The "hidden costs" of Real Estate

‍1. Property Transfer Tax (PTT)

• Rate: 1% on the first $200,000, 2% on the portion between $200,000 and $2 million, and 3% on the portion above $2 million.
• Luxury Tax: 5% on any portion above $3 million.
• Exemptions: First-time homebuyers and newly built homes may qualify for exemptions under certain conditions.

2. GST (Goods and Services Tax)

• Rate: 5% on new homes. Most homes are not new homes so you would not be liable to pay GST on the home.
• Exemptions/Rebates: Full or partial GST rebates may be available for homes under certain price thresholds.

3. Legal Fees

• Range: $1,000–$2,500 depending on the complexity of the transaction.
• Services: Lawyers or notaries handle title transfer, mortgage documents, and adjustments.

4. Mortgage Default Insurance (CMHC Insurance)

• Required if down payment is less than 20%.
• Rate: 2.8%–4.0% of the mortgage amount, which can be added to the mortgage.

5. Appraisal Fee

1. Cost: $300–$500.
2. Purpose: Lenders may require an independent appraisal of the property’s value. This all depends on the bank really questioning the value of the home. Sometimes the bank will just run an AVM (Automated Valuation Model) which will automatically determine the price of the home. If a bank still needs more clarification, they'll require an actual appraisal.

6. Home Inspection Fee

• Cost: $400–$800.
• Purpose: Ensures the home is in good condition before purchase. Insurance companies will also want to know various things about the home that a building inspection would uncover.

7. Title Insurance

• Cost: $150–$400.
• Purpose: Protects buyers and lenders from title-related issues. This isn't always needed. Contact me for more information on this.

8. Survey

• Cost: $1,000–$2,000.
• Purpose: Ensures the property boundaries are accurate. This isn't necessary in many transactions but if you have a specific use for the property where knowing the exact property lines are then you may want to get a survey done.

9. Moving Costs

• Range: $500–$2,000 depending on distance and services.

10. Adjustments (Closing Adjustments)

• Costs: Varies based on unpaid property taxes, utility bills, and strata fees.
• Purpose: Buyers reimburse sellers for prepaid expenses.

11. Strata Fees (if applicable)

• Range: Varies by building but is typically several hundred dollars per month.
• Purpose: Covers building maintenance and amenities.

12. Property Insurance

• Cost: $800–$1,500 annually, depending on the property.
• Purpose: Required by lenders before they release mortgage funds.

13. REALTOR Commission

• Typical Rate: All rates are negotiable - please contact me directly to get a curated price for your property.
• Note: Most of the time, the seller alone pays the commission so if I'm helping you purchase a home, you wouldn't pay any commission. There are some rare cases where a buyer would pay commission. Contact me for more details on this.

14. Foreign Buyers Tax

• Rate: 20% of the purchase price for foreign nationals, corporations, or trusts buying in certain regions (including the Okanagan). Currently there is a foreign buyers ban in place until January 1, 2027. There are some exceptions to this. Contact me for more info.

15. Speculation and Vacancy Tax (if applicable)

• Rate: 0.5% to 2% of the property’s assessed value, applied to properties that are not the primary residence or rented out for long-term period. This tax applies to virtually all of The Okanagan as of January 1, 2025.

16. Underused Housing Tax (if applicable)

• Rate: The Underused Housing Tax (UHT) is a Canadian federal tax aimed at non-resident, non-Canadian homeowners who own underutilized or vacant residential properties in Canada. It imposes a 1% annual tax on the property's value to discourage underuse and promote housing availability for locals.

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