Building or buying a brand new home is an attractive prospect for many people. If you build your own home you have the opportunity to make it your dream house. Right from the beginning, you will get to choose the size, layout, materials used, and all of the other details that will make this house your dream home.
If you are buying a newly constructed home then you can feel a bit safer in your investment as newly built homes, from licensed builders, will come with different warranties (more on this below).
The Nanaimo real estate market looks set to grow over the coming years and it is a great place to build a new home. As a realtor in Nanaimo, focusing on land development and residential sales, I can help you with the process of new home construction in Nanaimo, BC.
There are many good reasons to buy a new home, and a lot of things to consider before making your decision. This guide will help you understand what to expect during this process of buying property in BC.
New Home Warranty
One of the main reasons that people build or buy new homes is for the peace of mind that comes with it. Older houses can often need a lot of repair and maintenance work and these costs can add up fairly quickly.
A new build offers more assurances to buyers that there will be no major issues in the foreseeable future, and if they are, they are often covered under warranty. If a home is built by a licensed builder then the home is insured against defect with a government-mandated warranty.
The minimum level of coverage on a new build warranty is 2 years coverage for labour and materials, 5 years for the building envelope and 10 years on the structure. Knowing that you have an insurance company to back your new home is fantastic and builders will often come and fix any issues for you to prevent claims against their warranty.
The caveat for this new build warranty is if you buy from an owner-builder, which are people who are not licensed with BC housing and they must also occupy the home for at least 1 year as it was technically built for personal use.
Owner-builders do not have to purchase a new home warranty policy, although some owner-builders will choose to buy one. If you are buying a property from an owner-builder this is a key consideration as if they haven’t purchased a warranty policy you would have to contact them directly to try and claim any damages on your new home.
When buying a newly built home you will often be viewing and buying the home before it has actually been completed. To avoid any surprises when you move into your new home you can have your realtor insert a clause that allows for a deficiency walkthrough.
Before you finally close on the property all parties involved will take a final walk through the finished home. This allows you to check for any defects or spot any finishes that you may not be happy with. These can be brought to the builder so they can be fixed before closing on the property.
Taxes For New Homes
New homes are exempt from provincial property transfer tax, which can end up being quite expensive depending on the home you are buying. A home that isn’t new that you buy for $600,000 would result in a $10,000 property transfer tax. New homes that are under $750,000, that are your principal residence and are under 1.25 acres are exempt from this tax.
While this sounds great at first, you can’t get too excited yet as you will end up paying higher taxes due to the 5% GST you are required to pay on a newly built home. This means a property valued at $600,000 will require a GST payment of $30,000.
Considerations When Buying Land In Nanaimo
There are several other considerations to make when buying a lot to build on which are covered in detail in our full blog post. Here is a summary of those considerations:
- Look Into Utilities
- Capitalizing On Local Opportunity
- Understanding The Area
- Consult A Builder
- Confirm Zoning Laws
- Prepare For Unforeseen Costs
- Consult A Land Planner
- Count On A Larger Down Payment
- Find A Nanaimo Real Estate Professional You Can Trust
How Much Does It Cost To Build A House In BC?
The final cost of a newly built home is extremely difficult to gauge as it relies on so many factors such as square footage, materials, labour costs, land price, and permits. An approximate cost for building a 3,000 square foot single-detached home in BC is between $525,000 to $975,000.
At the end of 2021, the average price for a single-family home is $992,000. This is the average price so you will find that this varies across the province based on location.
The best way to get an estimate for a newly built home is to speak to a professional. As this is an area that I specialize in, I would be happy to talk through the approximate costs and overall process. It can be intimidating to consider new home construction but by working with experienced professionals you will find it much easier to understand.
I would be glad to help guide you through this process further and help you find the ideal lot or new home construction to purchase in Nanaimo and the surrounding area. Please contact Jeff King Real Estate to learn more.