CLOSING COSTS FOR THE PURCHASE OF A HOME
When you purchase a property, you need to be aware of closing costs added to the sale price of the home. This can vary from 1% to 6% of the value if the property is newly built. Here are most of the costs you can expect to incur during the process:
Property Transfer Tax. This provincial sales tax payable is 1% on the 1st $200,000, and 2% on the balance. First time buyers who occupy the property as a principle residence may be exempt provided the sale price is $425,000 or less. Other conditions apply.
Goods and Services Tax. When you buy a newly constructed home, you must pay the 5% GST. However, if your house is less than $450,000 and you occupy the property, you may be eligible for a rebate.
Mortgage Costs. There will be a fee for the mortgage company’s lawyer or notary, and a mortgage loan insurance and application fee - if you get a high ratio mortgage (where you pay less than a 20% down payment). This insurance would be from CMHC or GE Capital.
Legal or Notary Fees and Expenses. The lawyer will review and prepare closing documents, pull and review the title search. Additional costs will be disbursement fees and Land Title registration fee. Generally the base fees start at $650.
Pre-paid Property Taxes, Utility Bills, Maintenance Fees. The Buyer will be required to reimburse the Seller for any prepayments.
Appraisal Fee. Before your lender approves your mortgage, you may require an appraisal. Sometimes your lender may cover or waive this cost. The fee ranges from $225 to $350.
Home Inspection Fee. REALTORS® will strongly recommend that you have a home inspection by a certified home inspector. The costs can range from $375 to $450 for a smaller home or condo.
Home Insurance. To ensure proper protection, your insurance should be effective on the earlier of either the Completion Date or the Possession Date. The costs will vary depending on coverage amounts and type of property whether single family or strata unit.
Survey Fee. Your lender may require a current survey of the property. If the Seller does not have a copy, you will need one done. The fee ranges about $700 and up. Alternatively, some lenders accept Title Insurance as a replacement for a similar fee.
Moving Costs and Utility Connections. Generally, the costs are about $100/hour for 3 men and a truck plus travel time. Hydro, telephone and cable connection fees also apply.
NB. The above fees/costs are subject to change and should not be relied upon without verification from the actual service provider.
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