Understanding Closing Costs

The Gibbard Group Financial team is here to help you understand what’s involved in purchasing real estate and make the process easier for you. When property is purchased in Canada, there are other costs related to the transaction beyond the purchase price.  Not all costs may apply in all circumstances, but are listed here for information and to help you plan for these costs.

Working together with your legal advisor, the mortgage experts at Gibbard Group Financial can help you figure out which apply to your specific situation.

Property Purchase Tax – In British Columbia, a provincial property purchase tax of 1% on the first $200,000 plus 2% on the value between $200,000 - $2,000,000 plus 3% tax on the portion above $2,000,000. If you are a first time home buyer, you are exempt from this tax up to $500,000. Between $500,001 and $525,000, the tax is calculated on a sliding scale.

Legal Fees – If you are selling a property, you will be responsible for legal fees regarding clearing the title for the purchaser. If you are the purchaser, you are responsible for conveyance fees, preparation of statement of adjustments, and mortgage registration.

Appraisal Fees – on conventional mortgages & non-income qualified mortgages, lenders require a written analysis of the estimated value of a property, as prepared by a qualified appraiser. A fee is typically charged for a real estate appraisal because a home appraisal is time consuming to perform. Appraisal fees range between $300 - $500.

Land Survey – the legal written and/or mapped description of the location and dimensions of the land and where the home sits on that land is obtained from an accredited land surveyor. Approximate cost is $500. In many cases, a survey can be obtained from the previous owner or from city hall.

Title Insurance – may be purchased in lieu of a land survey and/or a well water test in some cases. Title insurance provides protection against several defects such as problems with the property that would have been revealed by an up-to-date land survey. Typical costs range from $150-$500.

Hi-Ratio Mortgage Insurance – If you are buying a home for less than 20% down, you will need to pay a premium of between 1% and 4.30% depending on the mortgage amount and amortization of the mortgage. This premium is to protect the lender in the event of default and is not to be confused with mortgage life insurance.

Home Inspection Fee – a very important part of purchasing a home, the home inspection is an objective visual examination of the physical structure of the house. Approximate costs range between $300-$500.

Click here to download a copy of our closing costs worksheet