Budgeting for a new home can be tricky. Not only are there mortgage installments and the mortgage down payment to consider, there are a host of other—sometimes unexpected—expenses to add to the equation. The last thing you want is to be caught financially unprepared or blindsided by taxes and other hidden costs on closing day.

These expenses vary:  some of them are one-time costs, while others will take the form of monthly or yearly installments. Some may not even apply to your particular case. But it’s best to educate yourself about all the possibilities, so you will be prepared for any situation, armed with the knowledge to budget accordingly for your move. Use the following list to determine which costs will apply to your situation prior to structuring your budget.

Typical Costs to Buy a Home

  1. Deposit: This is not a cost, but buyers generally require a minimum of 5% of the purchase price when offering on a home. The deposit funds need to be liquid and readily available either at the time of offering or upon subject removal (depending on your offer strategy). Upon completion, the deposit will form part of your down payment (or purchase price).
  2. Down payment:  Minimum of 5% of the purchase price but depends on several factors such as your Canadian residency status, purchase price or whether you're purchasing an investment property. Your Deposit (see above) will also be used to form part or all of your down payment. Read mortgage articles or General Minimum Down Payment Requirements. We recommend talking to your mortgage professional for costs pertaining to your particular situation as there are many factors which affect down payment requirements. 
  3. Home inspection by certified building inspector.
  4. Appraisal fee: Your lending institution may request an appraisal of the property. Talk to your lender to confirm the typical cost and whether the cost will be your responsibility.
  5. Land survey fee or title insurance: Your lending institution may request a property survey or title insurance, or you may want one for your own protection.
  6. Mortgage insurance. Discuss whether your lender will require mortgage insurance (generally if your down payment is less than 20%, your lender will charge you insurance on your mortgage, as protection for the lender).
  7. Property Transfer Tax.  You may qualify for the First Time Home Buyer's Program or other exemptions of this tax.
  8. 5% GST generally applies to newly built homes only (never lived in), or existing homes that have recently undergone extensive renovations. Tax calculators.
  9. Legal fees:  A lawyer should be involved in every real estate transaction to transfer title from the seller's name into yours, plus they will review all paperwork. Experience and rates offered by lawyers range quite a bit, so shop around before you hire.
  10. Moving expenses.
  11. Does a Foreign buyer tax apply to you? Read our article and obtain a legal opinion.

Typical Costs of Home Ownership

  1. Monthly mortgage payments.
  2. Home insurance:  To insure your home and it's belongings against theft or damage.
  3. Service charges:  Any utilities you arrange for at your new home, such as cable or telephone or electricity, may come with an installation fee. Afterwards you will incur the monthly service costs.
  4. Renovation of new home:  In order to “make it their own,” many new homeowners like to paint or invest in other renovations in to their new home. If this is your plan, budget accordingly.
  5. Yearly Property Taxes. Some owners qualify for partial exemptions.
  6. Monthly Maintenance fees:  If you own a strata property (e.g. condo, townhouse, etc), you will be charged a monthly strata fee which covers the costs of common area maintenance and management.
  7. Future Maintenance and updates. We recommend setting aside money or creating a budget to pay for any repairs, maintenance and updates to your home.
  8. Additional potential taxes: As taxation policies change, please contact your tax expert to discuss your particular situation. For example, newer taxes may apply to some home owners, such as: Vancouver Vacancy Tax and BC Speculation and Vacancy Tax.

Top BC Home Rebates and Grants

Please Contact Us for more information, or to find out how these costs apply to you.