Your down payment isn’t the only cash you’ll need on completion day. The Financial Consumer Agency of Canada suggests budgeting 1.5% to 4% of the purchase price for closing costs, and in British Columbia the property transfer tax alone can be more than that. Here’s every cost to plan for when you buy a home in BC, so none of them is a surprise.
Property transfer tax
The largest closing cost for most buyers: 1% on the first $200,000, 2% up to $2,000,000, 3% above that, and a further 2% on the residential portion above $3,000,000. On a $2,500,000 home, that’s $53,000. First-time buyers and buyers of new homes may be exempt in part or in full. The rules and examples are in Property Transfer Tax in BC, explained.
Legal or notary fees
A lawyer or notary registers your purchase and your mortgage, pays the seller and the transfer tax, and handles the funds. Their fee is usually quoted as a flat amount plus disbursements (title searches, registration fees, courier charges) and taxes. Get a quote early.
Adjustments
On completion, costs that cover the period before and after you take ownership are divided between you and the seller. If the seller has prepaid the year’s property taxes, you reimburse them for the days after completion. Strata fees and some utilities are adjusted the same way. Your lawyer or notary prepares the statement of adjustments, and you’ll see the final number a few days before completion.
Before you remove subjects
- Home inspection. Paid when the inspection is done. See Reading a home inspection on the North Shore.
- Specialist inspections, if needed: a drain camera, an oil tank scan, a structural or geotechnical engineer.
- Appraisal, if your lender charges for it.
- Strata documents, for a condo or townhome. There’s a fee for the Form B information certificate and copies of records. See Strata documents, decoded.
Mortgage costs
- Mortgage default insurance. With less than 20% down, your mortgage must be insured. The premium is a one-time charge, a percentage of the loan, that’s usually added to the mortgage rather than paid in cash. CMHC’s standard premiums range from 2.80% of the loan with 15% down to 4.00% with 5% down, and longer amortizations can add a surcharge. Unlike Ontario, Quebec and Saskatchewan, BC doesn’t charge sales tax on the premium.
- Lender fees, if any, and any cost to break or transfer a mortgage you already have.
Title insurance
BC’s land title system guarantees title in most cases, so title insurance is less common here than in the United States. Some lenders require it, and it can cover some risks a title search won’t show. Your lawyer or notary will tell you whether your lender requires it and what it costs.
Buying a new home
- GST of 5% applies to newly built homes. First-time buyers may qualify for the rebate on homes up to $1,500,000. See Every first-time buyer program in BC.
- Deposits are paid in stages for a presale. See Buying a presale in BC.
Moving in
- Home insurance, in place from completion; your lender will require proof.
- Movers, utility connections and any immediate repairs the inspection identified.
- Strata move-in fee, if your strata’s bylaws set one.
A sample budget
For a $2,500,000 house with 20% down, before any exemptions: property transfer tax of $53,000, plus legal fees, an inspection, adjustments, insurance and moving. Expect closing costs of roughly $60,000 or more, in addition to the $500,000 down payment.
Questions people ask
Can closing costs be added to my mortgage?
Generally, no. The mortgage insurance premium can be added to an insured mortgage, but most other closing costs must be paid in cash.
When do I pay them?
Inspection and appraisal fees are paid before subject removal. Most of the rest, including the transfer tax, legal fees and adjustments, is paid through your lawyer or notary a day or two before completion.
Does the seller pay any of these?
The seller pays their own costs, such as commission, their legal fees and any mortgage penalty. See What it really costs to sell a home in BC.
General information for buyers in British Columbia, current as of publication. Your costs depend on your purchase, lender and lawyer or notary; get quotes early.