Congratulations on taking the first step toward homeownership! As you prepare for this exciting journey, I want to ensure you’re fully informed about closing costs—the expenses beyond your down payment that come with purchasing a home.
What Are Closing Costs?
Closing costs are the fees and expenses required to finalize your home purchase. In BC they typically range from 2% to 4% of the purchase price. Below is a detailed breakdown:
1. Property Transfer Tax (PTT)
Standard Rate: 1% on the first $200,000, 2% on $200,000 to $2M, 3% on $2M–$3M, and 5% on anything above $3M.
First-Time Home Buyer Exemption: If you were buying a home under $500,000, there's an exemption. A partial exemption applies for homes between $500,000 and $525,000.
2. GST (if applicable)
If you’re buying a newly built home, 5% GST applies - Rebates are available for homes under $450,000.
3. Legal Fees & Disbursements
A real estate lawyer or notary is required to transfer ownership. Costs typically range from $1,200 to $2,500, depending on complexity. I'll provide some referrals for trusted partners once we arrive at this stage. You won't need this until we know we are moving forward with a property.
4. Home Inspection (Optional but Recommended)
A professional inspection ensures the home is in good condition. Costs range from $400 to $700.
5. Appraisal Fee
Your lender may require an independent appraisal to confirm the home's value. This usually costs $300 to $500.
6. Mortgage Default Insurance (If Your Down Payment Is Less Than 20%)
CMHC insurance protects the lender and is rolled into your mortgage. The premium depends on your down payment but can range from 2.8% to 4% of the loan amount.
7. Title Insurance & Survey Fees
Title insurance protects against fraud or property ownership disputes ($250 to $500). Some lenders may also require a survey certificate ($500 to $1,000).
8. Adjustments (Prepaid Property Taxes, Utilities, & Strata Fees)
If the seller has prepaid these costs, you’ll reimburse them for the portion that applies after your possession date. These costs will be clarified on your statement of adjustments at the lawyers.
9. Moving Costs & Home Setup
Don’t forget to budget for movers, utility hookups, and home essentials!
We are here to help with every part of the transaction, set up a Discovery call today!
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