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