Property Purchase Tax.
The property purchase tax is payable on the purchase of all real property
in British Columbia. It is calculated based on 1% of the purchase price up
to $200,000.00 and 2% of any amount above $200,000.00. Maximum purchase price
allowed to take advantage of the PPT exemption in the Lower Mainland is $275,000
and $225,000 in other parts of B.C. Check with your lawyer to learn more about
the First Time Home Buyers exemption program.
Goods and Services Tax. GST of
7% is payable on the purchase of any new home or any home that has been substantially
renovated. A Purchaser may be entitled to a GST rebate of 36% of the 7% tax if the
Purchaser or a relation of the Purchaser will be moving into the new home and making the
home his or her permanent residence. The full GST rebate is available only on residential
premises priced at $350,000.00 or less. Purchaser of new or substantially renovated
residential premises priced between $350,000.00 and $450,000.00 may be entitled to a
gradually reduced rebate that is determined by the purchase price of the property.
Purchasers of new or substantially renovated residential premises sold at $450,000.00 or
more are not eligible for the rebate.
Legal Fees. This will be the
fees paid to the Purchaser's lawyer or notary. The amount of legal fees will range and
quotes can be obtained prior to choosing the appropriate legal firm to use. Be sure
to ask for an estimate of potential disbursements. A word to the wise - a good
lawyer is worth his/her price.
Transfer Filing Fees. This is
a charge of $50.00 paid to the Land Title Office to register the property into the
Purchaser's name.
Mortgage Filing Fee. This is a
charge of $50.00 paid to the Land Title Office to register each mortgage that will be
registered against the title of the property.
Insurance Binder. This is a
requirement by the bank or trust company to ensure that the Purchaser has arranged fire
insurance on the new home. Proof of insurance coverage by way of an insurance binder is
necessary and the typical cost will range up to $35.00
Survey. Generally,
a bank or trust company will require a Survey to confirm that the house does
not encroach or cross over the property line. A Vendor will often already
have a Survey, especially if the Vendor also had a mortgage on the property.
Otherwise, a new Survey on a house will cost approximately $300.00. Surveys
are not necessary if the Purchaser is buying a strata property or condominium
and can often be replaced by using Title Insurance. Ask your Realtor or Mortgage
Broker about Title Insurance.
Form B Certificate.
This is required only when a strata property or condominium is purchased.
The Certificate is issued by the strata corporation in order to confirm that
the previous owner does not owe the strata corporation any money. This Certificate
will range in price up to approximately $40.00.
Adjustments. These are prepaid
expenses which will need to be prorated between the Vendor and the Purchaser. For
instance, a typical adjustment deals with the property taxes paid to the City or
Municipality. The amount paid will be adjusted as of the adjusted date and one party will
be required to reimburse the other. Other typical adjustments include mortgage interest,
strata maintenance fees and utility expenses.
CMHC Fees. This
is an insurance premium paid to CMHC by the purchaser to have the mortgage
insured by CMHC. In most cases, this premium is added to the mortgage and
ranges from 0.5% to 3.75% of the loan amount. The percentage is determined
by the Loan to Value ratio. The Purchaser is also subject to a CMHC application
fee ranging from $75.00 to $250.00 depending on the property.
Appraisal Fees.
Separate from your Home Inspection, this is a fee paid for the cost of an
appraisal to have the property valued for financing purposes.
