Buying Real Estate: The Costs

Buying Real Estate: The Costs

 

Buying Real Estate: The Costs

Please note all figures quoted below are subject to change without notice.

Brief summary of purchasing cost

Initial costs

Down payment

(20% of purchase price average)

Property transfer tax

This tax is 1% on the first $200,000 of the sale price and 2% on the remainder. First-time buyers may be exempt from paying this tax.

Lawyer or notary fees

 Lawyers/Notaries will cost you approximately $850 and up for a purchase transaction, and $550 and up for a sale transaction.

CMHC fees

If you get 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 insurance premium usually gets added to your mortgage. (CMHC Premium Calculator)

Please refer this link for details http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_005.cfm

Home inspection

Most REALTORS@ recommend that you get a  a certified home inspector for home inspection. The cost is ranging from $300 to $500 for a smaller house.  And it costs more for bigger house.

Mortgage application

You will also have to pay an application fee. CMHC’s standard fee is $235. CMHC also offers a basic service for a $75 fee but it must be accompanied by an appraisal.

Survey

Your lender may require an up-to-date survey of the property. If the seller did not provide you with one, you will have to pay to have one done. The fee ranges from $150 to $350. Surveys are not necessary if the purchaser is buying a strata property. Ask about Title Insurance as an alternative.

Appraisal fees

Before your lender approves your mortgage, you may be required to have an appraisal done. Sometimes your lender covers this cost otherwise you are responsible for covering this cost. The fee ranges from $150 to $350.

HST

HST of 12% (5% federal component plus 7% provincial component) will apply to new residential housing.

The rebate is 71.43 per cent of the provincial portion of the HST, up to a maximum rebate of $26,250.  Purchasers of eligible new homes above $525,000 are eligible for a rebate of $26,250 (i.e. a rebate on the first $525,000 of value).

The HST only applies to “new” residential housing; “used” or resale (i.e., previously occupied) residential housing is not subject to HST.

For details, please refer to http://www.hstinbc.ca/making_your_choice/faqs/new_housing_rebate/

Prepaid property taxes or utility bills

You will have to reimburse the sellers for any prepaid property taxes or utilities. Generally property taxes for the calendar year are paid at the beginning of July. If you purchase a property before July 1st, the seller will be paying you for the days they owned the home after January 1st. If you purchase a property after July 1st, you will pay the seller for the days you own the property before December 31st.

Moving expenses

Monthly payments

Mortgage payment 

Your mortgage payments are calculated based on the amortization period, interest rates and amount of the loan. Larger payment amounts mean a shorter amortization period and usually a lower interest rate.

Strata fees (if applicable)

A strata title building is a multi-suite building or multi-residence complex, where all the units are owned by the individual owners. There are shared costs for common area expenses and building maintenance & repairs, which are paid for out of a common pool of money, funded by the stata fees.

Hydro and gas

Electricity and Natural Gas

Yearly expenses

Property taxes 

Property taxes is paid once a year in most cities. The amount of tax you will have to pay will depend on the assessed value of your property.

Home insurance

All homes must have sufficient insurance coverage against fire, other risks or loss, theft and liability before the financial institution will lend you money. These rates  can be varied depending on coverage options so please consult your insurance broker or general insurance specialist for more details.