WHAT ARE THE TYPICAL COSTS OF BUYING A HOME?

If you’ve decided to buy a home, it’s important you understand all the costs involved in addition to the price you're paying for the property.

Mortgage Application
Lenders may charge a mortgage application fee, which will vary depending on the lending institution.

Mortgage Insurance
The federal government requires high-ratio mortgages with less than 20% down payment to be insured against default. The cost ranges between 0.60 to 4.50 per cent of the mortgage amount which is added to the mortgage principal.

The federal government requires the following minimum downpayments:

- Properties under $500,000: 5% downpayment on homes under $500,000
- Properties between $500,000 and $ 1 Million: 5% of the first $500,000, and 10% of the portion between $500,000 and $1 Million
- Properties over $1 Million: 20% downpayment 5%of the first $500,000 of the purchase price (Mortgage insurance is not available for homes in this price range.) 

Appraisal Fees
Before your lender approves your mortgage, you may be required to have the property appraised. Sometimes your lender will cover this cost. If not, you're responsible. The fee ranges from $300 to $450 plus GST.

Land Survey Fees
Lenders may require a survey of the property. The fee ranges and is typically $500 plus GST.

Home Inspection Fees
A home inspection is a report on the condition of the home and includes structural and moisture problems, as well as electrical, plumbing, roofing and insulation. The fees range and is typically $500-$900 depending on the size of the home and the complexity of the inspection. Some inspectors also charge an additional fee for an older home or a home with a secondary suite, a crawlspace, or a laneway home.

Goods and Services Tax (GST)
The GST on a new home is 5% of the price. A GST rebate equivalent to 36% of the GST paid is available for new homes priced up to $350,000 and a partial rebate on new homes priced up to $450,000.

Buyers also pay the GST on fees for services from appraisers, home inspectors, lawyers, Notary Publics and REALTORS®.

Provincial Sales Tax
The PST is generally not payable on services except for legal and notary fees. Both the GST and PST are paid on legal and notary fees.

Property Transfer Tax
Home buyers in BC pay a provincial Property Transfer Tax (PTT) when they buy a home. The tax is charged at a rate of 1% on the first $200,000 of the purchase price and 2% on the remainder up to and including $2 million. The PTT is 3% on amounts greater than $2 million. If the property is residential, a further 2% PTT is payable on the portion greater than $3 million.

Qualifying first-time home buyers may be exempt from paying the PTT if the purchase price of their home is priced up to $500,000. There is a proportional exemption for homes priced between $500,000 and $525,000. At $525,000 and above the rebate is nil.

Qualifying buyers of new homes may be exempt if the purchase price of their home is priced up to $750,000. There is a proportional exemption for homes priced between $750,000 and $800,000. At $800,000 and above there's no rebate.

Property Taxes
After the tax due date (most lower mainland areas taxes are due on the 1st business day in July) you will be required to pay a portion of the taxes for the balance of the year. This also applies to utilities (water, sewer & garbage) if they are billed separately from the property taxes.

Other Misc Costs
The other costs once you have purchased your home:
- Mortgage Payment
- Property Taxes
- Servicing
- Maintenance or Repair your home
- Homeowner's Insurance
- Utility Service charges (Cable, Telephone Services, Electricity, Gas Services, and Water)
- Strata maintenance Fees (For Strata Homeowner)
- Mortgage/Fire/Home Insurance
- Legal or Notary Public fees
- Moving fees