The following is a more detail description of these expenses:
PROPERTY PURCHASE TAX
The BC 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.
There are some exemptions
available for this tax, the most relevant one being the First Time Homebuyers'
Exemption. Buyers eligible for this exemption must meet the following criteria:
* Buyers have not previously
owned an interest in a principal residence
anywhere
* Buyers must have lived
in BC for at least one year before applying
* Buyers must be Canadian
citizens or lawfully admitted to Canada
for permanent
residence.
* Buyers must have registered
financing for an amount equal to 70% or
more of the fair
market value of the property; and the amount borrowed
must have a term
of at least one year.
GOODS & SERVICES TAX
If you purchase a newly constructed
home, you may be subject to 7% GST on the purchase price. However, if the
home is under $350,000, a rebate will reduce the GST paid to 4.48% of the
purchase price. If the price is over $350,000 , the net GST to be paid
increases gradually until it is a full 7 % at amounts over $450,000.
PROPERTY TAX ADJUSTMENT
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
APPRAISAL FEE
When the lending institution
requires an appraisal ot the property before approving your loan, it may
be your responsibility to pay the appraiser's fee.
SURVEY 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 responsibilities
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.
MORTGAGE DEFAULT INSURANCE
If you have to borrow more
than 75% of the purchase price of a property, it is called a "high-ratio
mortgage" and you will be asked to pay a mortgage default insurance premium
to protect the lender in case payments are not made. The insurance premium
ranges from 0.5% to 3.75% of the loan value. In most cases, however, this
premium is added to the loan amount, and paid for over the term of the
loan.
LIFE & DISABILITY MORTGAGE INSURANCE
At you option, you may purchase
insurance which will ensure that your outstanding mortgage balance is paid
if you die or become disabled.
FIRE AND 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.
LEGAL FEES
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 owners interests. You will probably
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 further fee to prepare and register
the mortgage documents.
OTHER LAST-MINUTE COSTS
Don't forget to set some
money aside for:
* home inspection fees
* moving expenses
* utility hookups
* House hold goods: kitchen
appliances, closet organizers and
window
coverings