Taxes & Costs 

When you purchase real estate in Vancouver and the lower mainland there are several other costs that buyers should be aware of. You should take all these costs into account before you purchase or sell a property. Below we have outlined the costs that apply to a typical home purchase or sale.

 

 

Harminized Sales Tax  

As of July 1st 2010 alll new home purchases are subject to 12% harmonized sales tax (HST). No HST is payable on used homes. As HST is a combination of the GST and PST homes valued under $525,000 will benefit from a PST rebate to a maximum of $26,250.

 

 

Property Transfer Tax

 

Except in special circumstances, such as certain first time home buyers, property transfer tax is applicable to all property transfers in the Province of BC. In Vancouver and the lower mainland any property with a market value of more than $350,000 has to pay the full property transfer tax of 1% on the first $200,000 and 2% on the balance. In the event that the fair market value of the principal residence is greater than $325,000 but less than $350,000 a proportionate exemption is available. There are many other conditions and exemptions applicable to the payment of property transfer tax. One important one is the issue of Canadian citizenship or permanent residency. It is highly recommended that a real estate lawyer is consulted in order to fully understand property tax liabilities.

 

 

Property Taxes

 

Property tax adjustments are charged to buyers where the present owner has already paid them in advance. The amount charged will depend on what point in the calendar year the new owner takes possession of the property. In most cases property taxes are calculated from January to December and become payable in July. The adjustment transaction is carried out by the conveyancing lawyer or notary at completion and will be reflected on the buyers and sellers statement of adjustments.

 

 

Legal Fees

 

Legal fees are payable to your lawyer or notary for a number of services carried out during the purchase and sale of a residential or property. Services that are required include registering the property in the appropriate Land Titles Office, mortgage registration, paying out any existing charges against the property, paying out applicable taxes. Usually the purchaser is responsible for the cost of registering and the seller is responsible for the cost of clearing title.

 

 

Title Insurance

 

Mortgage companies, banks and credit unions who provide lending services may require a site survey prior to completing your mortgage. Often, but not in all cases these are available from the city for a minimal charge. In such cases tile insurance at an approximate cost of $300 - $400 dollars may apply.

 

 

House Insurance

 

Lending agencies will require a copy of the house insurance.  This must be provided before they are able to release their funds. If you are purchasing an older home check with the insurance companies to see if they have any issues with plumbing, wiring etc. If you are purchasing a strata property the strata corporation will usually carry insurance on the property but you are usually responsible for any deductible if your unit causes damage to the strata property.

 

 

Mortgage Insurance Fees

 

If you are obtaining a mortgage for your purchase and have less than 25% for a down payment your mortgage must be insured by a company such as CMHC or GE Capital. The fee for this varies depending on the down payment.  This amount can be added to your mortgage and adjustments made to your mortgage payments.

 

 

Building Inspection

 

Property inspection by a registered building inspector is always recommended when purchasing residential real estate. Land inspection for such things as septic tanks or underground oil tanks is also recommended. The modest cost of an inspection is well worth avoiding higher costs at a later date should problems occur.