GST Rebate on new homes
New home buyers can apply for a rebate of the 5% GST if the purchase price is $350,000 or less. The rebate is up to 36% of the GST to a maximum rebate of $6,300. There is a proportional GST rebate for new homes costing between $350,000 and $450,000.
Property Purchase Tax
The British Columbia Provincial Government imposes a property purchase tax, which must be paid before any property can be legally transferred to a new owner. The tax is 1% on the first $200,000 of the property value and 2% on any value over $200,000. Ask me about the special regulations for first time buyers in B.C.
If the current owners have already paid the full year’s property taxes to the municipality, you will have to reimburse them for your share of the year’s taxes. Property taxes are calculated from Jan – Dec and are paid at the end of June.
When the lending institution requires an appraisal of the property before approving your loan, it may be your responsibility to pay the appraiser’s fee.
The lending institution may also require that a survey certificate be presented to them. The purpose of the survey is to formally establish the boundaries of the property and to ensure that all buildings are within those boundaries. If the current owner cannot provide a recent survey certificate, it will be your responsibility to pay the surveyor’s fee.
Mortgage Application Fee
Lending institutions may charge a mortgage application fee. This application fee may vary between lending institutions.
Typically, lenders require mortgage loan insurance for loans made to anyone that wishes to purchase a home with less than 20% of the purchase price. The Canadian Bank Act prohibits most federally regulated lending institutions from providing mortgages without mortgage loan insurance for amounts that exceed 80% of the value of the home or purchases with less than 20% down payment. Through your lender, Mortgage Loan Insurance enables you to finance up to 95% of the purchase price of a home.
Life & Disability Mortgage Insurance
At your option, you may purchase insurance that will ensure that your outstanding mortgage balance is paid if you die or become disabled.
Fire & Liability Insurance
The mortgage lender will insist that you purchase an insurance policy which guarantees that, in the event of fire, the lender will receive the balance owing on the mortgage loan before you receive any insurance proceeds.
The transfer of property ownership from the seller to the buyer must be recorded in the Land Title Office in order to protect the new owner’s interests. You will want to engage a lawyer or notary public to act on your behalf during the completion of your purchase. The legal fees for this service will include payment of a registration fee. If you are financing your purchase with a new mortgage loan, there will be a further fee to prepare and register the mortgage documents.
Possible Other Last-Minute Costs
Home inspection fees
Deposits required by utility companies
Household goods: kitchen appliances, garden equipment, garbage
cans, tools, window coverings, etc.
Renovations or redecorating