If you’ve decided to buy a home, it’s important you understand all the costs involved in addition to the price you're paying for the property.
Here’s an overview.
Lenders may charge a mortgage application fee, which will vary depending on the lending institution.
Mortgage insuranceThe federal government requires high-ratio mortgages with less than 20% down payment to be insured against default. The cost ranges between 0.60 to 3.85 per cent of the mortgage amount which is added to the mortgage principal.
Appraisal feesBefore your lender approves your mortgage, you may be required to have the property appraised. Sometimes your lender will cover this cost. If not, you're responsible. The fee ranges and is typically $300 plus GST.
Land survey feesLenders may require a survey of the property. The fee ranges and is typically $700 plus GST.
Home inspection feesA home inspection is a report on the condition of the home and includes structural and moisture problems, as well as electrical, plumbing, roofing and insulation. The fees range and is typically $500 - $700 depending on the size of the home and the complexity of the inspection. Some inspectors also charge an additional fee for an older home or a home with a secondary suite, a crawlspace, or a laneway home.
Goods and Services Tax (GST)The GST on a new home is 5% of the price. A GST rebate equivalent to 36% of the GST paid is available for new homes priced up to $350,000 and a partial rebate on new homes priced up to $450,000.
Buyers will also pay the GST on fees for services from appraisers, home inspectors, lawyers and Notary Publics.
Provincial Sales TaxThe PST is generally not payable on services except for legal and notary fees. Both the GST and PST are paid on legal and notary fees.
Property Transfer TaxHome buyers in BC pay a provincial Property Transfer Tax (PTT) when they buy a home. The tax is charged at a rate of 1% on the first $200,000 of the purchase price and 2% on the remainder.
Qualifying first-time home buyers may be exempt from paying the PTT if the purchase price of their home is priced up to $475,000. There is a proportional exemption for homes priced between $475,000 and $500,000. At $500,000 and above the rebate is nil. Click here for more cost saving programs.
Adjustments (see details in the Contract of Purchase and Sale)
A buyer is typically required to reimburse the seller for any prepayments for municipal swer and water fees.
If there is a secondary suite or a laneway home rental and the tenancy continues, the buyer receives the security deposit from the seller with accrued interest because the buyer is responsible for reimbursement when the tenant leaves.
Mortgage life insuranceIf the owner dies, this type of insurance will pay off the balance owing on their mortgage.
Fire and liability insuranceMost lenders require property buyers to carry fire and extended coverage insurance and liability insurance.
Home insuranceLenders typically require home buyers with a mortgage to buy home insurance. The insurance should be effective on the earlier of either the completion date or the date that the balance of funds is placed in trust.
Legal or Notary Public feesBuyers typically hire a lawyer or Notary Public to assist with drafting documents and ensuring the title of the home is properly transferred.
Moving feesMoving fees vary depending on the distance moved and whether professional movers do all of the packing. Rates vary.
Utility hook upsTypically $200 for hydro; cable; phone. There will also be a fee for water and sewer.
LocksNew owners should always have door locks rekeyed. This typically costs $100 per door. Electronic locks cost more.
Strata maintenance feesTypically paid on the first day of each month.
If you have questions about closing costs, please contact us.