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BUYING A HOME IN BC: CLOSING COSTS GO BEYOND THE PURCHASE PRICE
You’re shopping for your new home and you’re assessing what you can afford. You take a look at your bank account balances to see how much cash you have available for down payment. But as you’re finalizing your home buying budget, don’t forget these other “end” expenses you’ll encounter before you settle into your new home.
Property Transfer Tax:
Property transfer tax is different from property tax, the money you pay every year for services you receive from your local government. In BC, property transfer tax must be paid whenever you purchase a property and register the title change with the Land Title Office.
Harmonized Sales Tax:
If the home you choose is newly constructed, you may be subject to HST on the purchase price. When the BC government introduced the HST in 2010, they also began a rebate program for new housing purchased as a primary residence. The purpose of the rebate program is to ensure that, on average, buyers of new homes up to $525,000 do not pay any additional tax due to harmonization.
If the sellers of the property you are buying have already paid the full year’s property taxes to the municipal government, you will have to reimburse them for your share of the year’s taxes.
Appraisal Fee: Most banks will not grant a loan without a home appraisal. Depending on the lending institution you choose to work with, you may be responsible for fees related to the pre-loan home appraisal. These costs typically vary according to the type and size of the property and the experience level of the appraiser.
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