Purchasing in Whistler
In addition to general purchase
considerations, there are additional issues
you should consider when purchasing property in Whistler.
Tourism Whistler- these are quarterly fees
that must be paid to Tourism Whistler.
- Calculated based on the
number of bed units (one bedroom equaling two bed units)
present in the accommodation on the property.
- If the purchaser does
not wish to rent out the property more than 14 days of the
year, the purchaser may file a Declaration to this effect
with Tourism Whistler in order to reduce these fees.
- Automatic withdrawal of
fees can be arranged by calling Tourism Whistler at (604)
Phase One Covenants
If the property is subject to a Phase One covenant then it
must be available for rental through a bonafide property manager
when not being utilized for personal use.
Phase Two Covenants
If the property is subject to a Phase Two covenant, personal
use of the property is restricted to 28 days in the summer
and 28 days in the winter. The covenant defines how these
periods of personal use may be booked and states whether additional
days may be booked by booking 15-30 days in advance, subject
to availability. When not in personal use, the property must
be available for rental through a property manager.
In order to make purchase of recreational property more affordable,
some developers are now offering freehold ownership of quarter
interests in property to the public. Under this form of strata
title ownership the owner has registered title to a one-quarter
interest in the property (usually a condominium or town house).
the Property Purchase
Purchases may be structured in several ways. Each method has
a different effect on taxation of the purchaser, so accounting
advice is helpful in determining which method is best for
Purchase through a corporation- Corporate
versus personal purchase is usually a tax driven question,
so accounting advice is very important. The purchaser must
consider the drawbacks to corporate purchase, including the
- Depending on the marginal
tax rate of an individual, the tax rate on income derived
from property may be higher for a corporation.
- The capital gains tax
rate of a corporation may be higher than that of an individual.
- Incorporating a company
for the purposes of purchases property will cost approximately
$1,000 plus additional costs, including corporate records
maintenance and accounting costs.
- Incorporating a British
Columbia company requires that there be a majority of directors
resident in Canada and at least one director resident in
- If the corporation is
not a British Columbia Corporation, a mortgage lender may
require that the company be registered in British Columbia,
which will incur legal expenses as set out above.
- If a corporation is not
required to register provincially in British Columbia before
completing a transaction, a Certificate of Good Standing
will be required from the incorporating jurisdiction, along
with an opinion letter from a solicitor in the incorporating
jurisdiction, in order to get mortgage financing in British
- A corporation which purchases
property must be maintained as long as the property is owned
by the corporation.
- Even though the property
will be owned by a company, the mortgage lender will generally
require personal guarantees from the principals of the corporation.
- If there are losses from
the property, those losses cannot offset personal income
Some of the advantages of purchase through a corporation include:
- If the principals of the
company die, there is no change of ownership of the property,
which means that no probate fees will be incurred on the
property, only on the change in ownership of the shares.
If the shares of the company are held outside of British
Columbia they will be exempt from the probate fees imposed
in conjunction with a change of ownership of the shares.
- If the company's only
asset is the property, sale of the property may be effected
through sale of the shares of the company, avoiding payment
of the Property Transfer Tax and the Goods and Services
Limited Liability Corporations
In order to register a property in the name of a limited liability
corporation (LLC) without extraprovincial registration of
the LLC, the Land Title office will need a copy of the constating
documents of the company showing that the LLC is empowered
to hold real estate. If the LLC is not empowered to hold real
estate it may be possible to change the LLC constating documents
to allow it to do so.
Buying in the Name of a Trust
Buying in the name of
a trust (frequently a family trust) avoids payment of probate
or succession fees upon the death of the owner of the property.
If the purchase is going
to be made in the name of the trust, the Land Title Office
will require that the original trust document be filed with
the Land Title Office. This makes the trust document available
to the public, giving out considerable information about
the beneficiaries and assets of the trust.
Instead of buying through
a trust to avoid probate and succession fees, the purchaser
may want to consider holding the property in joint tenancy.
This means that more than one person's name is on the title,
and when one title-holder dies, the title passes automatically
to the other joint tenant.
