Besides the minimum 5% down payment, there are a few other costs involved when purchasing real estate. The following costs are approximate and may vary with your specific real estate transaction.
• Property Transfer Tax
1% on the first $200,000 and 2% on the balance. First time buyers may be exempt from paying this tax if the purchase price in the Vancouver and Fraser Valley areas does not exceed $425,000.
If you are buying a newly built home you must pay the 5% GST. However, if your home is less than $500,000 you may be eligible for a rebate. GST is not payable on resale housing unless there have been substantial renovations.
• Mortgage Default Insurance and Application Fee
If you get a high-ratio mortgage (less than 20%) down, you must buy mortgage default insurance from CMHC or a private company. An insurance fee will be charged that varies according to the amount of the down payment (5%,10%,15%). This insurance premium is usually added to the mortgage. You will also have to pay an application fee which may vary from $165-$235.
• Appraisal Fee
Your mortgage lender may require an appraisal of the property. This can vary from $150-$350 depending on the location and type of the property. Some lenders may cover this cost, otherwise you are responsible for the fee.
• Survey Certificate
Your lender may require a survey of the property which can cost approximately $350. This is usually required for all high- ratio mortgages and some conventional mortgages. If the Seller can provide you with a survey certificate, this may be satisfactory for the lender. Surveys are not required for strata properties.
• Property Inspection
Most realtors will recommend that you include a property inspection as a subject in your offer. Costs may vary from $375-$500 with larger homes costing more.
• Property Insurance
Lenders will require fire insurance for all properties except strata properties which include this insurance as part of their operating budget. It is recommended that new owners begin their insurance coverage from the completion/closing date.
• Prepaid Property Taxes or Utilities
You must reimburse the Sellers for any prepaid taxes or utilities. These costs appear in the Statement of Adjustments prepared by your lawyer/notary.
• Legal Fees
Lawyers/notaries’ fees vary according to the complexity of the real estate transaction. Strata and leasehold properties are more complex. Fees may vary from $500 for a simple transaction to $1500.
This may include fees to the Land Titles Office etc. These fees may be approximately $300 and will appear on the Statement of Adjustments prepared by your lawyer/notary.