Closing costs are a one-time fee associated with the sale of a home and are separate from the mortgage insurance and down payment. Typically, these costs range from 1.5-4% of the purchase price, depending on your location. Factoring these costs into your maximum budget can help you narrow down an entirely affordable home and ensure future financial stability and security.
Here are a few closing costs to keep an eye out for:
- Property Transfer Tax is often the largest closing cost for buyers in British Columbia. It is calculated based on the purchase price of the property and is payable at the time of registration. Some buyers may qualify for exemptions, such as the First‑Time Home Buyer or Newly Built Home exemptions, which can significantly reduce or eliminate this cost. Your lawyer or notary will confirm the exact amount owing and ensure it is included in your closing document
- Legal fees and Disbursements cover the work your lawyer or notary performs to complete the purchase, including reviewing contracts, conducting title searches, preparing mortgage documents, registering the transfer, and finalizing the statement of adjustments. In BC, legal fees for a standard purchase typically range from $800-$2000 depending on the complexity of the file and the level of representation required. Your legal professional will provide a detailed breakdown of all fees and disbursements.
- PST on CMHC Insurance: Though CMHC insurance itself is financed through the mortgage, PST on the insurance is typically paid at the lawyers and sometimes deducted from your advance.
- Appraisal Fee: An appraisal is performed to certify the lender of the resale value of the home in the case you default on the mortgage. The cost is usually $400 - $600 but is typically covered by the lender.
- Home insurance is required by lenders before mortgage funds can be advanced. This insurance protects your property and belongings and provides liability coverage. Costs vary depending on the home’s value, location, and coverage level, but buyers should expect to pay an annual premium that is prorated at closing. Your insurance provider will issue proof of coverage to your lawyer or notary before completion.
- Adjustments (Taxes, Utilities and Strata Fees) ensure that buyers and sellers each pay their fair share of property‑related expenses. Your lawyer or notary will prorate items such as property taxes, utilities, and strata fees based on the closing date. If the seller has prepaid these costs beyond your possession date, you will reimburse them for your portion. If amounts are outstanding, the seller will typically cover their share up to closing. These adjustments appear on your statement of adjustments and form part of your final closing costs.