If mortgage financing
is necessary, purchasing in the name of a trust may become
more complex. The mortgage institution may not be willing
to lend to a trust, and a solicitor's opinion letter as
to the trust's ability to enter into mortgage agreements
may be necessary.
Using this checklist may help you organize your purchase.
Canadian bank account and arranged automatic withdrawal
of required payments.
for unit and bills with property manager.
Applied to BC Hydro to
have hydro bill issued in your name (even if the bill
will be handled by the property manager). Call 1-800-224-9376
for BC Hydro.
Strata Corporation Maintenance
Fees- arranged for payment of monthly fees with property
manager or for automatic debit from bank account.
Tourism Whistler Fees-
contacted Tourism Whistler for fee rate and arranged for
quarterly payment either with property manager or automatic
debit from bank account- call (604) 932-3928.
Property Taxes- determined
whether vendor has already paid yearly amount or whether
an amount will be owing on July 2nd and obtained grant
form if applicable (604) 932-5355.
Mortgage payments- set
up automatic debit of payments with lender.
Tax - contacted property manager or accountant for completion
of Form NR6 to reduce withholding tax.
Tax returns- arranged
for filing of annual Canadian tax returns with respect
to the property- returns for the year ending December
31 are due April 30 of the next year.
HST returns- confirm
with property manager that HST is being collected and
remitted. Confirm tax advice and filing to reduce HST
remittances and expenses.
Insurance- confirm what
insurance coverage exists and what is necessary. If the
property is under strata title liability and contents
insurance will be necessary and property insurance will
generally be obtained by the Strata Corporation.
Booking Personal Use-
reviewed terms of rental agreements to determine notice
requirements for booking and booked desired dates
Canada Customs- contacted
Canada Customs with regard to bringing furnishings into
Canada and determined what documentation is necessary.
Telus to set up phone and/or internet connection at 1-888-811-2323.
Cable Television- contact
Whistler Cable at (604) 932-1111.
Corporate Foreign Exchange Trader
Western Union Business Solutions
3224 - 1055 Dunsmuir Street - Bentall IV
Vancouver, British Columbia V7X 1P4
Phone: 604-482-6000 (Direct- Dealing Desk)
> New Zealand > United
Non- Resident Sellers
In order for a non-resident
seller to transfer property, the seller must obtain a Clearance
Certificate from Canada Customs and Revenue Agency.
Obtaining the Certificate
currently takes 10-12 weeks, so allow ample time for receipt
of the Certificate prior to the completion date of the sale.
If the seller does not
obtain a Certificate prior to the completion date, the purchaser's
solicitor will be required to keep a holdback of between
25% and 50% of the purchase price until the Certificate
Prior to issuing the Certificate
CCRA will want to collect any tax payable on the property.
Tax payable will include
tax on rental income which has not yet been remitted, tax
on the capital gain experienced on the property and any
recapture of capital cost allowance. We recommend that you
contact an accountant to deal with these issues.
Tax on Rental Income
Canada Customs and Revenue
Agency (CCRA) requires non-residents to pay 25% of the gross
rental income from the property to CCRA.
The 25% amount may be
reduced by filing a Form NR6 return, which sets out the
projected rental income and the expenses associated with
the property. A property manager may be able to help you
fill out this return.
Upon filing an NR6 return,
the property holder will be required to file an annual tax
return with respect to the property. CCRA will only allow
expenses to offset the rental income if the returns are
filed. Expenses incurred more than two years before the
filing of a return will be disallowed. Therefore it is important
to keep filings current.
- If you intend to furnish
your property with items from a home outside Canada it is
important to contact Canada Customs in order to find out
what their requirements are with respect to avoiding duties
on these items.
- Generally, you are permitted
one shipment of used personal effects to a recreational
residence without being required to pay duty.
- You will be required to
show a Form A Transfer form to prove that the items are
being brought in to furnish your property. A copy of the
form can be obtained from your lawyer.
Annual Tax Returns
- CCRA requires a property
holder to file a tax return with respect to all income produced
from the property.
- CCRA will only allow expenses
from the past two years to offset income from property,
so it is important to keep filings current.
Receipts for Furnishings
- If you are purchasing
furnishings for your property and intend for those furnishings
to be sold with the property, it is important to retain
receipts for the furnishings and show evidence that the
furnishings are staying with the property.
