Closing Costs when Buying a Home in BC [2024]

So, you’re getting ready to buy, maybe you’re beginning to look online at homes, and get some rough numbers together.

Well, one major area you’ll need to consider in your home purchase is the closing costs associated with a property once the offer closes. Many buyers (36%) also incurred unexpected expenses during their home buying process.

This guide will help you understand what they are, what you should budget for in British Columbia, and other costs often associated with buying and moving. So you don’t have unexpected expenses!

Let’s dive in.

Closing Costs at a High Level

In BC it’s expected that closing costs range from 1.5% to 3.5% of the purchase price of the home. This covers costs like property transfer taxes, pro-rated utility bills, legal fees, title insurance, and other necessary fees associated with purchasing in BC.

It’s also important to know that closing costs aren’t a part of the down payment. A good mortgage broker will work with you to make sure you have money for closing costs. With average home prices in BC around $940,000, this could be an additional $14,000 to $33,000 in additional costs to cover.

Recommended Reading: What Happens on Closing Day When Buying a Home?

Top Unexpected Costs when Buying

Source

Common Closing Costs in BC

We’ll review the main closing costs associated with purchasing a house, townhome, or condo unit in BC. Many of these closing costs are on the Statement of Adjustments.

Property Transfer Tax (PTT)

Property Transfer Tax (PTT) is charged on all residential property transactions in BC, so it applies when you purchase a home. The name implies its use, a tax when property is transferred.

The amount of PTT one pays when buying a property depends on the property value:

1% on the first $200,000 of the property’s value.
2% on the portion between $200,000 and $2,000,000.
3% on the portion from $2,000,000 to $3,000,000.
5% on the portion over $3,000,000.

Let’s say you’re buying a home worth $1,650,000. It’s a beautiful detached house in Burnaby. Here is the breakdown of what that may cost you:

1% of the fair market value up to and including $200,000: $2,000
2% of the fair market value greater than $200,000 up to and including $2,000,000: $29,000

Total of $31,000 in PTT.

Check out the BC Governments PTT Calculator and Estimator.

First Time Home Buyers Program

While so many homes in BC have high property values, this does mean high taxes to pay. Luckily, if you’re a first time home buyer, you may be eligible for full or partial exemption of the PTT.

If you meet the eligibility criteria, and the property’s fair market value is $835,000 or less, the first-time home buyer is exempt on the first $500,000 of property taxes. Learn more about programs for first time home buyers in BC.

There are also exemptions for new homes and other items, too.

Notary or Real Estate Lawyer Fees

For any real estate transaction in BC, you’ll need a notary or lawyer to complete the legal documentation for transferring the property title, managing mortgage registrations, and finalising the Statement of Adjustments.

Typically, the cost for this depends on the company and service they offer, but ranges from $650 for a Notary and up to $1,500 or more if a lawyer is used on a complex transaction. And is only a one-time fee. If there are additional complexities or special circumstances, this could cost more.

Home or Condo Inspection

A home or condo inspection is typically recommended when buying a home. This will help you identify if there are any issues within the home that are of concern or may compromise the deal.

Costs typically range from $400 to $700 in BC as a one-time fee, depending on the size and extent of the inspection. For a condo, expect to pay roughly $450 to $500 within the Lower Mainland.

A home inspector will look into areas such as the roof, plumbing, electrical systems, and structural components, to identify potential issues. However, they cannot inspect hidden areas, like behind walls, or test for specialised concerns such as mold, asbestos, or pests. For these, additional inspections by specialists may be needed.

When making an offer on a home, this is typically added to the Contract of Purchase and Sale as a condition of purchase, called a “Subject to Inspection”.

We’re happy to make those connections when you work with us to buy a home.

Condo Document Review

In some instances, you may want additional help or professional advice on condo documents, if you’re buying into a condo and strata. While a reputable REALTOR, like Daniel John at Metro Vancouver Life, should be helping you review Condo Documents, sometimes you may want to pay for that extra service.

These documents include meeting minutes, financial reports, bylaws, and the depreciation report, which outline the property’s condition and any potential financial liabilities.

The cost for condo document review ranges from a one-time fee of $125 to $250 in BC, depending on the complexity and number of documents.

There are also cool AI tools that can help automate this, like Eli Report, a condo document review tool that buyers can use.

Title Insurance

Title insurance is purchased by nearly every home buyer, since most have a mortgage on the property and a lender will require it.

