When buying a new home there are costs you need to consider.
You will need an initial deposit to secure your property. This is usually between 5% and 10%. There are always exceptions where it could be higher or lower.
Tax ratesThere are three rates to consider when calculating your total property transfer tax amount:
General property transfer taxThe general property transfer tax applies for all taxable transactions. The general property transfer tax rate is:
- 1% of the fair market value up to and including $200,000
- 2% of the fair market value greater than $200,000 and up to and including $2,000,000
- 3% of the fair market value greater than $2,000,000
Further 2% on residential property over $3,000,000If the property has residential property worth over $3,000,000, a further 2% tax will be applied to the residential property value greater than $3,000,000. If the property is mixed class (such as residential and commercial), you pay the further 2% tax on only the residential portion of the property.If the property includes land classed as farm only because it is used for an owner’s or farmer’s dwelling, up to 0.5 hectares will be treated as residential property.Budget 2023 introduced an exemption from the further 2% tax for new qualifying purpose-built rental buildings on the amount of the residential property value that exceeds $3,000,000. More information is coming soon.
Additional property transfer taxIf you’re a foreign national, foreign corporation or taxable trustee, you must also pay the additional property transfer tax on the fair market value of the residential portion of the property if the property is within a specified area of B.C.See additional property transfer tax for more information on how the tax applies, the tax rate and what are the specified areas of B.C.
Be aware if you are considered a Foreign National (an additional 20% of the value of the property could be required).
Goods and Service Tax of 5% will apply to all new homes and substantially renovated homes. If you are buying a home that has done a recent renovation, be sure to understand the rule around GST on this. For complete outline of rules, guidelines and exemptions visit the Canadian Government website here.
To help with the conveyance, you will need to hire either a lawyer or notary public. The cost of closing is generally $1,500 to $3,000 on properties depending of the value of the property.
As for some estimated charges, for homes or mortgages under $2,000,000.00 you should budget approximately $1,400 for a purchase without a mortgage, $1,600 for a purchase with a mortgage, $1,200 for a cash sale plus $100 for each additional mortgage discharge and approximately $1,400 for a refinance with one payout.
Be sure to discuss this with your lawyer or notary for details and confirmation of their specific rates.