- This evidence should include
documentation from Canada Customs if the furnishings were
brought across the border, or invoices showing delivery
of the items to the Whistler address if they were purchased
somewhere other than Whistler.
- If receipts and other
evidence are not retained, CCRA will disallow the deduction
of the cost of the furnishings from the sale of the property,
increasing the tax payable on a transfer of the property.
The right of survivorship associated with joint tenancy may
be used as an estate planning tool to avoid probate fees.
The passing of joint property circumvents the deceased’s
estate and is not subject to probate. Accordingly, some elderly
purchasers may choose to register property jointly with their
children. Couples would also usually register title jointly.
For non-residents of B.C.,
the same theory of joint tenancy applies. In addition, however,
the non-resident must plan to avoid the possibility of their
aggregate world wide net worth being subject to B.C. probate
fees. This can be done by holding the property in a corporation,
or it can be done by making B.C. wills, limited to assets
in B.C. only. For non-residents other than residents of the
United States, this is a common planning tool.
Many United States Residents
have estate planning trusts and LLC’s. As title generally
may not be held directly in such entities, the solution is
to hold the title in the name of a B.C. corporation or individual
and have an unregistered trust agreement in favour of the
Any estate planning and title
decisions should be made with the assistance of the purchasers’
advisors in their home jurisdiction.
All purchasers of property
in B.C., other than corporations, should consider granting
their spouse or some other trustworthy individual a Power
of Attorney in B.C. Land Title format. This would allow for
a sale or mortgage of the property in the event of a loss
of mental capacity. Without a Power of Attorney in place,
it takes an expensive court application for someone to be
appointed to represent the incapacitated individual. Joint
tenancy of property is not like a joint bank account, both
parties must sign transfer documentation.
- Mortgages in British Columbia
may differ from those available in the USA in several important
- Mortgages in British Columbia
most commonly have a fixed term of between 6 months and
5 years. At the end of a mortgage term, the interest rate
- Mortgages which float
with the Canadian prime rate are also available.
- Both fixed and variable
rate mortgages generally allow limited pre-payments per
year. The amount of the annual pre-payment will vary depending
on the mortgage lender but is generally between 10% and
20% per year.
- If your mortgage is not
an open mortgage then if you wish to re-pay more than the
annual pre-payment amount set out above, you will generally
pay a penalty to the lender. The penalties are usually 3
months interest or the interest rate differential, whichever
Chronology of Execution of Mortgage
- The borrower signs a commitment
letter with the lender.
- The lender instructs a
lawyer or notary to draw the mortgage security.
- The documents are couriered
or emailed to the borrower for execution in the presence
of a notary public.
- The Land Title Office
will not always accept faxed documents, so sufficient time
must be allowed for the borrower to receive, execute and
courier the documents back to Vancouver for filing in the
Vancouver Land Title Office on the completion date.
The balance of the property
purchase price must be paid in Canadian Funds by certified
cheque or bank draft.
Exchange rates fluctuate,
and lending institutions in the U.S. and Canada may offer
different exchange rates or offer different exchange rates
for buying and selling Canadian dollars, or offer different
rates depending on the dollar amount involved. The exchange
rate of the transaction should be settled prior to the actual
We utilize the services
of Custom House Currency Exchange (www.customhouse.com
1-800-350-6001). In our experience, they provide prompt
wiring service from your U.S. account as well as competitive
It is possible to wire
funds directly to your solicitor's trust account, but you
should allow sufficient time for the funds to actually appear
in the trust account and thus be available for the closing.
It is recommended that
the purchaser open a bank account in Canada in order to
facilitate payment (in Canadian funds) of ongoing expenses
and to receive revenue from rental of the property.
Time is of the essence!
- Completing the purchase
transaction on the designated completion date is critical
in British Columbia.
- If the transaction is
not completed on the designated date, the vendor of the
property has the option to cancel the contract of Purchase
and Sale and is entitled to retain the deposit paid by the
- It is not uncommon for
vendors who wish to continue with the transaction to demand
interest or additional charges for extensions for late completion.