Closing Costs for Buyer

CLOSING COSTS FOR BUYER

Closing Costs for Buyer Sold Prices

*** Please note, these are the most commonly encountered closing costs for buyer, but there may be other costs depending upon your specific transaction. Please contact your lawyer or accountant for complete details.

Property Transfer Tax – The amount of tax you pay is based on the fair market value of the property. The tax is charged at a rate of:

  • 1% on the first $200,000,
  • 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000, and
  • 3% on the portion of the fair market value greater than $2,000,000 and up to and including $3,000,000 and
  • 5% on the portion of the fair market value greater than $3,000,000.

If you’re a foreign entity or taxable trustee and the residential property is located in the Greater Vancouver Regional District, you also pay the 15% additional property transfer tax on the fair market value of your proportionate share. Your proportionate share is the percentage of interest you are registering on title with the Land Title Office.

You may qualify to reduce the amount of tax you need to pay if:

  • you’re purchasing your first home or
  • you’re purchasing a newly built home

For more info please view British Columbia Taxes and tax credits.

GST– Has to be paid on New Homes. A GST rebate equivalent to 36% of the GST paid is available for new homes priced up to $350,000 and a partial rebate on new homes priced up to $450,000.

Buyers will also pay GST on services such as appraisals, home inspections, survey fees, and legal and notary fees.

PST – is generally not payable on services except for legal and notary fees.

For more info visit Government of Canada

Remember that you need money at the closing date or before for all of these expenses on top of your down-payment. There are last-minute costs, such as taxes, legal fees, appraisal fees, moving expenses, and home insurance to pay before you are finally in your new home. The time to budget for these “end” expenses is now.

Legal fees – Lawyers/Notaries fees for closing the sale range according to the complexity of the deal but they will probably be around $1200. They include:

  • Searching Title
  • Drafting documents
  • Land Title Registration fees
  • Survey Cetificate (if required)

Survey Certificate – Your lender may require an up-to-date survey of the property. If the seller did not provide you with one, you will have to pay to have one done. Survey costs vary.

Prepaid property taxes or utility bills – You will have to reimburse the sellers for any prepaid property taxes or utilities. Some lenders require buyers to add property tax installments to monthly mortgage payments.

Appraisal – Before your lender approves your mortgage, you may be required to have an appraisal done. Sometimes your lender covers this cost otherwise you are responsible for covering this cost. The fee ranges from $250 to $350.

Mortgage Loan Insurance and Application fee – If you get a high-ratio mortgage (a mortgage where you pay less than a 20% down payment) you will have to buy mortgage loan insurance. There are 3 major mortgage insurance providers, Canada Mortgage & Housing Corporation (CHMC), Genworth Canada and Canada Guaranty. The premium is calculated as a percentage of the mortgage and can be paid either from your own resources or added to the mortgage.

Home Inspection fee – Most Realtors® recommend that you get a home inspection by a certified home inspector. Fees can range from $450-$700 depending on the size of the home and the complexity of the inspection. Some inspectors have surcharges for a secondary suite, a crawlspace or an older home.

Title Insurance – Some banks require you to get the Title Insurance in order to approve your mortgage. It will cost you around $200.

Home insurance – Buyers with a mortgage will be required to buy home insurance. To be safe, make the insurance effective on the completion date.

Moving expenses – vary depending on distance moved and whether professional movers do all the packing. Rates vary.

If you are thinking of buying a property check how we can help you.

Check our other blogs under Real Estate 101 – that might give you answers about buying or selling a home.

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.