For the unprepared first-time buyer, the amount of costs involved in a real estate transaction will undoubtedly be a (bad) surprise. In order to avoid unexpected bad news, it is important to research beforehand and budget for all costs.
Below are some common costs associated with buying real estate in Vancouver.
(We have provided ranges for certain costs, which are based on our experience of buying and selling real estate in Vancouver for over a decade!)
1. MOVING COSTS
You will be responsible for the costs of moving. This includes packing supplies, movers, vehicle rentals, and ancillary expenses (food, hotels, etc.) On average, a Canadian home buyer may spend approximately $1,325 on moving costs1.
2. PROPERTY TRANSFER TAX
When a residence is purchased, a Property Transfer Tax (PTT) is applied. The tax is calculated at 1% on the first $200,000, 2% on the portion up to $2 million, and 3% on the portion above 2 million. Notably, there is an additional 15% tax for foreign buyers. However if you are a first-time buyer, you may be eligible for a PTT exemption under the First-Time Home Buyers’ Program.
3. MORTGAGE INSURANCE AND FEES
If you get a high-ratio mortgage you will have to buy mortgage loan insurance from CMHC or a private company. Consult your mortgage broker for details.
4. APPRAISAL AND SURVEY
Before your lender approves your mortgage, you may be required to have an appraisal done. The fee ranges from $250 to $350. Your lender may also require a survey of the property. If the seller did not provide you with one, you will have to pay to have one done.
5. HOME INSPECTION FEE
Most REALTORS® recommend that you get a home inspection by a certified home inspector. It will cost you from $400 to $550 for a smaller property. Large properties may cost more.
6. LEGAL FEES
Lawyers/Notaries fees for closing the sale range according to the complexity of the deal, but they should range from $1000 to $1500. There are also disbursements to the Land Title Office of approximately $300. Your lawyer/notary will arrange the payment.
7. SETTLING-IN COSTS
Once you move in, you will likely invest in your home to make it more personable. This includes furniture, cleaning, painting, minor renovations, repairs, lawncare, landscaping, and changing locks. Remember, you will also be responsible for paying for any title insurance policy premiums, and pro-rated amounts for your share of any prepaid costs, such as utility bills and property taxes. This will be arranged by your lawyer/notary.
Of course, additional fees may apply depending on the specific nature of your real estate transaction. However, these are the key common costs associated with purchasing a property in Vancouver.
Feeling a bit overwhelmed?
Feel free to reach out to us!
1ltus Group Economic Consulting, “Economic Impacts of MLS® Home Sales and Purchases in Canada and the Provinces,” The Canadian Real Estate Association, last modified May 14, 2015