Purchaser's Expenditures

It is important to understand that besides the purchase price of a home there are some extra costs involved in purchasing a home.  It can be annoying to find out the extra costs by surprise.  The following is some of the potential costs a pruchaser should have knowledge of:

Property Transfer Tax

You pay PPT on the purchase price at the rates listed below:

1% on the first $200,000

2% on the balance of the purchase price greater than $200,000 and up to and including $2,000,000, and

3% on the balance of the pruchase price greater than $2,000,000 and up to and including $3,000,000, and

2% on the balance of the purchase price greater than $3,000,000 

Mortgage Loan Insurance

To obtain CMHC Mortgage Loan Insurance, lenders pay an insurance premium. Typically, your lender will pass these costs on to you. Your lender will give you the exact price when you apply for a mortgage.

The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums. For more information about the mortgage insurance rates talk to your broker or lending institution. www.cmhc-schl.gc.ca/en/co/moloin/moloin_005.cfm

GST Rebate on New Homes

New home buyers can apply for the rebate of the 5% GST if the purchase price is $350,000 or less. The rebate is equal to 36% of the GST  to a maximum rebate of $6,300. Threre is a proportional GST rebate for new homes costing between $350,000 and $450,000. There is no rebate for home priced at $450,000 and above.

Appraisal Fee 

The mortgage lender will require a professional appraisal of the propety to determine whether the selling price is reasonable for that market.

Legal Fees

Legal costs go to cover lawyer or notary fees and legal transactions such as reviewing the terms of the offer, preparing and signing a mortgage, conducting a title search on the property, registering a new title, obtaining relevant documentation and determining appropriate adjustment costs.  These charges can range from approximately $800 to $1200 for a notary and up to $2000 for a lawyer.

Property Survey

This is undertaken to verify the location of property's boundaries, measurements and structures and identify any easements, rights of way or encroachments on your, or adjacent properties.  Title insurance is often an alternative to a property survey.  For strata properties usually the strata corporation provides the survey for buyer but sometimes in single family homes the owner doesn't have the survey and the buyer has to get the survey and the cost is between $300 to $500.

Adjustments

These are prepaid expenses which will need to be adjusted between the Seller and the Buyer (e.g. paid property tax, maintenance fee, etc.).

Home Inspection Fee

It is a good idea to have an inspection done before completing the purchase to evaluate the structural and mechanical condition of the property.  This could save you lots of money in future repairs.  The inspection cost can be between $350 to $700.

Fire Insurance

Your lender will require you to purchase fire insurance for your home. Costs can vary depending on the coverage you would like.  See your insurance agent for more details and the costs.

Moving Costs

Although it may sound obvious, purchasers may not consider moving as a cost of buying a home.  Moving costs will depend on the distance of the move and the amount of furniture and goods to be transported.  Get several movers in to give you an estimate before choosing one.  Charge depends on the number of hours and number of workers.

Service Charges

These are charges to hook up utilities such as electricity, gas, and phone service.