Determine the price
Determining the price of the house that we are going to acquire will depend on whether we have initial capital or not, on the indebtedness capacity of each one, on the tax advantages that the purchase of a house entails, or on whether we have another previous house that we are going to buy. to sell. The possibility of opening a home savings account can also be studied.
Borrowing capacity
You have to consider what percentage of the income you can allocate to the payment of the loan installments so as not to go into debt beyond our means. Analyze what is the amount for which you can borrow annually, which can be faced without problems. As a guideline, the loan installment should not exceed 35% of net income.
Normally the mortgage loan will cover around 80% of the appraised value of the home you want to buy. Take into account other expenses, in addition to the mortgage that, as the owner, I will have: taxes, the community of owners, reforms…Make use of an apartment search engine to help you get accurate information and make a better decision.
Tax advantages
Not all dwellings are going to enjoy preferential Tax Advantages of Rental Property treatment, but only the so-called main residence (it must meet the following requirements: it must be lived in for at least three consecutive years and it must be inhabited effectively and continuously for twelve months following its acquisition or completion of the works). When a first habitual residence is acquired, you can generally enjoy a deduction in the amount you pay in personal income tax, which will depend on the amounts you have paid for the purchase of the home, or the amounts you pay for the mortgage, either principal or interest. In the year of the acquisition, a deduction of 15% corresponds to the amount invested in the purchase.
If we already have a home and want to sell it
If what we plan is to sell our habitual residence to buy another one, we should not rush and plan the operation well to obtain the greatest advantages of the transaction.
When selling our old home, it is normal to obtain a profit. If we reinvest the money on time with the purchase of the new home and fulfilling a series of requirements, we will not have to pay taxes for this tax benefit.
Home savings account
These are bank deposits whose purpose is to plan the necessary savings for the purchase or rehabilitation of the first habitual residence. Among its drawbacks is that a term is set for the purchase of the home, usually four years after its opening, and that once fulfilled, the entire balance must be invested. However, it has the advantage that it allows you to deduct taxes for a longer time, while you save before buying the home, and it helps you reduce the costs of a possible loan.
What type of housing to choose?
New or second-hand housing, free or protected, flat, chalet, extension, number of rooms, location…
New housing or Tax Benefits of Rental Property is one that has never been transmitted. Normally its price is higher than the second-hand one and in many cases, it will be necessary to decide, just by looking at the plan, if we like it or not or if it adapts to our needs. However, in many cases, there is the possibility of making modifications to the structure of the home or getting involved in the choice of materials. Housing that has already been transferred on some occasion is called second-hand. In this case, it will be necessary to pay more attention to the state of the house and assess the possible improvements that need to be made. The purchase of a new or first-hand home is subject to the payment of VAT, 7%. In the case of a second-hand acquisition, you do not have to pay VAT, but you do have to pay the Property Transfer Tax, the percentage of which varies depending on each province.
New or second-hand housing
New housing is one that has never been transmitted. Normally its price is higher than the second-hand one and in many cases, it will be necessary to decide, just by looking at the plan, if we like it or not or if it adapts to our needs. However, in many cases, there is the possibility of making modifications to the structure of the home or getting involved in the choice of materials. Housing that has already been transferred on some occasion is called second-hand. In this case, it will be necessary to pay more attention to the state of the house and assess the possible improvements that need to be made..
