the risks and benefits of owning fractional Real Estate.

Many recreational developments and properties offer owners the opportunity to include their unit in a rental pool even without being part of a fractional arrangement. In some cases the income will totally cover the cost of ownership, in other cases the tax implications, combined with the wrong product for the market or oversupply will result in poor income flow opportunities. Understanding the local tourism market can give you a good idea of how much revenue can be expected. The zoning can have a major impact on the taxes. Commercially zoned real estate has much higher tax rates than residential. These are important questions to ask and research on your own.

Often the property management company will contact you prior to the season and ask when you expect to use the property or when you will not be using the property. If you change your mind, you can still look into using your unit as long as it has not been rented. Or you can have a previously reserved date entered into the pool if you decide not to use the property, but remember the more warning they have the better the outcome.

The income earned on a given night is usually shared by all of the unit holders who at that time the income was earned had their unit up for rent. For example on Friday night, if there were 100 units in total and 75 units were being used by their owners, only the 25 units who were available for rent (not necessarily rented) would share all of the income earned on that night. A 2 bedroom unit would receive a larger portion that a 1 bedroom. A portion of the income goes to the property management company, and a portion goes to the owner. 60/40 is a common split, but the important thing is what is included. For vacation rentals, having more amenities, more marketing and better service will result in better income in the long run than a more favorable split that has little to offer. These are all important considerations, and should be understood fully before purchasing.

When making any important financial and emotional transaction it is very important to attain third party advice. Remember when you are enquiring about a recreational property straight from the developer or a sales representitive from that particular project they are not working for you and do not have to be licensed Realtors. Of course 99% (if not more) of sales reps are honest, trustworthy, and capable, but their job is to sell you that property. The information you are hearing will always be somewhat biased. By using a third party, either a Realtor's representation, a lawyer's legal opinion, or some other experienced third party source, you ensure that your interests are taken care of. For more information check out our buyer services and see how we can help you attain the property you desire with total confidence.

Many people ignore or do not understand the important role of strata corporations and property management. When you buy a strata unit (condo, town home) and you are essentially becoming a part of a multi-million dollar corporation. There are risks and benefits. It is possible to be sued and it is also possible to make a significant financial gain. But the most overlooked factor is the emotional side and the time and effort required.

The strata fees you pay every month go towards operating the strata corporation and maintaining the property and its value, money well spent, you hope! Does the average person know how to service a large complex? No. You want to be 100% sure the people in charge are qualified to do so. For a small development, maybe the owners can arrange this, but often the best arrangement is for professional property management companies to be hired. This way you are assured that your investment, emotions and home are taken care of properly.

New developments have regulations to follow and the developer must set up the Strata Corporation and a preliminary operating budget for the development; after which it is the responsibility of its owners. It is a major investment, do the right thing and have qualified people manage your property and do your own research into the concept.

In a nut shell, the old saying that fences make good neighbors can be adapted for Strata Corporations to "professional management makes even better neighbors".

• BC Real Estate Association - Understanding Your Relationship with Realtors
• Descriptions/Links to all BC Ski Resorts
• BC/AB Driving Chart (PDF)

Here is a growing list of links to websites that promote & sell recreational property in BC.

I would be privileged to work diligently for you in your property search. If you want to be set up for automatic updates with properties that meet your criteria or do not see what you are looking for please contact me and let me know what your parameters are and I can help you locate that special recreational property.

If you require additional details about any property I can research this on your behalf. In addition to all the properties listed below I have direct access to many more resources. I look forward to helping you find that perfect lifestyle property.

CAUTION: Remember the listing agents for these properties are working for the sellers NOT you - the best they can offer is a dual agency where they are limited in what they can offer. Experience the benefit of using a qualified recreational buyer's agent and help me help you.

AGENTS: If you would like to add your link on this well visited page please send me a link to your website and I will contact you shortly.

• LANDQUEST REALTY
• NIHO LAND & CATTLE
• MLS
• WATERFRONT WEST - WATERFRONT/VIEW PROPERTY
• COLLIERS UNIQUE PROPERTIES
• Homebase Recreational Property Search
• BC FARM & RANCH
• BRIDGE RIVER VALLEY REAL ESTATE
• OKHOMESELLER - OKANAGAN SHUSWAP PROPERTY
• BC PRIVATE ISLANDS
• BC ISLANDS & OCEANFRONT
• CASCADIA PACIFIC
• WORLDWIDE REFERRALS
• LOOPNET - COMMERCIAL REAL ESTATE & LAND
• ROSSLAND PROPERTY
• BC4SALE - FSBO
• PROPERTY GUYS - FSBO
• BCHOMESFORSALE - FSBO
• COMFREE - FSBO
• PRINCETON PROPERTIES - REMAX

Here is a growing compilation of links to credible taxation sources which explain many issues that financially affect both property & business owners. A focus has been made on the recreational real estate market.

