Buying a home is an exciting and important life event. Especially, when you are a first time home buyer which means you will likely have many decisions to make and just as many questions that need answering. There are key costs that homebuyers will incur initially and on a continuing basis. To help inform you of what to expect, I have compiled a list of information on the varying costs that you will likely encounter for your dream home!
Most lending institutions will require at least 5% down payment towards the purchase of your home for a high-ratio mortgage. Minimum 20% of the purchase price is still required for a conventional mortgage and for non-owner occupied properties.
NOTE: Starting February 15, 2016, home buyers will now be required at least 10% down payment for the portion of the house priced between $500,000-$999,999.
NOTE: Since July 9, 2012, any high ratio mortgages that requires Canadian Mortgage Housing Insurance (CMHC) is limited to a maximum amortization period of 25 years from the previous 40 years.
- Mortgage Application Fee
- Mortgage Broker's Fee (if applicable)
- Mortgage Default Insurance Fee (if applicable)
- Life & Disability Mortgage Insurance Fee (if applicable)
- Fire & Liability Insurance Fee
- Title Insurance Fee (if applicable)
- Estoppel Certificate Fee (if applicable)
- Appraisal Fee (if applicable)
- Survey Fee (if applicable)
- Legal Fees
Property Transfer Tax (PTT)
Since 1987, the PTT is levied on all real estate transactions and must be paid before any title is transferred to the new owner at a rate of :
- 1% charged on your first $200,000.
- 2% charged on your balance up to and including $2,000,000.
- 3% charged on your balance greater than $2,000,000.
If the property is transferred without money changing hands – for
example, an inheritance, (known as an arm’s length transaction) – the
value is determined by an independent appraisal or BC Assessment
If your a first time home buyer see Exemptions.
Foreign Buyer's Tax
Effective August 2, 2016, an additional PTT charged at a rate of 15% of the fair market value applies to residential property transfers to foreign entites in Metro Vancouver.
Foreign entities are transferees that are foreign nationals, corporations or taxable trustees.
The additional tax applies on the foreign entity's proportionate share
of any applicable residential property transfer, even when the
transaction may normally be exempt from the PTT. This includes
transactions between related individuals, a transfer resulting from an
amalgamation, a transfer to a surviving joint tenant, and a transfer
where the transferee is or becomes a trustee in relation to the
property, even if the trust does not change. The 15% PTT does not apply
to trusts that are mutual fund trusts, real estate investment trusts or
specified investment flow-through trusts.
This 15% PTT applies to “Greater Vancouver Regional District” or “Metro Vancouver” municipalities.
The annual property taxes due on July 1, to the municipality will be apportioned to the previous owner & you as of the date of adjustment. If the previous owner has prepaid the taxes for the year, you will be required to reimburse a pro rata portion from the date of adjustment till the end of the year.
For more information see Property Taxes.
While not mandatory, having a home inspection performed is always advisable to give you a "peace of mind". An independent inspection can range from $350 to $1000 + HST for most single-family homes. But the cost varies depending on the home inspection company and the size of the home.
For more information see Home & Property Inspectors.
Home Insurance - Detached Homes
Standard home insurance policies provide coverage for detached homes and
content, including personal belongings. Most lenders will require you to carry
home insurance as a condition of your mortgage. The cost will vary depending on
the value of your home, its contents and your insurer. To protect your
investment, ensure home insurance coverage is made available prior to the completion
date of your purchase.
Home Insurance - Condos / Townhomes
A strata corporation provides insurance for the overall structure and common areas of a condo / townhome building as well as the original (installed by developer) permanently affixed features inside your unit including kitchen cabinetry, flooring, built-in appliances, etc.
It is recommended that you obtain content insurance to protect the replacement value of your personal belongings as the insurance purchased by the strata does not cover personal belongings. The cost of insurance will vary depending on the value of your belongings and the insurer.
Additional insurance such as Deductible, Betterment, and Rental insurance can also be considered. Ask your insurance provider for details.
Legal Fees & Disbursements
You will need the assistance of a lawyer or notary public to represent on your behalf to help protect your legal interest and assist you with the closing process of your purchase. Legal costs will depend on the complexity of the transaction, approximately $600-$1500 + HST.
- Moving Costs
- Strata / Condominium Fees
- Electricity & Gas Services
- Telephone & Cable Services
- Repair & Renovation Costs