While Purchasing a Pre – Construction , You will be dealing with a Large company (Builder) with very strong Lawyers , There are so much definitions , Rules ,Legal expressions , Construction wordings , which are arranged by their own lawyers and the purchase and sale agreement is not in standard Form , which can be very complicated for a normal person to make sure what they are signing .
Make sure , your are using the correct Real Estate Agent and strong brokerage who have access to strong legal advice and have experience working with different builders and Are well familiar with the history and level of Builders Performance
The definition of a pre-construction property is that,you are purchasing un -completed . It is common for a presale to be sold before the permits are even received from the city, and move-in dates are typically 2-5 years away from when sales first start to the public. In this case the buyer would be purchasing directly from the developer/builder.
But resale property means that the property is already built and is in Move in Ready Condition . In this case, you are purchasing from a private owner
HIGHER PROPERTY TRANSFER TAX EXEMPTION THRESHOLD The property transfer tax exemption for newly built homes is a purchase price maximum of $750,000 – which is more than the $500,000 for eligible purchasers in resale. If you qualify for the exemption this will allow you to purchase at a higher amount but still avoid the property transfer tax.
No Mortgage Payment and no interest rates for the construction period
By purchasing a pre-construction condo, you’re not just getting a beautiful space; you’re getting the satisfaction of knowing that your property will be worth more when completed. By playing the long game, you’re saving money in a commercial-savvy way.
When you choose to buy pre-construction condos in Montreal, you are essentially able to create the home of your dreams. The property will be completely customized to your tastes, as you are able to select the floor plan, exposure, finishes, and so much more.
This one goes without saying; by purchasing a newly constructed condo, you can expect to spend very little on maintenance.
Unlike a resale, a pre-construction sale is subject to GST which is an additional 5% at completion. However, if you are planning on living in the property and meet all the requirements, you might be eligible for a GST rebate for properties under $400,000.
It is a well-known fact that the earlier you finalize your transaction with regards to a pre-construction condo, the more money you tend to save in the long run. However, there is a downside to this; the earlier you buy your condo, the longer you will have to wait for it to be completed. As such, if you’re looking to move immediately, pre-construction might not be the best option for you.
You can’t be certain whether the interest rates will rise significantly, if you’ll lose your job, or if the government will impose a new tax or mortgage rule that will affect your purchasing power. Buying a presale condo is risky because you cannot lock your mortgage in at the time of purchasing, and you’ll have to be confident that you can complete when the project is done. If you have job uncertainty or are thinking of switching jobs, careers or changing to employed for self, then a pre-construction condo is probably not the best option for you.
The deposit usually adds up to 15 to 25% of the purchase price by the time of occupancy, depending on the builder’s deposit structure. (whereas resale is usually 1 time deposit of 5% of the purchase price)
Nothing is guaranteed. A condo building usually takes several years to complete. There is always a chance that the builder won’t sell enough units to proceed with construction, or can’t finish construction for some other reason, so you don’t get your condo. If you need to sell your current home to purchase the presale, it can be hard to line up the dates perfectly as developers typically have rights to delay occupancy.
After finalizing your purchase of a pre-construction condo, you’re pretty much in for the long haul. While exceptions can be made, backing out can be a process that is both cumbersome and costing.
When buying a pre-construction condo, it is important to keep in mind that you will not see the final product until years after striking a deal. In other words, you will be unable to physically see the space before you buy it, potentially leading to an ominous sense of uncertainty.
When purchasing a pre-construction condo in Montreal, you are essentially making a transaction over an abstract concept that has yet to be fully realized or developed. When buying resale, what you see is what you get, and unwanted surprises are kept to a minimum.
With respect to resale, once your offer has been accepted, you won’t have to wait long to move in. Whereas buying a pre-construction condo entails waiting months or even years to move in, resale condos offer immediate occupancy.
The mortgage process with a resale property is a lot easier, because you know the current interest rates, your current income, and what your monthly payment will look like. If you’re pre-approved (which you should be when searching for homes), you can get your appraisal done and mortgage right away! When purchasing a resale you won’t have to worry about market shifts prior to closing.
A typical deposit for a resale property is 5% of the purchase price, and is due one time upon subject removal. This is a much smaller amount than presale deposit structures.
For resale properties you do not need to pay an additional 5% Goods & Services Tax (GST) at completion.
Because of the smaller deposit, most of our clients find that resales are more affordable. Additionally, because resales come in all ages (i.e. 1980s, 90s, 2000s+) they have a greater range of affordable options for all types of consumers. The lack of GST also makes this an affordable option.
From the moment you close the deal, your resale condo is yours to do with as you please (as long as you follow the building regulations, of course). You can move in, rent it out, or even resell the property.
As mentioned, when you purchase a pre-construction condo, you are able to customize everything, down to the teeniest, tiniest detail. However, with regards to resale, you will only be able to choose what’s available on the market. As such, barring renovations that you must carry out yourself, you will not be able to make changes. Once again, what you see is what you get.
The property transfer tax exemption for eligible Canadian citizens/permanent residents is for a purchase price maximum of $500,000. (the PTT exemption for newly built homes for eligible purchasers is $750,000)
In the case of pre-construction condos, you have months or even years to save for your down-payment. However, resale condos require a down-payment upfront, meaning that you have less time to save and invest.
Whereas pre-construction condos in Montreal will be shiny and new once developed, resale properties will lack that shiny “new condo glow”, and small renovations may be required to combat inevitable wear and tear.
