Buying costs

If you’ve decided to buy a home, it’s important to go into the process knowing all of the costs involved beyond the asking price of the property.

Here’s an overview of costs involved.

Buying costs

Mortgage application

Lenders may charge a mortgage application fee, which will vary depending on the lending institution.

Mortgage insurance

The federal government requires high-ratio mortgages (with less than 20% down payment) to be insured against default. The cost ranges between 1.25 to 3.75 per cent of the mortgage amount which is added to the mortgage principal.

Appraisal fees

Before your lender approves your mortgage, you may be required to have an appraisal done. Sometimes your lender will cover this cost, if not, you are responsible. The fee ranges and is typically as much as $300.

Land survey fees

Lenders may require a survey of the property. Survey costs vary.

Home inspection fees

A home inspection is a report on the condition of the home that can alert you to any potential issues such as structural and moisture problems, as well as electrical, plumbing, roofing and insulation. Fees can range from $500 - $700 depending on the size of the home and the complexity of the inspection. Some inspectors have surcharges for a secondary suite, a crawlspace, over even an older home.

Goods and Services Tax (GST)

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 the GST if payable on services such as appraisals and home inspections and survey fees.

Provincial Sales Tax

The PST is generally not payable on services except for legal and notary fees.  Both the GST and PST are paid on legal and notary fees.

2% BC Transition Tax

This is a new tax coming into effect on April 1, 2013. It applies to the sale of new residential homes that are 10% or more complete on April 1, 2013, with ownership or possession occurring on or after April 1, 2013 and before April 1, 2015.

Property Transfer Tax

Home buyers in BC pay a provincial Property Transfer Tax (PTT) when they buy a home. The tax is charged at a rate of 1% on the first $200,000 of the purchase price and 2% on the remainder.

First-time home buyers may be exempt from paying the PTT of 1% on the first $200,000 and 2% on the remainder of the purchase price of a home priced up to $475,000. There is a proportional exemption for between $475,000 and $500,000. At $500,000 and above the rebate is nil. Click here for more cost saving programs.

Property taxes

Some lenders require property buyers to add property tax installments to monthly mortgage payments.

Pre-paid property taxes or utility bills

A buyer typically is required to reimburse the seller for any prepayments.

Mortgage life insurance

If the owner dies, this type of insurance will pay off the balance owing on their mortgage.

Fire and liability insurance

Most lenders require property buyers to carry fire and extended coverage insurance and liability insurance.

Home insurance

Buyers will a mortgage will be required to buy home insurance. To be safe, make the insurance effective on the earlier of either the completion date or the date that you pay the balance of the funds in trust. 

Most lenders also require property buyers to carry fire and extended coverage insurance and liability insurance.

Legal or Notary Public fees

Legal or notary public fees and expenses will likely apply to assist with drafting documents and ensuring the title of the home is transferred properly and without incident. 

Moving fees

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