Costs Associated with Buying Real Estate in Vancouver

In addition to the actual purchase price of your property there will be some additional costs. They are summarized as follows:

Property Transfer Tax

The First Time Buyer Program provides a tax exemption from Property Transfer Tax for individuals buying their first home. Buyers who meet the following conditions will be eligible for the exemption.

You qualify for the exemption, if:

you are a Canadian Citizen, or a permanent resident as determined by Immigration Canada, If the property does not meet all of these requirements, you may still qualify for a partial exemption.

you have lived in British Columbia for 12 consecutive months immediately before the date you register the property, or you    have filed 2 income tax returns as a British Columbia resident during the 6 years before the date you register the property.

you have never owned an interest in a principal residence anywhere in the world at anytime, and

you have never received a first time home buyer’s exemption or refund.

The property you purchase qualifies, if:

• the fair market value of the property is not more than the current threshold of $425,000

• the land is 0.5 hectares (1.24 acres) or smaller

• the property will only be used as your principal residence

Property Transfer Tax is an unavoidable provincial tax on the transfer of all real estate British Columbia. The tax is calculated as follows: 1% on the first $200,000 and 2% on the remainder of the purchase price. This tax is payable at the time of purchase/conveyance and is usually included on the Buyer’s statement of adjustments by the Buyer’s lawyer or notary.

If the property does not meet all of these requirements, you may still qualify for a partial exemption.

*** Note:  You should consult a lawyer or notary regarding your qualification for the PTT exemption. ***

HST

The Dreaded (Harmonized Sales Tax) is 12% on new construction and substantially renovated properties. HST is sometimes included in the list price as an incentive to buyers. Buyers of new properties costing $525,000 or less can apply for a partial HST rebate as follows:

The rebate rate was set to ensure purchasers of eligible new homes up to the $525,000 threshold pay no more provincial HST on average than under the PST.

Rebate Rate: (7% BC HST minus 2% embedded BC PST) /7% BC HST

Rebate Rate: (5/7 = 71.43% of provincial portion of HST paid, to a maximum of $26,250.

For more details on HST, please visit Revenue Canada’s website.

Realtors Commissions

Unless you have entered into a separate agreement to pay commissions to your Buyer’s Agent you won’t pay realtor’s commissions on your purchase. Commissions are paid by the seller.

Appraisal

Your lender may require a property appraisal at your expense. Costs vary $150 – $300.

Site Survey (not typically done for condos)

Your lender may require an up-to-date survey. If the Seller does not have one, you may have to absorb the costs to have one done.

Legal Fees

Lawyer or notary fees will vary depending on the complexity of the transaction and are often $600 – $1500 plus disbursements plus HST.  Your legal representative will review your contracts, search the title, draft mortgage documents and facilitate the transfer and registration of  title. Costs will vary depending on your requirements.

Home Inspection

If you choose to have an inspection, costs are typically $250 – $500, depending on the size of the property and complexity of the inspection. It is a very good idea to have an inspection done when buying detached housing and post-warranty condominiums. It’s less critical to have an inspection on a brand new condo under warranty. We will be pleased to advise you on the value of having a home inspection performed on your chosen property and we’ll be pleased to recommend a good Inspector.

Insurance

You are well advised to insure your property. As per the standard contract of Purchase and Sale, the purchaser is responsible to insure the property as of the date of possession. If you are buying a condo, it’s critical that you get condo residents “contents insurance”.  The condo building itself will be insured by the strata (Home Owner’s Association) but you must purchase insurance for your contents and liability. Fees vary.