Closing Costs for Buyers in British Columbia
Great! You’ve been pre-approved for a mortgage, ready to start house hunting but…wait, how much should you allocate for closing costs?
The final purchase price of your future home is not the total amount you will paying to secure that home. It’s important to consider closing costs so you can set aside an adequate amount of money to “close” the transaction on completion day. These amounts may not seem like much but they can add up if it’s a complex transaction and the purchase price is substantial.
There are two parts to this:
1 - initial costs during the offer & subject removal process
2 - final closing costs incurred at completion
Initial costs can include:
Home Inspection $550-750
3rd Party Review of Strata Documents (eg. Condo Clear) $195 + Tax (optional)
Oil Tank Scan $100-150
Perimeter Drainage Camera Scan $500-600
Lender Appraisal $350-500
Additional Legal or Tax advice $500
Some of these costs may be incurred even before an offer is placed, if you want to go subject-free.
After you have an accepted offer, subjects are removed and deposit is paid…your lawyer/notary will prepare a final statement of adjustments. The statement of adjustments outlines the additional closing costs and balance due on the completion date.
In British Columbia typical final closing costs are:
Property Transfer Tax (PTT) which is: 1% of the fair market value up to and including $200,000 then 2% of the fair market value greater than $200,000 and up to and including $2,000,000 and 3% of the fair market value greater than $2,000,000. Any residential property over $3,000,000 will incur a further 2% tax. If you are a foreign national there is a 20% additional tax within certain areas of BC (which includes Metro Vancouver, the Fraser Valley and others, click here for full details.)
Legal Fees & Disbursements $1,400-$1,800
5% GST, if applicable (new homes or substantially renovated)
Mortgage Default Insurance, if putting less than 20% down
Title Insurance $300
Adjustments for property tax, pre-paid rent and other deposits
Home Insurance, price varies, effective on the completion date
*Please note the above amounts are only estimates and may vary. As you can see closing costs really add up depending on your individual circumstances. I would recommend having a buffer of an additional 2-4% of the final sale price to cover closing costs if you are not a foreign national.
The content provided above is for informational purposes only and should not be relied upon. All information should be verified by obtaining tax related advice from an Accountant or Tax Lawyer. Legal advice should be obtained from a lawyer. Written as of March 16, 2022.
