Did You Know There Are Home Purchasing Costs In Addition To The Mortgage?
Here is a list of costs you will need to cover in order to complete your real estate transaction:
A deposit should be approximately 5% of the offered price and is generally paid to the real estate company In Trust via a bank draft at or within 24 hours of final subject removal.
BC Property Purchase Tax
1% on the first $200,000 of the property value and 2% on the balance over $200,000
*(First Time Home Buyers are exempt from this tax up to $475,000 and a proportional exception up to $500,000, with some limitations)*
+ / – $1000 (purchasing)
+ / – $1800 (purchasing and selling)
If the current owners have already paid the full year’s property taxes to the Municipality, you will have to reimburse them for your share of the year’s taxes. If taxes have not been paid, the seller will have to reimburse you for their share of the year’s taxes.
A home inspection is a thorough visual assessment of a home conducted by a certified home inspector. A good inspection will include a check on the operation of the plumbing, heating, air conditioning, electrical, and appliance systems, as well as the observation of structural components: roof, foundation, basement, exterior and interior walls, chimney, doors and windows. A written report with pictures, comments and repair suggestions will be provided. Costs for this service can vary; I can refer you to several qualified home inspectors for quotes.
When your financial institution requires an appraisal of the property before approving your loan, it may be your responsibility to pay the appraiser’s fee.
Your financial institution may also require that a SURVEY CERTIFICATE be presented to them. The purpose of the survey is to formally establish the boundaries of the property and to ensure that all buildings are within those boundaries. If the current owner cannot provide a recent survey certificate, it will be your responsibility to pay the surveyor’s fee.
Mortgage Application Fee
Financial institutions may charge a mortgage application fee.
Mortgage Default Insurance
This type of insurance is required on all mortgage loans in excess of 80% of the appraised property value. The purpose is to insure that the lender will not lose any money if you cannot make your mortgage payments and the value of your property is not sufficient to repay your mortgage debt. The insurance premium is paid to the lender and ranges from .5% to 7% of the loan value (in most cases, this premium is added to the loan amount and paid for over the term of the loan).
GST (Goods & Services Tax)
If purchasing NEW construction, GST may be applicable. The amount of GST paid on real estate transactions in BC can vary substantially. Your REALTOR® will be able to clarify and compute the amount of GST required and how much of a rebate you may qualify for.
These home purchasing costs are for information purposes only and are approximations that are subject to change.