Buying a presale, a home that hasn’t been built yet, means signing today for a home you’ll get keys to in two, three or more years, at today’s price. It can be a good way into a new home, and it has rules and risks that a resale purchase doesn’t. Here’s how presales work in British Columbia, from the official sources.
The law that protects you: REDMA
Most presales in BC are governed by the Real Estate Development Marketing Act, which BCFSA, the province’s real estate regulator, enforces. Not every new home is covered, so ask whether yours is. Under the Act, a developer must have the required approvals before marketing, and must give every buyer a disclosure statement before they sign.
The disclosure statement
The disclosure statement must set out all material facts about the development. It typically covers the developer, the land, the building, the budget for strata fees, the construction and completion timeline, how deposits are held, and your rights to cancel. You must confirm in writing that you’ve read it, or had the chance to, before the contract is signed. If a material fact changes, the developer files an amendment and must give it to you. Read the whole thing, including the parking, storage and assignment provisions, ideally with a lawyer.
Your 7-day right to cancel
You can cancel a REDMA presale contract by written notice within seven days after the later of the day you signed it or the day the developer received your written acknowledgement of the disclosure statement. Your deposit is then returned. This is the presale version of a cooling-off period; BC’s 3-day home buyer rescission period doesn’t apply to presales. If you were entitled to a disclosure statement or an amendment and didn’t receive it, you may have further rights to cancel.
Your deposit
Under REDMA, deposits must be held in trust by a lawyer, notary or real estate brokerage. They can only be released in the circumstances the Act allows, usually to the developer once the building has its occupancy approvals, the strata plan is deposited and your purchase is registered. In limited circumstances the Act lets a developer use deposits earlier, so check the disclosure statement for how yours is protected. Deposits are usually paid in stages; the contract sets the amounts and dates.
Assignments
Under REDMA, a presale contract can’t be assigned to another buyer without the developer’s consent, unless the developer has chosen otherwise. When an assignment is allowed, the developer must collect the identity and contact information of both parties and the terms of the assignment. That information goes to the Province’s Condo and Strata Assignment Integrity Register and is shared with the Canada Revenue Agency. Developers often charge a fee to consent.
Profit on an assignment can be caught by both the federal residential property flipping rule and BC’s home flipping tax, and the BC tax’s $20,000 deduction for a home doesn’t apply. See BC’s home flipping tax, explained.
Taxes and programs that apply to new homes
- GST. New homes are subject to GST. First-time buyers may qualify for the federal first-time home buyers’ GST rebate, which removes the GST on new homes up to $1,000,000 and phases out by $1,500,000, for agreements signed on or after March 20, 2025 and before 2031. Check whether the price includes GST.
- Property transfer tax. BC’s newly built home exemption can remove the tax on new homes up to $1,100,000, with a partial exemption up to $1,150,000, if you’ll live there.
- 30-year mortgages. Insured mortgages on newly built homes can be amortized over 30 years.
The details are in Every first-time buyer program in BC, in one place.
Risks to plan for
- Financing at completion. A pre-approval rarely lasts until completion. Your lender will approve the mortgage close to completion, at the rates and rules then in force, and will appraise the home at its value then. If values have fallen, you may need more cash to complete.
- Delays. Construction can run late. Read the estimated and outside completion dates in the contract, and what happens if they’re missed.
- Changes. Contracts usually let the developer make some changes to layouts, finishes and sizes. Check the limits.
- Strata fees. The fees in the disclosure statement are an estimated first-year budget; they can rise once the owners take over.
- Selling before completion. If your plans change, an assignment needs the developer’s consent and may be taxed as above.
At completion
Before you complete, you’ll do a walkthrough to note deficiencies for the builder to fix. New homes built by licensed builders come with home warranty insurance: at least 2 years on labour and materials, 5 on the building envelope and 10 on structure. Check the policy on BC Housing’s New Homes Registry, and know how to make a claim.
Questions people ask
Can I negotiate on a presale?
Sometimes. Depending on the market and the project, price, deposit structure, parking or upgrades may be negotiable. Ask.
Should I use my own REALTOR®?
The developer’s sales team works for the developer. Your own REALTOR® and lawyer work for you: comparing the project with the resale market, reading the disclosure statement and contract, and representing you at completion.
Can I cancel after the seven days?
Generally not, unless you weren’t given a disclosure statement or amendment you were entitled to. Otherwise, walking away usually means losing your deposit.
General information for buyers in British Columbia, current as of publication. It’s not legal, tax or investment advice. Every presale contract is different; have yours reviewed by a lawyer before the 7-day period ends.