Buying Costs
Buying Costs
In addition to the actual costs associated with buying a home, there are some additional buying costs you will need to budget for.
They are summarized as follows:
- Provincial Land Transfer Tax (PLTT)– PTT is an unavoidable provincial tax on the transfer of all real estate British Columbia. The tax is calculated as follows:
- .5% on the first $55,000,
- 1% on the portion of the fair market value greater than $55,000 and up to and including $250,000,
- 5% on the portion of the fair market value greater than $250,000 and up to and including $400,000,
- 2% on the portion of the fair market value greater than $400,000, and
- if the property is residential, a further 2.5% on the portion of the fair market value greater than $2,000,000.
- If you are purchasing in the Municipality of Toronto there is an additional Municipal Land Transfer Tax (MLTT) that is calculated the same as the provincial tax.
- Legal fees– lawyer or notary fees will vary depending on the complexity of the transaction and are usually $1,000-$1,500 plus disbursements plus HST. Your legal representative will review your contracts, search the title, draft mortgage documents and facilitate the transfer and registration of title. Costs will vary depending on your requirements. We have a shortlist of lawyers we are able to recommend.
- Home inspection– if you choose to have an inspection, and in most cases we recommend it, costs are typically $500-$800., depending on the size of the property and complexity of the inspection. We will be pleased to advise you on the value of having a home inspection performed on your chosen property and can recommend reputable local home inspectors.
- Realtor’s commissions– when buying a home, you don’t have to worry about paying realtor’s commissions as they are usually paid by the seller. The commission is a percentage of the sale price of the home, and is split between the listing agent and the buyer’s agent.
- Appraisal– your lender may require a property appraisal at your expense. Costs vary but are typically $200-$500.
- Title Insurance – is an important consideration when buying a home, as it provides protection against any issues related to the property’s title or ownership. Essentially, title insurance is a policy that protects property owners and their lenders from any losses that may arise due to disputes over the ownership of the property, outstanding liens or judgments, or other title-related issues.
- Home Insurance– you are, of course, advised to insure your property, and if you have mortgage financing it is mandatory. This insurance should run from 12.01 a.m. on the day of completion. In the case of townhouses and condos, the building itself will be insured by the corporation but you must purchase insurance for your contents and liability.
- Property tax – property tax is levied annually and paid to the Municipality of where you are purchasing. It is determined by applying the value of the property as assessed by the Municipal Property Assessment Corporation and applied to the municipalities tax rate for your property type.
- Condominium fees– these are monthly fees that typically cover the buying costs of building insurance, building maintenance, snow removal, garbage removal, recreation facilities. Fees vary depending on the level of services provided by the condominium and are usually available on the listing data sheet.
