{"id":816,"date":"2017-01-15T00:57:48","date_gmt":"2017-01-15T00:57:48","guid":{"rendered":"http:\/\/www.chrisbrownrealestate.ca\/blog\/?p=816"},"modified":"2017-01-15T00:58:50","modified_gmt":"2017-01-15T00:58:50","slug":"costs-to-consider-when-buying-a-home-in-b-c","status":"publish","type":"post","link":"https:\/\/www.chrisbrownrealestate.ca\/blog\/costs-to-consider-when-buying-a-home-in-b-c\/","title":{"rendered":"Costs to consider when buying a home in B.C."},"content":{"rendered":"

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I<\/span>f you\u2019ve decided to buy a home, it\u2019s important you understand all the costs involved in addition to the price you’re paying for the property.<\/p>\n

Here\u2019s an overview.<\/p>\n

Buying costs<\/strong><\/h2>\n

Mortgage<\/dfn> application<\/strong><\/h4>\n

Lenders may charge a mortgage application fee, which will vary depending on the lending institution.<\/p>\n

Mortgage insurance<\/dfn><\/strong><\/h4>\n

The federal government requires high-ratio mortgages with less than 20 per cent\u00a0down payment<\/dfn> to be insured against default. The cost ranges between 0.60 to 3.85 per cent<\/strong> <\/a>of the mortgage amount which is added to the mortgage principal<\/dfn>.<\/p>\n

As of February 15, 2016, the federal government requires a 10 per cent down payment requirement on homes valued at $500,000 – $1 million, that need mortgage insurance. Homes valued at $1 million+ require a minimum down payment of 20 per cent. Mortgage insurance is not available for homes in this price range. Learn more<\/a><\/p>\n

Appraisal<\/dfn> fees<\/strong><\/h4>\n

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.<\/p>\n

Land survey fees<\/strong><\/h4>\n

Lenders may require a survey of the property. The fee ranges and is typically $500 plus GST.<\/p>\n

Home inspection fees<\/strong><\/h4>\n

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\u00a0$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\u00a0a secondary suite, a crawlspace, or a laneway home.<\/p>\n

Goods and Services Tax (GST)<\/strong><\/h4>\n

The GST\u00a0on a new home is 5% of the price.\u00a0A 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.<\/p>\n

Buyers also pay the GST on fees for services from appraisers, home inspectors, lawyers, Notary Publics and REALTORS\u00ae<\/dfn>.<\/p>\n

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Provincial Sales Tax<\/strong><\/h4>\n

The PST is generally not payable on services except for legal and notary fees.\u00a0 Both the GST and PST are paid on legal and notary fees.<\/p>\n

Property Transfer Tax<\/strong><\/h4>\n

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\u00a0$2 million. The PTT is 3% on amounts greater than $2 million..<\/p>\n

Qualifying first-time home buyers<\/strong> may be exempt from paying the PTT\u00a0if the purchase price of their home is priced\u00a0up to $475,000. There is a proportional exemption for homes priced between $475,000 and $500,000. At $500,000 and above the rebate is nil.<\/p>\n

Qualifying buyers of new homes<\/a><\/strong> 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.<\/p>\n

Click here for the Property Transfer Tax fact sheet<\/a>.<\/p>\n

Click here for more cost saving programs<\/a><\/strong>.<\/p>\n

Adjustments<\/strong> (see details in the Contract of Purchase and Sale)<\/h4>\n

Property taxes
\n<\/strong>Depending on the Contract of Purchase and Sale, a property buyer will likely be required to reimburse the seller for any prepaid property taxes. The lender may require the buyer to add property tax installments to monthly mortgage payments. See also Why do I have to pay property taxes on the house I’m buying<\/strong><\/a>.<\/p>\n

Utility bills
\n<\/strong>A buyer is\u00a0typically\u00a0required to reimburse the seller for any prepayments for municipal swer and water fees.<\/p>\n

Rent and security deposits<\/strong>
\nIf there is a secondary suite or a laneway home rental and the tenancy continues, the buyer receives the security deposit from the seller with accrued interest<\/dfn> because the buyer is responsible for reimbursement when the tenant leaves.<\/p>\n

Mortgage life insurance<\/dfn><\/strong><\/h4>\n

If the owner dies, this type of insurance will pay off the balance owing on their mortgage.<\/p>\n

Fire and liability insurance<\/strong><\/h4>\n

Most lenders require property buyers to carry fire and extended coverage insurance and liability insurance.<\/p>\n

Home insurance<\/strong><\/h4>\n

Lenders typically require home buyers with a mortgage to buy home insurance. The insurance should be effective on the earlier of either the completion date or the date that the balance of funds is placed in trust.<\/p>\n

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Legal or Notary Public fees<\/strong><\/h4>\n

Buyers typically hire a lawyer or Notary Public to assist with drafting documents and ensuring the title<\/dfn> of the home is properly transferred. Likely fees include a:<\/p>\n