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.
