What is the difference between a home appraisal and a home inspection?
- What is the difference between a home appraisal and a home inspection?
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In Canada, a home appraisal and a home inspection serve different purposes when buying a home:
- Home Appraisal: This is an assessment of a property’s market value, usually required by a lender to secure financing. A licensed appraiser evaluates the home’s size, condition, location, and recent sales of comparable properties to determine its fair market value. The goal is to ensure the home is worth the amount being loaned.
- Home Inspection: This is a thorough examination of a property’s physical condition, typically requested by the buyer. A certified home inspector checks for structural issues, safety concerns, and potential repairs in areas like the foundation, roof, plumbing, electrical systems, and HVAC. The goal is to inform the buyer about the home’s condition before finalizing the purchase.
- 1% on the first $200,000 of the property’s FMV
- 2% on the portion of the FMV between $200,000 and $2,000,000
- 3% on the portion of the FMV between $2,000,000 and $3,000,000
- 5% on the portion of the FMV exceeding $3,000,000
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Exemptions from the PTT are available under certain conditions:- First-Time Home Buyers’ Program: This program offers a full or partial exemption to qualifying first-time homebuyers. To be eligible, the purchaser must be a Canadian citizen or permanent resident, have never owned a principal residence anywhere in the world, and have lived in British Columbia for at least 12 consecutive months immediately before the date of registration, or have filed at least two income tax returns as a British Columbia resident in the last six years. The property must be used as the principal residence, have a FMV of $500,000 or less for a full exemption (with a partial exemption available for properties valued between $500,000 and $525,000), and be 0.5 hectares (1.24 acres) or smaller.
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- Newly Built Home Exemption: This exemption applies to newly built homes, including newly subdivided units, substantially renovated homes, and certain other properties. To qualify, the purchaser must be a Canadian citizen or permanent resident, and the property must be used as the principal residence, have a FMV of $750,000 or less for a full exemption (with a partial exemption available for properties valued between $750,000 and $800,000), and be 0.5 hectares (1.24 acres) or smaller.
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- Additional Transfer Tax Exemption: In certain circumstances, such as transfers between related individuals, transfers resulting from marriage breakdowns, or transfers to registered charities, an exemption from the additional transfer tax may be available.
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It’s important to note that these exemptions have specific eligibility criteria and application processes. Prospective homebuyers should consult the official British Columbia government resources or seek legal advice to determine their eligibility and ensure compliance with all requirements.