135-4370 Lorimer Road
Whistler B.C. Canada   V0N 1B4
Phone 604-905-6326, Cell 604-932-7741, Fax 604-932-4120
Toll Free 1-888-689-0070, E-Mail sally@direct.ca
Web site www.propertiesinwhistler.com

WHISTLER RESORT

A Brief History

Back in February 1966, when Garibaldi Lift Company opened its ski area on the west side of Whistler Mountain, Whistler Resort was only a vision of a dedicated few. The development of Whistler Resort just 14 years later, and its successive growth into an award-winning, international resort, is unparalleled in ski history.

To complement Whistler Mountain, Blackcomb Mountain opened its brand new facility on December 6, 1980, and Whistler Village was built at the base of these two side-by-side mountains. In 1988, Whistler Mountain installed a high-speed, 10-person gondola; in 1994, Blackcomb unveiled its 8-person express gondola, improving the Village’s ski-in/ski-out convenience to two vastly different yet equally spectacular ski areas. In 1996, Whistler Mountain installed a 6-person, high speed gondola at its Whistler Creekside base.

The Village itself was carefully designed to reap the benefits of the Coast Mountain’s excellent geographical location with innovative design principles, developed by the brightest architects, planners, and landscape professionals in North America, emphasizing excellent sun exposure and breathtaking vistas. The Resort’s high design standards and commitment to first-class facilities and service have earned international recognition.

Awards
• Skiing Magazine editors selected Whistler as the Number One Ski Resort in North America in 2001, 2000, 1999, 1998, and 1996.
• Ski Magazine readers voted Whistler the Number One Ski Resort on the continent in the magazine’s 1999, 1998 and 1995-reader survey.
• Snowboard Life Magazine selected Whistler as the Number One Snowboard Resort In North America in 2000.
• Sports Illustrated For Women named Whistler the “Best Adventure Town” fall 2000.
• Transworld Snowboarding Magazine selected Whistler as the Number One Snowboarding Resort in North America 2001.
• U.K. based Good Skiing And Snowboarding Guide editors selected Whistler as the Number One Ski Resort in North America since 2002.
• Golf Digest Magazine rated Whistler as one of the top 50 Greatest Golf Destinations.

Quick Stats 2000 /2001

• Whistler is the largest ski area on the continent, with 7,071 acres of skiable terrain, more than 200 trails and 12 bowls.
• The two greatest vertical rise ski mountains in North America, with Blackcomb rising one vertical mile (5,280 feet) to an elevation of 7,494 feet, and Whistler rising 5,020 feet to an elevation of 7,160 feet.
• Whistler attracts over two million visitors annually. In 2000/2001, over 903,560 visitors came to Whistler Resort in the winter (November 1, 2000 to April 30, 2001) and approximately 1.2 million came in the summer (May 1, 2000 to October 31, 2000).
• The average number of visitors in the resort per day in the winter is just over 16,894 (ranging from a low of 7,550 in November to a high of 20,712 in February). The average number of visitors in the resort per day in he summer is 12,494 (ranging from a low of 5,972 in October to a high of 17,969 in July).
• Strong growth in the number of room nights generated by visitors has been recorded over the past ten years. In the summer of 2000, the number of room nights generated increased by 8% to 406,363. In the winter of 2000/2001, the number of room nights generated increased by 3% to 616,201. Summer currently represents 40% of total room nights and winter represents 60%.
• Whistler has the most ski-in/ski-out accommodation of any mountain recreation resort in North America. To date there are 18,208 pillows within 500 meters of the lifts. Ski-in/ski-out accommodation represents more that 75% of all existing rental pillows.
• At the end of 1999, the total committed bed unit inventory stood at 55,020 with 10,609 remaining committed and undeveloped bed units. At the end of 1999, approximately 80 percent of all committed bed units have been developed. Assuming an average of 2,300 new bed units per year, build out of all the remaining undeveloped bed units would be completed in 2004.