• Property Transfer Tax - Recreational property buyers must understand know...
• What the HST means for Home Buyers
• Facts about the HST (Source BC Gov.)
• HST Exemptions and Rebates
• BC Assessment - Understand your Property Taxes
• Farmland Extension Program on Property Taxes
• Land Developers - Subdivision & Development Costs & Carrying Charges on Land

Disclaimer: The above information and links are provided to give you a base understanding of the tax implication involved in buying selling and owning recreational property. Although the sources are accurate and credible it is recommended that a real estate accountant be consulted to verify and understand further as taxation laws change frequently and are affected by the individual circumstance.

Here you will find links to all the Regional Districts across the province, where they have community plans, zoning/land use maps, subdivision procedures and much more to help you research prime recreational property outside of municipal Districts. Not interested in surfing the net for what you want call them directly and get the info you want (phone numbers provided).

• Alberni - Clayoquot Van. Isle Oceanfront / Lakes (Tofino, Ucluelet) (250) 720.2700 • Bulkley - Nechako Prime Northern Lakes District / Interior Plateau (Burns, Francois & Stuart Lake) (250) 692.3195 • Capital Southern Gulf Islands / Southern Van Isles (250) 360.3000 • Cariboo Prime Lake / Ranch Country (250) 392.3351 • Central Coast Prime Northern Oceanfront & Islands / Coastal Mtn Range (Bella Coola) (250) 799.5291 • Central Fraser Valley Prime Equestrian / Farmland (604) 853.1368 • Central Kootenay Kootenay & Arrow Lakes / Purcell & Monashee Mtns (250) 352.6665 • Central Okanagan Okanagan Lake / Vineyards / Fruit Farms (250) 763.4918 • Columbia Shuswap Shuswap Lakes / Purcell & Selkirk Mtns (250) 832.8194 • Comox Valley - Strathcona Mount Washington / Northern Gulf Isles (250) 334.4452 • Cowichan Valley Cowichan & Shawnigan Lake (250) 746.2500 • Dewdney Alouette Pitt & Stave Lake / Golden Ears Park (604).826.1291 • East Kootenay Rocky Mountains / Columbia River (Fernie, Panorama, Kimberley) (250) 489.2791 • Fort Nelson - Liard (PDF) Northern Rockies / "Serengeti of the North" (250) 774.2541 • Fraser - Cheam Harrison Lake / Sunshine Valley / Fraser River (604) 792.0061

• Fraser - Fort George Prime Ranch Country / Rocky Mountains (250) 563.9226 • Greater Vancouver Metro Area / Lifestyle & Golf Communities / Bowen Island (604) 432.6200 • Kitimat - Stikine Northern Island & Coast / Coast Mountains (250) 635.7251 • Kootenay Boundary Fruit Farms / Vineyards / Christina Lake / Monashee Mountains (250) 368.9148 • Mount Waddington Northern Van Isle / Northern Gulf Isles (250) 956.3161 • Nanaimo East Van Isle / Seaside Lifestyle Communities (250) 390.4111 North Okanagan Mable Lake / Silverstar Resort / Prime Fruit & Vineyard Land (250) 545.5368 • Okanagan - Similkameen Prime Fruit Farms & Vineyard / Okanagan Lake / Manning Park / Similkameen River (250) 492.0237 • Peace River Northern Rocky Mountains / Williston Lake (250) 782.5891 • Powell River Texada Island / Desolution Sound / Coast Mountains (250) 483.3231 • Skeena - Queen Charlotte Gwaii Haanas Park Reserve / Sport Fishing (250) 624.2002 • Squamish - Lillooet Mt Garibaldi Park / Coast Mountains / Gun Lake (604) 894.6371 • Sunshine Coast Gibsons / Pender Harbour / Sechelt (250) 885.2261 • Thompson - Nicola Thompson River & Plateau / Sun Peaks / Prime Ranch Country (250) 372.9336

BC Real Estate Association Stats - March 2011.