Buying a House in BC – Taxes & Other Expenses

buying a home in BC - taxes and hidden expenses

Let me start by saying that I am Mortgage Advisor and not a Realtor, but it is very common for my clients to ask about home purchase related expenses when we sit down to plan a personalized mortgage solution.  Many of these questions are related the various taxes that are applicable for a home purchase in Metro Vancouver.  In many cases, most local families getting ready for a new home search would typically hire a Realtor and have a plan for what there down payment amount will be.  However, there are several related or hidden expenses to be prepared for.  In this blog, I wanted to share some key things to plan for when purchasing a home and other considerations for mortgage approval and budgeting.

 
What taxes do you pay on a house purchase in BC?

Property Transfer Tax (PTT)

Home buyers are all subject to a Property Transfer Tax (PTT).  Here’s how it’s calculated:

·        1% on the first $200k of the purchase price

·        2% on the amount over $200k and up to $2 million

·        3% on any amount over $2 million.

·        Plus, another 2% is on any amount greater than $3 million for residential properties

There is also an incentive for qualified first-time home buyers in the way of an exemption on amounts up to $500k level.  As well, first-time buyers could use a pro-rated exemption for amounts between $500k to $525k.  There are some other exemptions available to qualified buyers.  Please see the fact sheet from Real Estate Board of Greater Vancouver for full details: REBGV Fact Sheet

Goods & Services Tax (GST)

Buying a house in BC - how to calculate property taxes

The GST amount on a new home in BC is 5% overall.  There are GST rebates available for homes that are prices up to $350k and a pro-rated rebate on homes up to $450k amount.  For full details and extensive information on GST New Housing Rebates, you can visit: GST Rebates in Canada

 

Are there any other taxes or hidden expenses for purchasing a home in BC?

Now that we’ve addressed the main two taxes most are subject to, let’s take a quick look at some other variable expenses such as adjustments for the sale contract, related fees, insurance and other.  I suggest that you discuss this potential expenses (or hidden expenses) with your Realtor in detail to plan ahead and to be ready with a savings reserve in case you need to exercise it.

·        Property taxes that have been prepaid by the seller

·        Rent and security deposits for rental suites

·        Appraisal fees $300 to $450 range

·        Land survey fees $500 range

·        Legal or Notary Public fees

·        Utility connections and Municipal hook ups for gas, water and more

·        Home, fire and liability insurance

As mentioned, the above is just a quick overview of typical expenses to know of when buying a home in BC.  As well, I recommend factoring in a proper home inspection and insurance coverage to protect yourself from any major surprises or unplanned expenses.  There are some items that maybe included in a mortgage loan application and I’d be happy to customize a solution for your needs to support your next home search.  I invite you to connect with me anytime.

 

All the best,

Sukh Sangha

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