Some real estate investors choose to forego viewing active listings to find the perfect home and choose to locate the perfect piece of land with plans to build instead. If you’re looking to purchase land in British Columbia to build your dream home, you should know that this type of property comes with its own set of rules and lending restrictions. Whether you’ve found a lot you love here in the Shuswap, or in another gorgeous corner of the province, these are a few facts to know prior to starting out on the hunt for the picture-perfect parcel.
Depending on the property use, a typical down payment on a property with a residential dwelling is between 5% and 20%. Though it may come as a surprise, when it comes to purchasing land, you should expect to pay a down payment of between 25% and 50%, dependant again on the type of land that you are purchasing. A land mortgage is considered more risky to a financial institution, and thus requires a larger investment or starting equity from the client.
You will receive an annual property tax bill for land as you would with a residential home. The annual cost for these property taxes will be based on the value of the land, the size of the property, the number of lots and more. For more information on how property taxes are calculated, head over to BC Assessment's Tax Rates.
In addition to knowing which costs will be associated with your purchase, it’s important to know of any restrictions the property has or may have to face in the future. Here are some questions to ask, prior to making an offer on a piece of land:
- Are there any restrictive covenants in place on the title that would affect your ability to use the land as you wish?
- Do any easements exist on the property that would allow your potential neighbors, utility providers and other entities to affect any part of the land?
- Is the title clear on the property? If not, what is the plan for remediating any liens.
- Are services already established and provided to the land, such as trash and recycling pickup, high speed internet and telephone services or mail delivery?
- Do such issues as soil contamination cause a problem for the use of the land?
- How is the land zoned? Does the city foresee that changing?
- Does the land have a proven water source? Is there already a system for removing wastewater from the property? If you needed to put in a septic system, could you?
You may have additional questions about how to navigate the transaction of purchasing land; if so, please reach out any time. If you’re in the market for a great piece of land in the Shuswap and would like to have knowledgeable support in your investment, I’d love the opportunity to be your trusted REALTOR®
RE/MAX Shuswap Realty⠀