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Costs to Expect

In addition to the purchase price of the home, there are costs that will be due on, or by, closing day. These are fees that must be paid for your house purchase to be complete. 

Most of these fees are in addition to, and separate from, your mortgage loan (although some closing costs can be tacked onto your mortgage). We will discuss all of these costs in detail so that you are fully prepared for what to expect and can budget accordingly.

Here is an idea of what to expect:

Legal fees (including disbursements) Expect to pay between $1000 and $1500 for a notary or real estate lawyer, but cost varies depending on the extent of services provided. Due at closing.

  1. Land Transfer Tax Land Transfer Tax Varies by province and sometimes municipality or city. Paid by the buyer. Due at closing. In BC Property Transfer Tax is 1% on the 1st $200,000 and 2% on the balance. For example, a $500,000 place would have $8000 in tax payable upon completion. This is an upfront cost and cannot be mortgaged. First time home buyers may qualify for an exemption of this tax for purchases at or below $475,000 and a prorated exemption between $500,000 and $525,000.

  2. Interest adjustment Varies with mortgage amount and terms. Due at closing.

  3. Property tax/pre-paid utilities adjustments Varies widely, but often under $1,000. Due at closing.

  4. Title insurance Around $200. Applies to houses only. Due by closing.

  5. Estoppel certificate (for condos only) Around $100. Due by closing.

These expenses are approximations only; they may vary by region, and are prone to frequent changes. House inspection (optional) $500 and up. Due at the time of application. Don’t forget to budget extra funds for expenses related to moving (moving company, utility hookups) and regular housing costs once you own the home (utility bills, maintenance)

Property Transfer Tax is a tax on land registration.

It is calculated as 1% on the first $200,000 and 2% on from $200,001 to $2,000,000, 3% on over $2,000,000-$3,000,000 and 5% on anything over $3,000,000.

Ex. $500,00 Purchase price 1% on the first $200,000 = $2000 2% on the balance ($300,000) = $6000 Total = $8,000.

Thresholds For registrations on the fair market value threshold for eligible residential property is $500,000. A partial exemption is provided for eligible residences with a fair market value up to $25,000 above the threshold (up to $525,000).

New Home Exemption up to $800,000 The Newly Built Home Exemption reduces or eliminates the amount of property transfer tax you pay when you purchase a newly built home. To qualify, the property (land and improvement) transfer must be registered at the Land Title Office after February 16, 2016 and you must be a a Canadian citizen or permanent resident (you will be asked to provide your Social Insurance Number (SIN) or proof of permanent residency and your birth date). The property must be located in B.C and only be used as your principal residence, and have a fair market value of $800,000 or less.

I will go through all the extra costs with you prior to you writing an offer so that you know exactly what to expect.

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