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:
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.
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.
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. Please see our GST resource page. If you have further GST related questions, please contact us and we can direct you to real estate tax professionals.
Legal fees will cover the transfer of the title and any other legal activities your lawyer or notary will undertake.
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.
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.
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 hrie movers or secure moving equipment, be sure to budget for these expenses.
This is not an exhaustive list-- every property purchase is different, and additional costs may be applicable. These can be small, like repainting a room, or larger, like major renovations.