Be informed! Aside from the purchase price of the property, there are a few other costs to keep in mind. It's better to be aware of these costs ahead of time so you can plan accordingly. So what exactly do you need to pay? What is a down payment? What are "closing costs"?
Read on ahead, and if you have any questions:
This is the initial payment towards the purchase of a property. The down payment amount varies and is often based on the mortgage requirements. Insurance is required from CMHC if a down payment is under 20% for a personal residence or 35% for an investment property.
property transfer tax
This is the tax associated with buying and selling property in British Columbia. This amount is equivalent to 1% on the first $200,000 and 2% on the balance of the property purchase price. A rebate may be applicable, please ask for more details.
Government sales tax
GST applies to new developments and substantially rebuilt property, and is a 5% tax of the property purchase price. A rebate may be applicable, please ask for more details.
lawyer/notary fees (CONVEYANCING & DISBURSEMENTS)
This amount covers the transfer of ownership to you in exchange for funds, the registration of the title and property insurance under the new owner (you). You should budget approximately $1300 for legal fees.
The "Adjustment Date" usually lines up with the possession date of buying a property. Adjustments are made at the lawyer or notary office and are the reimbursement of city taxes, utility bills, and strata fees that the seller may have pre-paid beyond the adjustment date.
Although optional, it is recommended that you have an inspection report completed prior to finalizing the purchase of a home. Having a licensed inspector scrutinize the home you are considering can provide valuable information that will protect you against buying a lemon. A professional inspection costs about $400.
strata move-in fees
Most stratas require a move-in fee for elevator booking and protection when getting yourself settled in. These fees are typically $50-$200 depending on the bylaws of the strata you have purchased into.
A home purchase involves more than just the purchase price. Avoid surprises and learn about closing costs here.