1. Costs for Residential Purchasers
I work for you, not the lenders.
The following is a list of typical adjustments which the purchaser of a residential property
in British Columbia may encounter. We hope that you will find the information useful.
What costs to expect in the beginning…
1. HOME INSPECTION
This is a one time cost that a purchaser
may or may not incur. The purpose of
the home inspection is to check for the
structural, electrical and plumbing
integrity of the property.
This is completely at the option of the
purchaser and is not required by the
lender. The cost ranges from $250.00 -
$450.00
2. DEPOSIT MONEY
In all purchases, a deposit is required
usually on the subject removal date or
within 24 hours of subject removal. The
amount is normally a minimum of 5-10%
of the purchase price but is negotiable at
the time that the contract is written up.
This money is normally held in trust by
YOUR realtor’s office.
3. APPRAISALS
If the client has 20% or more of the
purchase price as down payment the
lender may require an appraisal.
This is done to ensure that:
a) the lending institution is not over
lending on the property
b) the buyer is protected from over
paying.
A typical appraisal can cost from $250.00
to $300.00
4. CMHC/GENWORTH APPLICATION FEES
If the client has less than 20% of the purchase price as down payment the mortgage will have
to be insured by one of the mortgage insurers. There is no longer an application fee charged;
however, there is a one time insurance premium added to the mortgage amount.
Costs payable on your closing date at the lawyer/notary office…
5. SURVEY CERTIFICATE/TITLE INSURANCE
Most mortgage lenders will require a Survey Certificate for the property being purchased. This is prepared by a BC Land Surveyor
and it shows the outline of the house as it sits on the legal lot. Lenders require a Certificate to ensure that the house does not
encroach on a neighbouring property. If the vendor does not have one, or if the lender is not willing to accept an old survey, the
purchaser will need to order a new survey. The cost generally ranges from $200.00 - $300.00
An alternative to obtaining a Survey Certificate is to obtain Title Insurance.
Currently the cost varies from $150.00 - $400.00 depending on the desired policy.
6. PROPERTY TRANSFER TAX
This is a one time tax payable on the purchase of real estate. It is based on the purchase price and is payable to the Provincial
Government. The amount of the tax is 1% of the first $200,000 and 2% of any amount of the purchase price above $200,000.
There is a full exception from this tax for First Time Buyers who meet all of the following qualifying conditions:
 Never owned a principal residence anywhere in the world
 Resident of BC for the last 12 months
 Must move into the property within 92 days of completion and reside in the property for at least one year

2. 6. PROPERTY TRANSFER TAX
 Purchase price is not over $425,000
There are requirements with respect to how much financing may be reduced the first year the purchaser owns the property.
There is a partial tax exception on home values of $425,000 - $450,000.
A full PTT bulletin is available in PDF form. Please contact our office for a copy.
7. STRATA TITLE
Condominiums and townhouses have a special form of title
called Strata Title. You will not need a Survey Certificate if
you are purchasing a Strata Title property.
However, there are other expenses as follows:
 Some Strata Corporations charge a fee to provide two
documents required to complete a strata purchase.
These are called a Form B and a Form E. The fees for
each of these range from $50 - $100.
 Your law firm will ordinarily order a copy of the Strata
Plan to ensure that you are in fact purchasing the strata
unit that you are intending to. The cost is
approximately $15.
 There will be an adjustment for your portion of the
monthly Strata Fees for the month in which your
purchase falls.
8. LEGAL FEES
Legal fees are generally
between $900.00 - $1,000.00
to convey title and register a
mortgage. (these figures
include fees and
disbursements, but not taxes)
You can add another $600.00
if you are also selling a
property at the same time.
The legal fees to only register
a mortgage will be in the
$600.00 range.
9. INSURANCE BINDER
This is a requirement by the
bank to ensure that you have
arranged sufficient home
insurance to cover any losses
that may be incurred on the
purchase. Proof of coverage
by way of an insurance binder
supplied by the insurance
agent is necessary and usually
costs $35. (this is not
applicable for a strata
property)
Possible additional costs payable at closing…
10. INTEREST ADJUSTMENT
This is the amount of interest due between
the start date of your mortgage and the date
that the first mortgage payment is
calculated from.
For example: If your monthly payments are
set for the 1st of every month and your
mortgage completed on October 20th you will
pay an interest only payment on the 1st of
November for the 11 days between October
20th and November 1st. Your regular monthly
payments of principal and interest would
begin on December 1st.
The interest adjustment payment is normally
debited from your payment account on the
interest adjustment date (IAD) and is this
example would be November 1st.
11. MUNICIPAL PROPERTY TAXES & TAX HOLDBACK
Property taxes are calculated on a calendar year from January 1st
to December
31st
. However, they become due at the beginning of July of that year. (i.e. taxes
owing up to Dec.31st 2011 were due and payable at the beginning of July 2011.)
When a property is purchased anytime prior to the tax due date, the purchaser
receives a credit for the portion of the year that they did not own the property.
(i.e. If a purchase closes in May the purchaser will receive a credit from the
vendor for the number of days between January 1st and the closing date of the
purchase.)
Conversely, if a purchase completes after the tax due date you, then the
purchaser will reimburse the vendor for the portion of the year they will not own
the property but have already paid for. (i.e. If a purchase closes in October the
purchaser will reimburse the vendors for the number of days from this date to
the end of the year.)
To calculate these amounts: 1 day of taxes on an owner occupied property is the
annual taxes, less $570 for the home owners grant available in BC, divided by
365. This daily tax amount multiplied by the number of days applicable will
calculate the amount to be either credited to you or paid by you. As a general
rule, be prepared to have your lawyer collect 6 months of property taxes for
a hold-back for your lenders property tax account.
This lists only the major items. A more complete list applicable to your
individual situation can be obtained by contacting me directly.
This information is being provided to assist in the planning of a home
purchase. It is not intended to be legal advice and the information set
out may not be applicable in all cases. In some situations, a purchaser
may be required to pay for other additional expenses such as a second
mortgage, an assignment of rents, power of attorney or independent
legal advice.
For any questions or general inquiries you may have,
please call me anytime.
Deborah Dickson, Mortgage Broker
Telephone: 604-341-778
Fax: 604-856-8156
d.dickson@dominionlending.ca
www.debdickson.com