The Types of Properties in Whistler

The Resort Municipality of Whistler offers a diverse selection of property types with the appropriate "zoning" or "covenant" in place to permit "specific uses". The following is offered as a summary only and Buyer’s should be advised to confirm the "zoning" and "permitted uses" on properties they are entertaining to buy.

Residential Zones

Throughout most of Whistler the residential neighborhoods are zoned for "residential-use" only. Permitted uses include primary residence, residential tenancy rentals and personal recreational-use. Commercial activity including "Tourist", i.e. short-term rental is not permitted. The property types commonly found in these areas include, old cabins, modest chalets, luxury executive- style homes, townhomes, apartment-style condos and "employee restricted" condominiums and homes.

Tourist Accommodation Zones

The majority of these properties are located in the Village area, Blackcomb Benchlands and selective areas of Whistler Creek. Outside of these areas there are "pockets" within the residential neighborhoods of Green Lake Estates (Nicklaus North) and Tree Tops that permit Tourist rentals.

Within the Village, Benchlands and Creekside areas the property types found are townhomes, apartment-style condos and hotel units. These can range from studios to 3 and 4 bedroom luxury properties.

It is important to note that within these areas there are two types of properties commonly referred to as Phase One and Phase Two condominiums. By placing the restrictive covenants (Phase I and Phase II) on properties pre-designated as "Resort Land" the Municipality of Whistler has required perpetual availability and use of tourist beds near the village and mountain facilities. This guarantees a minimum percentage of units for tourist accommodation year round. The actual wording of the covenant can differ from development to development and so their interpretation by different rental management companies.

Phase I

Unrestricted owners’ use - These are properties that are best suited for the owner that wants flexibility and control over their property. The owner can determine when and how often they want to use it and when and how often they wish to offer it for rent. In most cases they can also choose how to rent it. Either through a rental company (who may offer the convenience of a "front hotel-type desk"), a small boutique rental operator or utilizing an Internet owner-direct rental service. In most cases the covenant is worded in such a manner that puts a moral obligation on the owner to offer their property for rent when they are not using it.

This type of property works best for the owners who treat their units as a good equity investment, need some revenue, and want to use them personally.

Phase II

Restricted use for the owners- These properties are typically the "true hotel type buildings". Some examples would be The Westin, Holiday Inn, Delta Village Suites, Cascade Lodge, Pan Pacific Lodge and numerous smaller lodges in the Village.

Owners are allowed to use their property for a maximum of 28 days in summer and 28 days in winter. The specific dates of usage must be booked in advance with the rental management company. Most of the management companies are more specific as to when and how owners are allowed to use their units. These units are generally incorporated into an ongoing "hotel" operation. Benefits include "pooled revenues" as well as the standard hotel services (daily maid and room service).

These types of units are best suited for the occasional visitor to Whistler or for an investor interested in revenue only.

Unrestricted Properties

In these same areas there are some developments which have no restrictive covenants registered on title and therefore must follow the permitted uses as per the zoning.

Please note: Restrictive covenants on title and zoning requirements are very important and can be complex to understand. Clarification should be addressed with your Realtor and your Lawyer prior to purchasing.

INFORMATION ON COSTS FOR BUYERS

1. COMPLETION COSTS:

Property Transfer Tax (PTT)

A Provincial Government Tax which applies on all transfers of Real Estate and is payable on the completion date. The rate of tax on one percent (1%) on the first $200,000 of the purchase price and two percent (2%) on the balance of the purchase price over $200,000.

Legal Fees & Disbursements

These are the closing costs paid to a lawyer or notary to complete the transaction on your behalf. Fees are paid for completing the conveyance and preparing and registering the mortgage. Disbursements are the costs for out-of-pocket expenses such as government registration charges, property and tax information searches, courier costs, long-distance calls plus PST and GST. The exact amount of these charges will vary depending on the transaction but they generally range from approximately $800 to $1,000. Most lawyers and notaries will provide quotes as to charges, it is important to ask whether the quote includes all expenses to complete the transaction.

