Buyer’s Cost Guide

Buyers

Oct 12

Nobody likes hidden costs, especially not ones tied to one of the biggest, if not THE biggest, purchases of your life.

Your deposit and mortgage comprise the bulk of the expenses you can expect to be making, but there are other fees associated with the due diligence and transfer of your property.

Fear not! This handy guide is your quickly digestible resource to understand just what you’re getting yourself into.

We’ll cover:

Property Transfer Taxes
Mortgage and Insurance Fees
Appraisal and Survey Fees
Home Inspection Fees
Legal Fees

Property Transfer Tax

Resale Housing to Two Million Dollars for resident buyers.

When a residence is purchased, a Property Transfer Tax (PTT) is applied. The tax is calculated at 1% on the first $200,000 and 2% on the remainder upto $2.0M. The First-Time Home Buyer’s Program offers an exemption to the PTT if the fair market value of the residence is $500,000 or less. In all regions, there is also a proportional exemption for first-time buyers of homes with a fair market value up to $25,000 above the thresholds. (For $1.0M homes the PPT is $18,000.00, $2.0M is $38,000.00 - see below for $3,.0M, $4.0M & link to calculator)

Residential Properties Over Two Million and Above Three Million Dollars

There is 3% tax on amounts over $2 million. The 3% tax is only paid on the amount over $2 million, not the full price. The property transfer tax on properties worth more than $3 million is an additional 2%. For example $68,000.00 is due on $3.0M homes and $118,000 on $4.0M homes. It’s $168,000 on five million dollar ones.

Estimate your property transfer tax BC Government PPT Calculator

New Construction

There is no PTT payable on the purchase of new homes up to $750,000 in value. The Buyer must be an individual, a Canadian Citizen or Permanent Resident, and located in BC. The property must be their principal residence and 0.5 hectares (1.24 acres) or smaller. There is a partial exemption for homes between $750,000 and $800,000.

Property Transfer Tax for Non-Residents

An additional property transfer tax applies to residential property transfers to foreign entities in the Central Okanagan District. An additional 20% of the fair market value of the foreign entity’s proportionate share of a residential property is due upon closing.

Mortgage and Insurance Fees

If you obtain a high-ratio mortgage (a mortgage where you pay less than a 20% down payment) you will have to buy mortgage loan insurance from CMHC or a private company. The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums. The insurance premium usually gets added to your mortgage.

Appraisal and Survey

Before your lender approves your mortgage, you may be required to have an appraisal done. Sometimes your lender covers the cost, otherwise, it will be your responsibility. The fee ranges from $150 to $350.

Home Inspection Fees

Most REALTORS® recommend that you get a home inspection by a certified home inspector. It will cost you from $350 to $650 for a smaller house; large houses may cost more. Your REALTOR® should be able to recommend a good inspector.

Legal Fees

Lawyer/notary fees for closing the sale depend on the complexity of the deal but they should range from $600 - $1,500. Disbursements to Land Titles Office — these fees are approximately $300. Your lawyer/notary will arrange the payment.