What is a Subject to Sale Offer?

A subject to sale offer allows a buyer to purchase a property on the condition that they first sell their existing home. This prevents them from being financially overextended or left without a place to live.

Example of a Subject to Sale Offer

Consider a homeowner looking to upgrade to a larger home. They are concerned about selling first and not finding a new home in time. To mitigate this risk, they include a subject to sale clause in their offer, making their purchase conditional on selling their current home.

Pros and Cons

Pros

• Provides security, ensuring you don’t sell without securing a new home.

Cons

1. Higher Purchase Price & Lower Selling Price: Sellers may be less flexible on price, and buyers under pressure to sell may accept lower offers.

2. Bump Clause Risk: If another buyer submits an offer without this condition, you may have 24-72 hours to waive your conditions, potentially losing the home.

3. Financial Costs: Home inspections and appraisals are most likely non-refundable if the deal falls through.

Key Considerations

• Your home must be ready to list immediately after your offer is accepted, time is very much of the essence.

• Many sellers require a tight deadline for your sale.

• Have a backup plan (temporary housing rental, staying with family or friends) in case your home sells first.

A Better Approach?

Many buyers list their home first and wait for an accepted offer before making an offer on a new home. This strengthens their position, improves negotiations, and reduces financial risks.

Final Thoughts

Preparation is key to making the buying and selling process smooth. Understand the pros and cons, plan ahead, and consult  with us to make the best decision for your situation.

Looking for more details? Check out our podcast https://www.youtube.com/watch?v=vkm_oN2isTI&t=2s

Buying a first home is a major financial step, and government programs are available to help ease the burden for new buyers in Canada. Understanding these programs can make homeownership more affordable and accessible.

Property Transfer Tax Exemptions for First-Time Buyers

The First-Time Home Buyers' Program in British Columbia helps reduce or eliminate the property transfer tax when purchasing a first home. Eligible buyers may qualify for a full or partial exemption, potentially saving thousands of dollars.

To qualify, a buyer must:

• Be a Canadian citizen or permanent resident

• Have lived in B.C. for at least one year before registering the property or have filed two B.C. income tax returns in the last six years

• Have never owned a property used as a principal residence anywhere in the world

• Have never received a first-time home buyer exemption or refund

The property must also:

• Be used only as a principal residence

• Have a fair market value of $835,000 or less (effective April 1, 2024)

• Be 0.5 hectares (1.24 acres) or smaller

• Contain only residential improvements

How Much Can a First-Time Buyer Save?

If all requirements are met, the buyer is exempt from property transfer tax on the first $500,000 of the home’s value. A partial exemption applies to homes valued between $835,000 and $860,000, as well as properties that exceed size limits or have additional buildings.

New 30-Year Amortization for First-Time Buyers of New Builds

To further support first-time homebuyers, the federal government has announced a 30-year amortization period for insured mortgages on newly built homes, effective August 1, 2024.

This change is designed to:

• Lower monthly mortgage payments

• Improve affordability for younger buyers

• Encourage new housing construction

This initiative is part of the Canadian Mortgage Charter, which aims to make homeownership more accessible while also protecting mortgage holders facing financial difficulties. It builds on other programs, such as the Tax-Free First Home Savings Account, which has already helped more than 750,000 Canadians save for a down payment.

Conclusion

With rising housing costs, these programs provide first-time buyers with critical financial relief. Understanding available tax exemptions and mortgage options can make homeownership a more achievable goal. Those considering purchasing a first home should consult with a real estate or financial expert to determine their eligibility and explore the best path forward.

Some details provided by : https://www.canada.ca/en/department-finance/news/2024/07/government-announces-30-year-amortizations-for-insured-mortgages-to-put-homeownership-in-reach-for-millennials-and-gen-z.html 

https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/first-time-home-buyers

As we move through 2024, it’s important to stay on top of key tax deadlines to avoid penalties and maximize tax planning opportunities. Here are the crucial dates you should keep in mind for the year.

Key Deadlines for Q1 2024

February 28

• Proposed extended deadline to make charitable donations for the 2024 tax year (pending approval).

• Deadline for corporations with a December 31 year-end to pay the balance of income tax due (for Canadian-Controlled Private Corporations meeting specific criteria, the balance is due three months after year-end).

• Deadline to issue T4, T4A, T5, RL-1, RL-2, and RL-3 income tax slips.

March 1

• Deadline to contribute to your RRSP to claim a deduction for the 2024 tax year, including Home Buyers’ Plan/Lifelong Learning Plan repayments.

• The 2024 RRSP limit is $31,560.

March 15

• First quarterly personal income tax installment is due.

March 31

• Deadline to file most trust income tax returns.

• Deadline to issue most T3, RL-16, NR4, and T5013/RL-15 income tax slips.

• Deadline to file most partnership income tax returns.

Key Deadlines for Q2 2024

April 15

• Deadline to file 2024 U.S. individual income tax returns or request a six-month extension and pay any tax due.

• Deadline to file 2024 U.S. Report of Foreign Bank and Financial Accounts (FBAR) (FinCEN Form 114) for U.S. persons (automatic six-month extension applies).

April 30

• Deadline to file personal income tax returns for most individuals and pay any balance due for 2024.

• Deadline for residential property owners affected by the Underused Housing Tax (UHT) to file returns and pay any tax owing.

June 15

• Second quarterly personal income tax installment is due.

• Deadline to file personal income tax returns for self-employed individuals and their spouses/common-law partners.

• Deadline to file GST/HST returns for self-employed individuals with a December 31 year-end.

• Deadline to file U.S. individual income tax returns for U.S. citizens or resident aliens residing abroad and U.S. non-residents with no withholding tax.

June 30

• Deadline to file corporate income tax returns for corporations with a December 31 year-end.

Key Deadlines for Q3 & Q4 2024

September 15

• Third quarterly personal income tax installment is due.

December 15

• Fourth quarterly personal income tax installment is due.

December 30

• Last trading day for tax-loss selling planning in 2024.

December 31

• Deadline to contribute to a First Home Savings Account (FHSA) to claim a deduction for the 2025 tax year.

• Deadline to make charitable donations for the 2025 tax year.

• Deadline for RESP and RDSP contributions to receive government grants.

• Deadline to contribute to your RRSP if you turn 71 in 2024.

• Deadline to convert your RRSP to a RRIF if you turn 71 in 2024.

• Deadline to close your FHSA if you turn 71 in 2024.

Final Thoughts

While these deadlines serve as general reminders, each taxpayer's situation is unique. It is always advisable to consult a tax professional to discuss your specific needs and ensure compliance with the latest tax regulations.

Stay organized and ahead of your tax obligations to maximize your financial opportunities in 2025!

Details provided by - https://www.scotiawealthmanagement.com/ca/en/resource-centre/scotiawealth-important-tax-dates.html