Goods & Services Tax (GST)

GST is a seven percent (7%) tax which applies on the purchase of new construction and on the resale of accommodations which have been rented out for short-term/nightly rentals. The payment of GST can be deferred if the buyer intends to rent the property out for short-term/nightly rentals for ninety percent (90%) of the year and becomes a GST registrant. Becoming a GST registrant is a relatively straightforward procedure and can be done over the phone if you are a Canadian resident (or in writing if you are non-resident). Once you are a GST registrant, you are entitled to claim credits for the GST that you pay, for example, on legal fees, property management fees, hydro, cable, telephone. You are then required to charge, collect and remit GST on the nightly rentals, which in some instances may be done through your property manager. You will be required to annually fie a GST Return.

Appraisal Fee

An appraisal determines the value of the property. Financial institutions will order the appraisal but it is the responsibility of the borrower to pay the appraisal fee.

2. ON-GOING COSTS:

Property Taxes

Property taxes are paid in July for the full calendar year.

Tourism Whistler Fees

These are quarterly fees payable to Tourism Whistler for properties located on "Resort" lands. They are calculated based on the number of bed units (eg. one bedroom equals two bed units) present in the accommodations, and are dependent on the use of the property.

Insurance

Buyers will be required to arrange insurance on single-family residential accommodations. With respect to strata-titled properties, buyer should maintain liability and contents insurance.

Condominiums / Townhomes Maintenance Fees

Buyers will be responsible for paying monthly maintenance charges. The Strata Corporation is also entitled to levy special assessments for extraordinary expenses, should there not be sufficient money in the contingency reserve fund.

Utilities

Buyers may need to set up new accounts for hydro, cable, gas and telephone.

OTHER INFORMATION FOR BUYERS TO CONSIDER

Should I buy in my name or in the name of a company?

The answer to this question is usually tax driven and therefore you should obtain accounting advice. There can be draw backs to purchasing in the name of a company including the following:

A. Corporations may pay tax on income received from the property at significantly higher rates than individuals (depending on the individuals marginal tax rates);
B. Corporations can pay higher capital gains tax as well;
C. Should you incorporate a company specifically for the purposes of acquiring a property you will have additional legal cost of incorporating the company for approximately a $1,000 plus additional costs associated with maintaining the company annually such as filing annual reports, registered and records office charges and accounting charges;
D. If the company is from a jurisdiction outside of British Columbia, your mortgage lender may require that the company be registered within British Columbia prior to agreeing to lend money (the cost associated with doing so would be roughly as outlined in the proceeding paragraph);
E. In the event that the company was not required to register within British Columbia prior to completing the transaction, a Certificate of Good Standing would be required from the incorporating jurisdiction and an Opinion Letter from a solicitor from the incorporating jurisdiction would be required in conjunction with any mortgage financing;
F. It will be necessary to maintain the company in the incorporating jurisdiction as long as the property is owned;
G. Personal guarantees of the principals of the company will usually be required by the mortgage lender even though the property is owned by a limited company.

The advantages of having the property held by an incorporated entity would include the following:

A. In the event of the death of the principals of the company there would be
no change of ownership of the property in the British Columbia Land Title system, and if the shares are held outside of British Columbia there would not be any probate fees payable in conjunction with the shares;
B. If the only asset that the company owns is the property, it may be possible to sell to a Buyer the shares in the Company thereby avoiding the payment of Property Transfer Tax and GST on a sale of the property (Buyers may be reluctant to purchase shares as they would inherit any liabilities in the company including any monies owing to Revenue Canada).

Should I buy in the name of a trust?

There are individuals who inquire about purchasing their Whistler property in the name of a family trust. The reasons that this is done is to avoid probate or succession duties upon the death of the owners of the property. There are probate fees that would apply in British Columbia and they are $14.00 for every thousand dollar in value. The simplest and easiest way to avoid probate duties on the death on one individual is to have the property held in joint names by a number of individuals and then the property will pass to the surviving joint tenant without the necessity of paying any probate fees. This doe not solve the problem if both of the registered owners on title die.

