Buying a house is a very exciting time for anyone. It’s often the biggest purchase a person makes in their lifetime and requires a lot of planning and coordinating. Of course, the purchase price is an obvious expense for any homebuyer, but there are several other expenses homebuyers tend to forget or perhaps are unaware of when considering their homebuying budget.
Note that some of these fees differ in each province and information given here is for homes in British Columbia.
Property/Land Transfer Tax
Homebuyers in BC are responsible for paying property or land transfer if they are purchasing or gaining interest in a property that is registered at the Land Title Office. The tax is based on the market value of the property, land and improvements included, at the date of registration with the Land Title Office. Some homebuyers and properties may qualify for tax exemptions. For full details, visit the Government of British Columbia’s website.
In most cases, the property tax owed by the seller has already been paid up for the year. The seller will be reimbursed by the homebuyer for any months of the year following the purchase that have been paid for. Homebuyers should be aware of property tax deadlines, the cost of the property taxes and be prepared to pay them when they are due.
A home inspection is recommended for most home purchases to ensure the home and land are as they appear. The fee is the responsibility of the homebuyer and is something that should be considered when budgeting.
Depending on the homebuyers’ situation and preferences, there are various types of insurance that will need to be accounted for. Different insurance types may be required by mortgage lenders and banks in order to secure financing, such as title insurance or mortgage insurance.
When purchasing a newly-built home, homebuyers must budget for GST. Generally, most other homes are GST-exempt. Services related to the home buying process, such as commissions and legal fees are also taxable.
Legal fees will vary based on the lawyer or notary that is used and the purchase price of the home, however, this is an expense that homebuyers tend to forget when budgeting.
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