BUYER’S CLOSING COSTS

When you purchase a home there are a number of miscellaneous costs that you will have to take into account when making calculations. Having an idea of what type of costs and their amounts will help you prepare adequately in order to ensure that there are no negative surprises jumping out at you during this exciting time. Here is a basic list of the majority of costs:

Lawyer/Notary Fee – $1000 – $1500**

Fee is for title review, document review, gathering of mortgage instructions.

Includes title transfer and registration.

Cost varies based on type of mortgage, type of purchase, type of buyer.

For a list of recommended Lawyers/Notaries, CLICK HERE.

Pro-Rated Property Tax Amount

Lawyer/notary will calculate your portion of the annual property tax based on the Adjustment date of your contract.

July 1st is the day that property tax is due and payable which means:

If Adjustment is AFTER July 1st, you will owe a portion of the annual amount to the Seller as they will have already paid for the entire year.

If Adjustment is BEFORE July 1st, you will be owed a portion of annual amount by the Seller as you will be paying the entire year’s amount on July 1st.

The portion is calculated on a per day basis and all credits/debits are done at Completion via your “Statement of Adjustments”.

Property Transfer Tax

When a Buyer purchases a property in BC, they are subject to a one time tax which is calculated as follows:

1% on the first $200,000 and 2% on the balance of the purchase price

This tax is due and payable upon Completion of the sale and must be paid by real funds. It cannot be included in the mortgage amount.

There are certain exemptions for the Property Transfer Tax, including the First Time Home Buyer’s Program. To find out if you qualify for an exemption, visit BC – First Time Buyer PTT Exemption Info

Another exemption that you may qualify is the Newly Built Home exemption program. Qualifications and restrictions to this program can be found at BC – Newly Built Home Exemption

Survey or Survey Certificate or Title Insurance – >$500**

Your bank/lender may require a copy of the property’s site survey certificate.

A survey certificate illustrates the lot lines and the location of improvements upon a lot. This allows a bank/lender/purchaser to confirm any encroachments that could affect the property’s use and/or value.

If a survey certificate does not exist, a buyer can pay to have one done or in certain cases pay for a title insurance policy.

Great information on both surveys and title insurance can be found in this bulletin from BC Land Surveyors: BCLS – Info Bulletin

Appraisal – $250 – $500**

Typically, if you are a conventional borrower, most banks/lenders require a property appraisal to be done on the property you are considering purchasing. This allows the bank/lender to confirm that they are lending mortgage funds for a property that is being purchased at fair market value.

Usually not required for high ratio borrowers because those mortgage products are usually insured by a third party (i.e. CMHC, Genworth etc).

Insurance

Fire/Property Insurance (Detached Homes)

You MUST have an insurance policy for your home if you are purchasing with a mortgage.

Policy costs vary depending on various factors including size, age, type of materials used to build the home, location etc.

For a list of recommended professionals, CLICK HERE.

Content Insurance (Strata Properties)

As the Strata Property Act dictates that the strata corporation must have fire/property insurance coverage, you will not need to obtain that for your strata purchase.

You will, however, need to obtain a Content Insurance policy.

This will cover your possessions and/or any upgrades that you have done to the unit in the event of destruction.

In certain cases it will also cover the strata’s deductible should you be charged their deductible for damage caused from your strata lot (i.e. leaking washer flooding numerous units below etc).

For a list of recommended professionals, CLICK HERE.

Goods and Services Tax (GST)

NOT applicable on pre-owned residential purchases.

IS applicable to the purchase of newly built and substantially renovated homes.

5% of the purchase price amount.

In certain cases, rebates for portions of the GST amount will apply.

Primary Residence Rebate:

Spag and Co – GST New Home Rebate

Spag and Co – GST Rebate Calculator

New Residential Rental Property Rebate:

CRA – Residential Rental Property Rebate Info

Home Inspection – $500 – $700**

A home inspection carried out by a licensed and insured home inspector is an important part of the process.

Costs can vary based on size and age of the property.

For a list of recommended professionals, CLICK HERE.

Move In, Move Out Fee (Strata Properties) – <$300

Most (condo) strata properties apply a move in and/or move out fee when owners sell their property.

The rationale is that these funds go towards any costs associated with the repair of damage (repainting, hole repair, floor scratches, elevator damage etc) caused during a move.

Very common in condo developments, not as common in townhome complexes.

Moving Truck/Company

Whether you rent a truck or hire a company for your move, this is an expense that you should take into account.

Both options have positives and negatives.

Make sure you obtain proper insurance for whichever option you choose.

Costs vary depending on location of move, transit time, amount of items being moved etc.

For a list of recommended professionals, CLICK HERE.

**While the Aman Brah Real Estate Marketing makes every effort for accuracy and detail, please not that due to the varying service providers and scenarios in real estate, there may be variances in both costs and services AND there may be other costs not accounted for on this page. Although we have strived to provide a conservative estimate on most items, it is highly suggested that these items are not solely relied upon and independent confirmation is obtained from the service provider of your choosing.