Should a buyer wish to purchase in the name of their family trust, the Land Title Office will require that the entire original trust document be filed in the Land Title Office. The document is then a document of public record, quite often; these documents list in detail the assets of the trust.

If it is contemplated that in conjunction with the purchase of the property a mortgage will be obtained, then there will also be an issue as to whether a mortgage company is prepared to lend to the trust. There will be additional legal costs in conjunction with both registering the trust document as well as providing any necessary legal opinions as to whether the trust has the legal capacity to enter into a binding mortgage.

OF PARTICULAR NOTE FOR NON-RESIDENTS OF CANADA

Withholding tax on rental income

Revenue Canada Taxation requires non-residents to pay twenty-five percent (25%) of the gross rental income from the property to Revenue Canada. You may obtain exemption from such withholding tax if you complete a government form called an NR6 setting out that the projected income is less than the anticipated expenses associated with the property. Most property managers will assist in the completion of the NR6 return. Upon having filed an NR6 return, you are obligated to file an annual tax return with respect to the property with Revenue Canada. Revenue Canada will only allow expenses to be claimed if the returns are filed and will disallow any expenses incurred more than two years prior to the time of filing the return, it is therefore important that the returns are kept current to avoid expenses being disallowed and tax being paid on the gross rental income.

Mortgages

Mortgages in British Columbia differ from those available in the United States and other countries in several significant ways, including the following:

The Mortgage is for a fixed term, typically between six months and five years. At the end of the fixed term, the interest rate is renegotiated.

During the fixed term, there are limited rights to repayment, typically ranging from 10 to 20 percent.

In the event that you wish to prepay more than the permitted amount, and in the event of a sale of the property, penalties would apply and typically are the greater of three (3) months’ interest or the interest rate differential.

Execution of mortgage documents

Once the borrower has signed a commitment letter with the lender, the lender will instruct a lawyer or notary to draw the mortgage security. These documents must then be couriered to the borrower for their execution in the presence of a notary public. The Land Title Office does not accept faxed documents; therefore sufficient time must be allowed for the documents to be couriered, executed originally, couriered back and filed in the Land Title Office prior to the completion date.

Methods of payment

The balance of the purchase price must be paid by certified cheque or bank draft in Canadian funds. Exchange rates may fluctuate and lending institutions in Canada, the United States and other counties may give different rates of exchange or quote different rates of exchange depending on the dollar amounts involved. This is an issue that should be addressed in advance of the actual completion date.

It is possible to wire funds directly to the solicitor’s trust account; however, because of the routing of funds, it can sometimes take several working days before funds wired will actually appear in the solicitor’s trust account for the closing.

It is recommended that the buyer open a bank account with a bank in Whistler to facilitate the payment in Canadian funds of ongoing expenses and the receipt of revenue from the property.

Time is of the essence

Completing transactions on the designated completion date in British Columbia is critical. The seller has the option of cancelling the contract of Purchase and Sale should the funds not be paid on the stipulated completion date and is entitled to retain the deposit. It is not uncommon for sellers who wish to continue with the transaction to demand interest or additional charges for extensions for late completion.

Canada Customs

Should you intend to furnish your recreational property with personal effects from your home that you have acquired outside Canada, you should contact Canada Customs to determine their requirements to avoid paying duty on the furnishings. Ordinarily you are permitted to transport one shipment of personal effects to a recreational residence without duty. In order to do so, you will have to provide proof at the border of your recent purchase. The purchase document required is the registered Form F Transfer.

File tax returns with Canada Customs Revenue Agency Annually

Canada Customs Revenue Agency requires that tax returns be filed each year with respect to revenue producing properties. They will only allow expenses with respect to revenue properties to be claimed for two (2) preceding years so it is important to keep your tax filings current.

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