Premiums typically range from $200 to $400 in BC and are paid once at the time of purchase.

Title insurance protects you and your lender from potential issues with the property’s title, such as liens, fraud, or zoning violations that might not be discovered during the standard legal review.

Mortgage Insurance

If you’re a buyer putting less than a 20% down payment on the property in BC, you’re going to be required to purchase mortgage default insurance. This is designed to provide insurance to the lender that if you default, there is protection.

The insurance premium is a percentage of the mortgage amount and is typically between 0.6% and 6.3%, depending on the down payment size.

This closing cost is actually paid with your mortgage balance instead of an upfront cost, like many of the other closing costs.

Home Insurance

Home insurance or condo insurance can range from $900 to $2,000 per year, depending on the property’s insured valuable, other personal property, and other building improvements details.

Insurance is also required when finalising the mortgage on the property and will require proof or your official confirmation you have insurance. There are several different providers across BC, so be sure to shop around and find a provider that works best for you.

Property Tax, Utilities & Other Adjustments

On top of the PTT, there is also Property Tax that may be owed to the municipality you’re purchasing in, depending on the purchase date and if those fees have been paid already.

There are also fees like Utility bills and strata fees to also take into consideration. These additional adjustments can range from $1,000 to $3,000, on average.

Buying Brand New

Goods and Services Tax (GST)

The GST on a new home is 5% of the purchase price. You can get a rebate of 36% of the GST paid for new homes priced up to $350,000, with a smaller rebate available for homes priced between $350,000 and $450,000. However, that is hard to obtain with home prices in BC well exceeding that.

Other Costs That Arise Outside of Closing Costs

While these other costs are technically not a part of Closing Costs, these are costs you’ll need to budget for when buying a property.

Moving Costs

When it comes to moving costs, this is very dependent on the individual and their circumstances and preferences. If you can afford it, it’s probably wise to hire a moving company, which can range from $500 to $2,500, depending on the distance, amount of stuff, and services needed.

When buying a home, we can appreciate the costs associated with this big lifetime investment, so getting help from friends and family is always a great way to save money.

Strata or Condo Corporation Fees

If you’re buying into a condo and have strata corporation fees to pay, make sure you budget ahead for the first month. While any current monthly fees should be situated in the Statement of Adjustments, you’ll want me to budget to have those strata fees ready for the following month.

Required Home Upgrades

Sometimes when you buy, you’re buying a home that may need some immediate updates. Or there will be cosmetic upgrades or appliance changes you’d like to make. If any of these project types are to be done after you buy, make sure you budget for this before you complete the purchase. That way, any required upgrades or nice-to-have upgrades like new appliances are budgeted.

Mail Forwarding

We highly recommend setting up mail forwarding when buying a property and moving in. This costs around $100, depending on the timeframe and is well worth the money if you have any important information coming via mail. This will also help prevent missing any important mail.

Internet Relocation Costs

Sometimes your internet provider, like Telus or Rogers, may charge a relocation fee, depending on your current setup and what’s required in your new home. This should generally be less than $100. Some may do this for free, but be sure to check.

If you’re currently renting and it’s included in your monthly rent bill, you’ll want to make sure you budget for this additional on-going expense.

Mortgage Life Insurance

While not always mandatory from your lender, getting life insurance can help ease the burden of losing a spouse or partner if they have to then carry the mortgage themselves, in a time of grief. It’s important to talk to a licensed financial representative in order to determine if this is right for you.

Utility Changes & Hookups

BC Hydro outlines that they have fees for moving, and they may also have fees for hook ups. If you require other utilities, there may be fees associated with that from your local municipality.

Typically, if you’re moving in a big city in Metro Vancouver, you’ll only have to pay the BC Hydro moving fee.

Changing Locks

We also recommend that you change the locks or at least have them rekeyed once you gain possession. This will make sure you’re safe and no other copies for your home are out there to be used with malicious intent.

For a condo, lock rekeying for the one main door can range from $50 to $80. While a whole house that’s getting new locks on multiple doors may cost $500+.

Final Thoughts

Closing on a home is an exciting time, so don’t let additional costs deter your enthusiasm for your dream home. While some of these extra expenses may seem like a lot, if you’re a first time home buyer, there are some exemptions on PTT. And if you have more than 20%, you can forego mortgage insurance.
If you’re looking for advice or support on buying a home in the lower mainland, be sure to reach out to Daniel John. Contact us here.

The Guide to Closing Costs in BC When Buying a Home