- Property transfer tax (PTT). When purchasing a home in B.C., you pay a tax based on the fair market value of the property. This tax cannot be included in your mortgage, so you need to ensure you have this amount saved. First time homebuyers may be exempt from this tax, depending on the value of the home, Purchasers of newly built homes may also be exempt from this tax, depending on the property and its value. If you’re a foreign national, foreign corporation or taxable trustee, you also pay the additional property transfer tax on residential property transfers within specified areas of B.C. For more specific detail on the tax rates, please click here.
- Appraisal fee. Your lender may ask you to have a home appraised to confirm its market value, particularly if your home is valued at $1M or higher. Fees vary depending on a property’s value and complexity, but are typically around $400.
- Legal fees. A lawyer or notary will help protect your interests by reviewing your purchase agreement, searching the property title, and ensuring that all documents are completed properly. Legal fees usually start at $1000-1200, with added services as needed.
- Home inspection. An inspection can help make you aware of issues related to a home’s structure and systems, such as plumbing and electrical, and recommended or necessary repairs. Fees range from about $350 to $450.
- Home/fire insurance. Your lender will require proof that the property is insured in case of fire and other damage. Insurance costs vary, depending on the coverage needed, but budget for at least $500 a year.
- Costs for newly constructed homes. If you’re buying a brand-new home, be prepared to settle any items not quoted in the original price, including upgrades or paving and landscaping fees. New homes are also subject to 5% GST, although this is often included in your purchase price. A federal rebate reduces the GST to about 3.5% for homes valued at $350,000 or less. For more detail, please click here.
- Prepaid costs. If the seller has paid property taxes, water bills, or utilities in advance, you’ll need to reimburse these at closing. This can add hundreds to your upfront costs, but means these bills will be paid for your first months in your new home.
- Mortgage insurance. If you have less than a 20% down payment, your lender will require that you obtain mortgage default insurance. This is rolled into your mortgage and spread over the life of your mortgage, so is not needed in addition to your down payment.
- Title insurance. Title insurance can safeguard you against fraud and problems with your property title or survey. Fees range from $150 to $350 and is included in the fee quote from your chosen lawyer or notary.
- Moving-in costs. Before the big day, budget for all those last minute things: $100 or more to rent a van or a few hundred for professional movers, $50 to $60 for a locksmith to rekey your locks, and cleaning supplies. Such incidentals can easily come to $500 or more.
As a mortgage professional, I’m here to help you feel financially prepared for owning a home – I’m always available to answer your questions.
Contact Patricia Collins today to discuss your best options at 604-996-7701!