expected costs as a buyer

Part of our job is to make sure it is clear to you as a buyer what costs you should be expecting, before you have to pay them! These are some potential expenses to anticipate that are additional to the cost of your home.

PROPERTY TRANSFER TAX (PTT)

PTT is paid on the completion of the purchase. It is the buyer’s responsibility to pay the Municipal property tax adjustment, as well as the Property Transfer Tax equal to the total of:

• 1% of the purchase price on the first $200,000.
• 2% of the purchase price that exceeds $200,000 up to and including $2,000,000.
• 3% of the purchase price that exceeds $2,000,000 up to and including $3,000,000.
• 5% of the purchase price that exceeds $3,000,000.
• An additional Property Transfer Tax equal to 20% of the purchase price if the buyer is a Foreign Entity or a Taxable Trustee as defined by the British Columbia Transfer Tax Act.

Note that first-time buyers are exempt when purchasing a home under $500,000. 

Buyers should obtain independent legal advice with respect to the payment of Property Transfer Tax.

LEGAL FEES

There are costs involved in working with a lawyer or notary to process the transaction. We recommend that you budget up to $1,500 to be safe.

PROPERTY APPRAISAL

Your mortgage lender may require an appraisal of your new home to ensure the value of the property is greater than the value of the loan. If this is required, expect to pay several hundred dollars.

HOME INSPECTION

You may want a home inspection either before submitting an offer, or as a subject condition of the purchase. Inspectors usually charge several hundred dollars.

MORTGAGE DEFAULT INSURANCE

This one-time premium is added to your mortgage balance and paid off over the life of your mortgage. It is required for mortgages with a down payment of less than 20%.

The premium ranges from 2.8% to 4.75% of the mortgage amount. 

HOME INSURANCE

While not necessarily a cost related to purchasing a house, home insurance is an expense to keep in mind and arrange to have in place starting on your Completion Date.

ADJUSTED PROPERTY TAXES

Property taxes for each calendar year are collected from home-owners on July 2nd. If you are purchasing your home later than this date, you will need to reimburse the seller for an adjusted portion of the property taxes. Your lawyer or notary will coordinate this amount and notify you whether you owe a portion of taxes. There is a $750 rebate available for first-time buyers.

GST (only on new homes)

For newly constructed homes, GST in British Columbia is 5% of purchase price.

CLOSING COST ANALYSIS

We will calculate an estimation of what your closing costs will be.