When preparing for your purchase, keep in mind the additional costs that may be involved in the transaction.  Depending on the property or mortgage you choose, you will also be responsible for the following:

Mortgage Insurance Premium

If purchasing a home with less than a 20% down payment, or if you choose an amortization longer than 25 years, you will require mortgage loan insurance, as offered from CMHC, Genworth, or Canada Guaranty.  The premium is the same among insurers & is typically added to your mortgage amount.

Property Transfer Tax

Provided you do not qualify for the first-time buyer property transfer tax exemption, the BC Government requires you to pay this tax at closing.  The amount owed is calculated as 1% of the first $200,000, plus 2% of the remainder of the purchase price, and is paid upon closing by your lawyer/notary.

Legal Fees

Your Lawyer or Notary Public reviews all documents related to the transaction, draws up mortgage documents, searches the title & handles all the details related to closing.  Fees vary but expect to pay around $800-$1000.

Appraisal Fee

An appraisal is an estimated value of your home & may be required by the bank, typically at a cost of $250 – $350.  If your mortgage requires CMHC insurance, chances are you will not have to pay for an appraisal.

Survey (or Certificate of Location) Fee

If the seller does not have one, you may be required to pay for a survey, ranging from $1,000 – $2,000.  It is unlikely that a survey does not exist, however if it is required, you have the cheaper alternative of purchasing Title Insurance, which protects you from deficiencies in the survey document or fraud.

Deposit

Required when making an offer to purchase, the deposit is part of your down payment & is typically 5% of the purchase price.

Down Payment

The minimum down payment for the purchase of a primary residence is 5%, while rental properties require a minimum of 20%.

Property Tax or Utility Bills

Annual property taxes are payable each year in early July.  If the seller has already paid the tax, your lawyer/notary will calculate the prorated amount owed upon closing.  This also applies to other prepaid bills, such as strata fees or utilities.

The amount of annual property taxes associated with each property can be found in the original listing from your realtor.

Home Inspection Fee

An inspection details the condition of the home & may be a condition of your offer to purchase.  Depending on the complexities of the inspection, the cost varies from $200 to upwards of $500.

Home Insurance

Because your home is security for the mortgage loan, the lender requires insurance to be in place upon closing to cover the cost of replacing your home & its contents.

Harmonized Sales Tax (HST)

Unless you are buying a brand spanking new home, HST will only apply to services related to the purchase of your home, such as appraisals, home inspections or Realtor fees.  If you are purchasing a new, never-been-lived-in home, the 12% tax will apply, less applicable rebates.

The GST New Housing Rebate will return 36% of the GST (5%) payable on the first $350,000 of the purchase price – a maximum rebate of $6,300.  Between $350,000 – $450,000, the rebate is phased out on a sliding scale & is totally eliminated above the $450,000 mark.

The PST rebate portion will return 71.43% of the provincial portion of HST (7%), up to a maximum rebate of $26,250.  Homes above the $525,000 mark will receive a flat rebate of $26,250.

Refer to the following chart for a clear breakdown of the rebates & taxes payable: