Here’s a list of some expenses that are incurred with any purchase:
1. General property transfer tax
1% of the fair market value up to and including $200,000. 2% of the fair market value greater than $200,000 and up to and including $2,000,000. 3% of the fair market value greater than $2,000,000.
3. British Columbia Goods and Services Tax (GST) is a 5% tax you pay on goods or services for personal use and enjoyment. Much like the GST you pay for the purchase of clothing, the same principle applies to the purchase of a new home in BC.
4. Building inspection fee. You don’t want to skimp on this one. Even if you feel you know a lot about houses, get it inspected. It could save you lots of dollars in the future if there are latent defects. Depending on the size of the property, this fee can vary. Count on paying at least $500.
5. Property appraisal. This fee is generally generated through the bank where you obtain your financing. If you are fortunate enough not to require a mortgage, you would be well advised to have an appraisal done in any case. This is an arm’s length market appraisal of the home as compared to others in the area of similar size and quality and will likely confirm the purchase price. The cost for this can be between $250.00 and $500.00 depending on the size of the home.
6. CMHC Fees. CMHC mortgage loan insurance is mandatory for all home buyers who make a down payment less than 20% of the mortgage loan value. The amount depends on the home’s purchase price:
- The maximum amortization period for CMHC backed mortgages is 25 years.
- If the home costs $500,000 or less, you’ll need a minimum down payment of 5%.
- If the home costs more than $500,000, you’ll need a minimum of 5% down on the first $500,000 and 10% on the remainder.
- For homes costing $1,000,000 or more, mortgage CMHC insurance is not available. A buyer needs to make a minimum 20% down payment to qualify for a mortgage in these circumstances.
- Mortgage Calculator | CMHC (cmhc-schl.gc.ca)
7. Notary/Lawyer Fees. These require confirmation from your legal representative, however generally you can count on between $1,700 to $2,500.00 for all fees and disbursements.
8. There will be an adjustment for the water rates and property taxes. Depending on what time of year you are purchasing the property, it will be calculated accordingly. This is often overlooked, so ensure you ask your lawyer or mortgage representative about it.
9. Home and property insurance. Insurance will be required to be in place on the completion date.
10. Utility hook ups – phone, electricity, natural gas, cable, etc.
11. Moving expenses. Okay, maybe you can get around this one if you’ve helped all your friends move in the past and are calling in favours. Though you’ll likely still have to supply the pizza and beer!