As a first time home buyer in British Columbia, it’s important to understand the various costs associated with purchasing a home, including closing costs. In this blog, we’ll break down the different types of closing costs that you may encounter in British Columbia.
Legal Fees:
You’ll need to hire a lawyer or Notary to complete the sale, and they will charge a fee for their services. Legal fees can vary depending on the complexity of the sale, but you should expect to pay anywhere from $500 to $1500 for this service.
Property Transfer Tax:
In British Columbia, the Property Transfer Tax (PTT) is a tax that must be paid by the buyer when a property is purchased. The tax is based on the purchase price of the home, and is calculated as follows:
- 1% on the first $200,000 of the purchase price
- 2% on the portion of the purchase price between $200,000 and $2 million
- 3% on the portion of the purchase price over $2 million
For example, if you purchase a home for $500,000, you would pay $8,000 in PTT. As a first time home buyer you may be exempt from Property transfer tax.
Home Inspection:
Before you purchase a home, it’s important to have it inspected by a professional. This will ensure that there are no major issues with the home that could end up costing you money down the road. The cost of a home inspection can vary, but you should expect to pay around $500.
Title Insurance:
Title insurance is an insurance policy that protects you against any defects in the title of the property. This can include things like fraud, forgery, and encroachments. The cost of title insurance can vary, but you should expect to pay around $250-$500.
Appraisal Fees:
If you’re getting a mortgage to purchase your home, your lender will may require an appraisal. An appraisal is an assessment of the value of the home, and ensures that the property is worth what you’re paying for it. The cost of an appraisal can vary, but you should expect to pay around $250-$500.
Adjustments:
When buying a home, there may be some adjustments that need to be made between you and the seller. This could include things like property taxes or utilities that have already been paid for. These adjustments will be calculated by your lawyer, and you may need to pay your portion of the costs at closing.
Ready to take the next step in your home buying journey? Contact us today to learn more about how we can help you navigate the closing costs and make your dream of homeownership a reality. We’re here to guide you through every step of the process.
