Cost Of Buying A Home
THE 11 IMPORTANT CLOSING COSTS WHEN PURCHASING A HOME!
1 Property Transfer Tax - The property purchase tax is payable on the purchase of all real property in B.C. It is calculated based on 1% of the purchase price up to $200,000 and 2% of any amount above $200.000. Most first time buyers are exempt from this if they meet certain criteria. The main criteria are:
*borrower has never owned a principal residence anywhere
*maximum purchase price of $475,000. The previous threshold was $425,000 and changed February 18, 2014.
*borrow at least 70% of purchase price
*be a Canadian citizen or permanent resident, and been in BC for a minimum of 12 months.
2 Inspection – We recommend that you have your home inspected. The cost will typically be between $350 and $600.
3 Legal Fees - Legal representation will cost you approximately $1000 for a purchase, and $500 for a sale.
4 Interest Adjustment - This is the interest you will pay for receiving your mortgage money before the official start of your mortgage (i.e. if your “completion” were on the 23rd of a 30 day month, your interest adjustment would be 8 days interest).
5 Property Tax Adjustment - Generally property taxes for the calendar year are paid at the beginning of July. If you purchase a property before July 1st, the seller will be paying you for the days they owned the home after January 1st. If you purchase a property after July 1st, you will pay the seller for the days you own the property before December 31st. (one day’s taxes on owner occupied properties are – annual taxes divided by 365).
6 Strata Cost Adjustments And Form A Certificate For strata properties only you will be reimbursed for strata fees you may have paid, or may have to pay for strata fees owed (depending on your purchase/sale date). A Form A Certificate is required only when a strata property is purchased. The certificate is issued in order to confirm that the previous owner does not owe the strata corporation any money. This certificate will range in price up to approximately $50.
7 CMHC Application Fee - This is a $75 underwriting fee paid to CMHC for processing a hi-ratio mortgage application and initiating the mortgage loan insurance. This fee is usually deducted from the mortgage proceeds.
8 Property Appraisal - The property is evaluated by a professional appraiser to determine the market value of the property. This is done to ensure that the lending institution is not over advancing on the property to protect the borrower from over paying. Appraisals usually cost $200. Ask your lender to pay this fee as most will.
9 Survey Certificate - Generally, a bank will require a survey to confirm that the house does not encroach or cross over the property line. The seller will often already have a survey, especially if the seller also had a mortgage on the property. CMHC requires a survey on all hi-ratio insured mortgages. Surveys are not necessary if the purchaser is buying a strata property.
10 Insurance Binder - This is a requirement by the bank to ensure that the purchaser has arranged fire insurance on the new home. Proof of coverage by way on an insurance binder is necessary and usually costs about $35.00. (This is not applicable for a strata property.)
11) GST - GST is charged on all new construction. Please look at our GST Calculator or contact us directly for the GST rules and rebates.