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Costs to Consider: Closing Costs When Buying a House

It is important to know the closing costs before you buy a house. This will help avoid any unexpected closings (aka completion).

This blog covers all closing costs when purchasing a home. It applies to single-family detached homes, condos, and townhouses.

We also cover the total cost of purchasing a house in BC, as well as costs before, during, and after closing.

This article will help you estimate closing costs when buying a house. Continue reading.

Before Closing Day

You should consider the following costs. These are usually incurred during the subject removal before the closing day.

These items are usually part of your financing, inspection, or insurance clauses that must be met when you purchase.

Property appraisal

An appraisal is required by the lender to verify the value of your home. It costs $300-$450 plus GST. Although an appraisal is not required by every lender, it is often required for buyers who have a low ratio and are putting down more than 20%. This cost may be covered by your mortgage broker. Ask if you will have to pay it in advance.

Home inspection

The home inspection company will charge $300 to $600 plus GST, depending on the size. Buyer pays the cost. Sometimes, the seller may have done a pre-inspection. You may also choose to waive the inspection clause in other instances.

Fire and Home Insurance

The type of property you purchase and the coverage you get will affect the amount. Home-buyers who have a mortgage are required to purchase home insurance. You should have insurance in force prior to closing.

Closing Day

After you have removed all subjects and are closer to completion, your lawyer/notary will prepare a statement containing adjustments so you can review your credit and debits, and determine the final amount owing.

These costs are not due until completion. However, it is common for you to sign the statement and submit your final costs to close within 1-3 business days. This will ensure that title transfer is on time and the completion day goes smoothly.

Closing costs are the most common when purchasing a house. They are due upon completion.

The balance of the purchase price

Your initial deposit less the purchase price. The majority of the money will be provided by your lender. This is your mortgage.

Property Transfer Tax (PTT).

This is the most important closing cost to know. You will be required to pay the property tax on your purchase if you don’t qualify for an exemption. This tax is one-time and is calculated on the fair market value, which in most cases, is the purchase price. The property transfer tax rate for most residential properties is:

  • 1.1% for the first $200,000
  • 2.2% on the fair market value above $200,000, and up to and including 2,000,000
  • 3% on any portion of the fair value above $2,000,000
  • If the property is residential, an additional 2% will be charged on the portion of the fair value that exceeds $3,000,000

Most notable exemptions from property transfer tax include the PTT exemption for first-time homebuyers and Newly Built Home exemption.

There are no fees

The average price is $1000-$1500. However, the exact amount will vary depending on the purchase price and whether or not a lawyer/notary was involved. This is the cost of the lawyer’s services in order to transfer the title from the seller to buyer. This includes acts such as registering title and ordering a title search.

CMHC Insurance Premium

If you have a high-ratio mortgage, and you put less than 20% down, this premium is added to your mortgage insurance. This amount is based on a sliding scale and will vary depending on whether you put 5% or 15% down. This lump sum can be paid at the completion. However, it is common to combine this amount with your monthly mortgage payment.

Title Insurance

Title insurance protects both you and your lender against title fraud, municipal work orders and zoning violations. Although the lender might require that you purchase it at your cost, you have most often the right to decide whether or not to purchase title insurance.

Adjustments for Prepaid Utilities & Taxes

The amount you receive depends on the date you move in and if the seller has already paid. To determine if the taxes and utilities are correct and what amount is needed to transfer title, your lawyer or notary will do the calculations.

Property taxes, for example, are due on July 1 and the first of each calendar year. You will need to reimburse the Seller for any property taxes paid after July 1. This can be a credit amount or a reimbursement to seller depending on when the buyer moves in and whether the seller paid taxes before the due date.

Property Survey

The lender might require that the homeowner obtain a property survey. This can cost anywhere from $500 to more than $500. This is not required for strata properties and usually only applies to detached homes with lots.

Bridge Financing (if available)

Buyers who are selling their homes may also have bridge financing. This allows them to plan their purchase and sale dates. If your home purchase closes prior to the sale of your existing home, the financing and interest cost required to bridge the dates will be due at closing.

Additional PTT – Foreign Buyer Tax (if applicable).

If your title is transferred abroad, an additional 20% is charged. This applies to foreign buyers who purchase property in Metro Vancouver, Capital Regional and Fraser Valley. Tsawwassen First Nation properties are exempt from the additional property transfer tax.


The purchase price is the basis for the 5% tax. This tax applies only to newly constructed homes (ie condos that are presale). Except if you receive a rebate, GST can be added on to your mortgage. In which case you will need to pay the entire GST.

Condo Fees & Rental/Security Deposit Rembursements (if applicable).

Seller will be reimbursed for any prepaid items, such as security deposits and rental fees, or strata maintenance fees, The amount will vary depending on the date of move-in

If strata, Form B and/or the Strata Documents

The listing agent usually orders this certificate at the time that the property is listed. However, if the completion period has been extended by your lender, the lender may request an updated certificate from the property management company. This usually costs between $50 and $100, but it is possible to pay more if you need it urgently.

Strata move in fee (if strata & if relevant)

The one-time fee is set in each strata’s bylaws. It varies from one strata to the next. Sometimes I don’t see any move-in fee. However, I recommend that you estimate between $100 and $200. I have seen as high as $300.

After Closing Day

Congratulations! You are now officially a homeowner. However, there are still costs I recommend budgeting for after closing day.

Now that you have the keys to your new house, let’s look at how much it will cost you to move in. These are other closing costs that you should consider when purchasing a home.

  • Box and moving boxes for rent
  • New locks
  • Home Goods & Furniture
  • Utility connection charges
  • Redecorating and renovating costs
  • Instant Repair and Maintenance costs
  • If applicable, an elevator or move-in deposit is required. This deposit is often refundable by the strata.

It can be difficult to understand and comprehend the closing costs of buying a house.

There are many things to keep track of and you will want to ensure you stay within your budget. You don’t want to make costly mistakes with budget estimates and closing costs. Get the right guidance when it comes to financing and cost matters.



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