Purchasing a home is a significant milestone and investment, particularly in British Columbia, where the real estate market is vibrant and dynamic. While it’s easy to get caught up in the excitement of owning a home, it's crucial to be aware of the various costs involved beyond the purchase price. Here, I’ll take you through all the major expenses associated with purchasing a home in BC so there will be no surprises once you get that offer accepted.
A typical deposit is 5% of the purchase price and is usually paid out immediately after an offer is accepted or after subject removal if the offer is conditional. If you are using a mortgage to purchase your property, the deposit forms a part of the down payment.
Inspection:
Most likely, you are going to want to do an inspection to make sure the home is sound and that there are no major repairs needed. A home inspection will cost anywhere from $500 to $800 depending on the property.
Your lender may require an appraisal to confirm the property's value, which generally costs between $300 and $500.
Engaging a lawyer or notary to handle the legal aspects of the transaction usually costs between $1,000 and $2,500.
Property taxes are typically paid on July 1st for the whole year. If the seller has already paid the full year's property taxes, the buyer will reimburse the seller for the portion of the year after the closing date. Conversely, if the property taxes have not yet been paid, the seller will owe the buyer for the period before the closing date.
This is a big one. In BC, property transfer tax is calculated as 1% on the first $200,000 of the purchase price, 2% on the portion between $200,000 and $2,000,000, and 3% on the portion above $2,000,000, and if the property is residential, a further 2% on the portion of the fair market value greater than $3,000,000. Some exemptions may be available for first-time homebuyers.
If you are planning on purchasing a newly built home (a pre-sale condo for example) you are going to have to pay 5% GST on the purchase price. There are potential rebates available depending on the home and your specific situation.
Buying a home in British Columbia is a major financial undertaking that requires careful planning and budgeting. By understanding and preparing for the various costs associated with homeownership, you can navigate the process with greater confidence and peace of mind.
Do you have questions or need help finding your dream home? Feel free to reach out! I'm here to make your home-buying journey as smooth and enjoyable as possible. Happy house hunting!
Deposit:
A typical deposit is 5% of the purchase price and is usually paid out immediately after an offer is accepted or after subject removal if the offer is conditional. If you are using a mortgage to purchase your property, the deposit forms a part of the down payment.
Inspection:
Most likely, you are going to want to do an inspection to make sure the home is sound and that there are no major repairs needed. A home inspection will cost anywhere from $500 to $800 depending on the property.
Appraisal Fee:
Your lender may require an appraisal to confirm the property's value, which generally costs between $300 and $500.
Legal Fees:
Engaging a lawyer or notary to handle the legal aspects of the transaction usually costs between $1,000 and $2,500.
Property Tax Adjustment:
Property taxes are typically paid on July 1st for the whole year. If the seller has already paid the full year's property taxes, the buyer will reimburse the seller for the portion of the year after the closing date. Conversely, if the property taxes have not yet been paid, the seller will owe the buyer for the period before the closing date.
Property Transfer Tax:
This is a big one. In BC, property transfer tax is calculated as 1% on the first $200,000 of the purchase price, 2% on the portion between $200,000 and $2,000,000, and 3% on the portion above $2,000,000, and if the property is residential, a further 2% on the portion of the fair market value greater than $3,000,000. Some exemptions may be available for first-time homebuyers.
GST:
If you are planning on purchasing a newly built home (a pre-sale condo for example) you are going to have to pay 5% GST on the purchase price. There are potential rebates available depending on the home and your specific situation.
Buying a home in British Columbia is a major financial undertaking that requires careful planning and budgeting. By understanding and preparing for the various costs associated with homeownership, you can navigate the process with greater confidence and peace of mind.
Do you have questions or need help finding your dream home? Feel free to reach out! I'm here to make your home-buying journey as smooth and enjoyable as possible. Happy house hunting!