Selling in the Lower Mainland and Buying Elsewhere in BC

Selling in Metro Vancouver or the Fraser Valley and buying on Vancouver Island, in the Okanagan, in the Interior or on the Sunshine Coast means working in two markets at once, and with a plan they fit together well. Here is how to order the sale and purchase, work with an agent in each place, what can differ outside the cities, the taxes on each side and how to time the move.

The short version

Sell first, buy first or both at once

The order you choose decides how much risk you carry. I compare the options in Buying and Selling at the Same Time; across two regions, they look like this:

• Sell first. You know your budget and won't carry two homes, but you may need a place to stay in between.
• Buy first. You secure the new home, but if it completes before your sale, you need money in between. Bridge financing is a short-term loan for that gap; lenders generally want a sale agreement on your current home, usually a firm one, and the rate is often higher than on a regular mortgage.
• Both at once. You can make your offer subject to the sale of your home. The seller may ask for a time clause: if they receive another offer they like, you have a set time to remove your subjects, or your contract ends.

Completion (when ownership transfers) and possession (when you get the keys) are set in each contract and needn't fall on the same day, so you can line both up with time for the move.

An agent in each market

I handle your sale in the Lower Mainland and can introduce you to a licensed agent who works where you're buying. Agents across BC are licensed by the BC Financial Services Authority (BCFSA), whose online register shows an agent's licence category, any conditions and recent discipline history.

• Referral fees go through brokerages. BCFSA says a referral fee paid to an agent must go through the brokerage they're licensed with, never to the agent directly.
• You're told in writing. If I receive a referral fee from anyone other than you, BCFSA requires me to disclose it to you in writing, with the source and the amount, or the likely amount if it isn't known yet. An agent who pays one must disclose it to their client too.

Local knowledge matters: ask the local agent how long they've worked there, how the market moves through the year and which inspections buyers usually make offers subject to.

What can be different outside the cities

If the home isn't inside a municipality (a city, town, district or village), it's in a rural area, and a few things work differently:

• Regional districts. BC's 27 regional districts are divided into mostly rural electoral areas, where the regional district handles zoning and some services, such as water and fire protection. Public roads there are the Province's, so ask who maintains any private road.
• Fire protection. Some rural properties aren't in a fire protection area, and the Regional District of Nanaimo notes that this can affect insurance rates and response times. Ask the regional district and your insurer early, and see Wildfire Risk and Your Home in BC.
• Wells. If a well serves just your home, you're responsible for testing the water. HealthLink BC recommends a bacteria test at least once a year, by a qualified lab.
• Septic. Owners must carry out the system's maintenance plan using an authorized person, such as a registered onsite wastewater practitioner. HealthLink BC says tanks usually need pumping every 2 to 5 years, so ask for the plan, the as-constructed drawing and pumping records.
• Farmland. The Agricultural Land Reserve (ALR) is a provincial zone where agriculture is the priority use and non-farm uses are restricted. The Agricultural Land Commission's online finder shows whether a parcel is in it.

I cover wells, septic and the ALR in Buying an Acreage in the Fraser Valley.

Taxes and costs when you buy

• Property transfer tax. You pay it when your purchase is registered at the Land Title Office, on the fair market value: 1% of the first $200,000, 2% up to $2,000,000 and 3% above that, plus a further 2% on residential value over $3,000,000. On an example $800,000 purchase, that's $14,000.
• Exemptions. If you've ever owned a home that was your principal residence, the first-time buyers' exemption won't apply. A newly built home can qualify for its own exemption, in full up to a fair market value of $1,100,000 on 0.5 hectares (1.24 acres) or less, and in part below $1,150,000, if you're a Canadian citizen or permanent resident and move in within 92 days as your principal residence.
• Speculation and vacancy tax. It applies only in listed taxable areas, including Kelowna, West Kelowna, Penticton, Vernon, Kamloops, Nanaimo, Courtenay, Squamish and much of Greater Victoria, but not Gibsons or Sechelt, for example. Owners of residential property there declare every year, even when exempt, as most people living in their homes are; see BC's Speculation and Vacancy Tax.
• Home owner grant. You apply every year, and only one grant can be claimed for a property each year. If you buy partway through a year, you can claim it on the new home only if the previous owner didn't and you didn't receive it for another property that year. In a rural area, you pay property tax to the Province, whose Surveyor of Taxes sends the notice each June; see the home owner grant and deferment.

Taxes and costs when you sell

For the full list of selling costs, see What It Costs to Sell a Home in BC. Three tax points matter for this kind of move:

• Capital gains. If the home was your principal residence for every year you owned it, the gain is generally exempt, but the Canada Revenue Agency (CRA) requires you to report the sale and the designation on Schedule 3 and Form T2091. In a year when you sell one home and buy another, the "one plus" in CRA's formula has the effect of treating both as your principal residence for that year; see Capital Gains and Your Home.
• Home flipping tax. If you sell within two years of buying, BC's home flipping tax may apply unless an exemption fits.
• Moving for work. If you're moving to work or run a business in the new area and your new home is at least 40 km closer to it, CRA may let you deduct moving expenses, including the commission and legal fees on your sale and, if you sold because of the move, the legal fees and title transfer taxes on your purchase.

Timing the move

• Mountain passes. Winter tires or chains are required on most BC routes from October 1 to April 30; on some routes that don't cross mountain passes or high-snowfall areas, the requirement ends March 31. Book movers with the season in mind, and check DriveBC before you go.
• Ferries. If your move involves a ferry, BC Ferries treats vehicles over 7 feet high or 20 feet long as oversized, which can affect the fare and the deck you're placed on, and recommends booking ahead.
• Your address. The Province's online Change of Address Service updates ICBC and Health Insurance BC together, and the Medicare Protection Act requires you to report a move to Health Insurance BC within 10 days. Elections BC lets you update your voter registration online or by phone.

Questions buyers and sellers often ask me

Should I sell my Lower Mainland home before I buy elsewhere in BC?

It depends on how much risk you're comfortable carrying. Selling first tells you your budget but may mean a stay between homes; buying first secures the new home but can mean bridge financing. An offer subject to the sale of your home sits in between.

Can you help me buy in another part of BC?

I handle the sale here and can introduce you to a licensed agent who knows the area where you're buying. If a referral fee is paid, it goes between our brokerages, and BCFSA requires it to be disclosed to you in writing.

Do I pay property transfer tax again on my next home?

Yes. It applies to each purchase registered at the Land Title Office, at the same general rates anywhere in BC. The first-time buyers' exemption won't apply if you've owned a home that was your principal residence, but a newly built home may qualify for its own.

Will I owe tax when I sell my home?

Usually not, if it was your principal residence for every year you owned it. You still report the sale and the designation on your tax return, using Schedule 3 and Form T2091. An accountant can confirm how the rules apply to you.

What should I check before buying a rural property?

Ask whether it's inside a fire protection area, who maintains the road and whether it's in the Agricultural Land Reserve. For a well, ask for recent water tests; for a septic system, the maintenance plan and pumping records.

Planning the move? Use my moving day checklist, and if family are joining you from outside BC, see Moving to BC From Another Province.

This article is general information, not legal, tax or financial advice. The details come from BCFSA, the Province of BC, the Canada Revenue Agency, HealthLink BC, the Agricultural Land Commission, the Regional District of Nanaimo, BC Ferries and Elections BC, and were current at the time of writing; tax rules and taxable areas can change, so confirm the details with your lawyer or notary, accountant and lender. For the rates and exemptions, see the Province's property transfer tax page.