THESE ARE SOME OF THE CLOSING COSTS YOU NEED TO BE AWARE OF:
· PROPERTY TRANSFER TAX (PTT)
1% of the first $200,000 plus 2% of the balance of purchase price. This is a provincial tax and is paid on all property purchases.
First time buyers may be exempt, if home is under $375,000 and other criteria is met. see the attched link, http://www.bellspag.com/new/legalissues/ptt.html for latest information (February 2007).These rules change from time to time and must be checked on the government site or with your lawyer.
· CMHC FEES
High ratio mortgages (less than 25% down) must be insured through CMHC or GE Capital. Mortgage insurance protects the lender against payment default by the homebuyer. This is mortgage insurance not life or disability insurance. This enables homebuyers to finance up to 95% of the purchase price of a home. See chart below for costs….
These fees are typically added to the mortgage amount and are paid for as part of the total monthly payment calculation. They may however be paid for separately. These premiums are based on the amount of the loan in relation to the value of the home. Check at www.cmhc.ca to verify
Loan to Value Premium / Fee
5%down 95% loan % 3.25%
10% 90% 2.50%
15% 85% 2.00%
20% 80% 1.00%
up to 75% 0.65%Less than 75% loan to value there is no CMHC fee
LAWYER OR NOTARY FEES
Includes, land registry fees, drafting of the documents, disbursements, title searching etc.
Typical buyer fees, when there is a mortgage run from $850.00 up. It is advised to get a quote from your Lawyer or Notary. Please refer to the section on Affiliate Services.
· HOME INSPECTION
You may choose to have a professional inspection of your new home. This is typically a subject clause in your original offer.
Costs start around $400.00 and vary depending upon the size of the property. Please refer to the section here on Affiliate Services.
· SURVEY CERTIFICATE
If required by lender, approximate costs are $200.00 up. Not required on strata properties.
I always check with the seller to see if they have one, and save you the expense.
· TAX ADJUSTMENT
Taxes are usually paid on July 1st. Six months in advance and 6 months in arrears. Vancouver City splits their tax payment into twice a year. Depending in what month your completion date is you may have to reimburse the seller for taxes that they have paid. Also there may be other expenses which the seller has prepaid, such as utilities, water and sewage taxes. Your lawyer will calculate these amounts and show it as either a debit or credit on your statement of adjustment.
· GST - GOODS AND SERVICE TAX
5% GST charged on all new homes. No GST tax on existing homes.
Rebates may apply, for owner occupied homes bringing the effective rate down by a maximum amount of $7560.00, ($350,000.00 x 5% x 36% = $6300.00) The purchase price must be under $350,000.00 and other criteria must be met in order to qualify for the rebate. The rebate is phased out for new homes between $350,000.00 to $450,000.00 Call me, or see Canada Customs & Revenue Agency website for full details.
· APPRAISAL FEE
An appraisal may be ordered and the buyer charged for this at the discretion of the lender.