There are more costs involved in buying a home than just the down payment and monthly mortgage payment. Closing costs typically ranged from 1.5% to 4% of a property’s purchase price, which can be pretty significant. Closing costs typically can include the following:

MORTGAGE-RELATED COSTS

If you plan to finance your property, there might be a mortgage application fee and/or mortgage default insurance costs. Estimates of these costs can be obtained from your mortgage provider, be it a broker or a bank. Check in with them ahead of time to avoid surprises. Some providers charge application fees; others do not. Depending on your down payment, your mortgage provider could require you to have default insurance.

PROPERTY TRANSFER TAX

All real estate purchases throughout British Columbia are also subject to a Property Transfer Tax of 1% on the first $200,000 of the purchase price and 2% on the excess over $200,000. The Property Transfer Tax is a land registration tax and is paid when changes are registered to the certificate of title with the Land Title Office. Certain exemptions are available, such as the First Time Home Buyers’ Program.

GOODS AND SERVICES TAX

In British Columbia, certain properties are also subject to GST (Goods and Services Tax), a Federal tax of 5%. These include new home construction, units that are made available for short-term rent and real-estate related service transactions. GST on real estate can be quite complex and depends on the situation of the vendor and purchaser, the use of the property and the management. If you have further GST related questions, please contact me and I can direct you to real estate tax professionals.

LEGAL FEES

Legal fees will cover the transfer of the title and any other legal activities your lawyer or notary will undertake. These are approximately $1000-1200 dollars. Together with my conveyancing team, we will make sure all appropriate documents get sent to your notary or lawyer. You’ll want to make sure you have informed them you’ll be using their services and when your completion date is. From there you’ll set up a time usually a couple days before completion to sign some documents.

APPRAISAL AND SURVEY FEES

These fees will be incurred if your financer requires an appraisal or a land survey. They will let you know if this is the case. Sometimes this cost can be covered by the bank whom you’ll be getting your mortgage with.

INSPECTION FEES

It is strongly recommended that you obtain an inspection on the property, either prior to making an offer or as a subject to an offer. This money will be well spent, as it will alert you to any possible issues with the home and property.

COSTS OF MOVING

Moving costs will vary greatly, depending on your situation. Some properties might be completely furnished, while others might require you to move everything in, essentially starting from scratch. If you will need to hire movers or secure moving equipment, be sure to budget for these expenses.

OTHER COSTS

This is not a complete list– every property purchase is different, and additional costs may be applicable. These could include additional specialty inspections, geotechnical surveys for land or repainting a room, or major renovations to name a few.