Property Management and Real Estate Services

Getting Interest On Your Deposit

Getting Interest On Your Deposit

Despite what many buyers of resale homes and condos believe, interest isn’t automatically paid on a deposit in a real estate transaction. They only get interest on their deposits if a clause saying that appears in the offer to purchase.

Then three criteria must be met-the deposit is at least $5,000; closing is at least 30 days away; and the buyer provides his or her Social Insurance Number. A $5,000 deposit and a thirty-day closing aren’t legal requirements, but they’re the minimum to buy a term deposit. And your Social Insurance Number is needed so you can be sent a T5 slip after closing, since the interest earned on a deposit is taxable.

Builders don’t often pay interest on deposits when buying a brand new home-but it can be negotiated into the contract.

When it comes to interest on deposits, remember-if it’s not in the offer, it’s not in the deal.

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