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Closing Costs

Other than commission or advertising expense, all real estate transactions are subject to closing costs. Our team has compiled a list of costs to take into consideration for your next purchase.  Generally speaking, you will want to budget for 1.5% to 3.0% of the purchase price for closing costs.  This is in addition to your down payment.

Keep in mind that although we have conducted research into closing costs, we strongly recommend that you do your own due diligence.  Some costs may have been missed or not applicable for your transaction.

Closing Cost Descriptions

Legal Fees When a real estate transaction occurs, a lawyer or notary is needed to register the change in ownership with the Land Title Office. A survey is required to be done if the buyer is taking a mortgage to purchase a property. This document assures the lender that the property has been built within its boundaries.
Appraisal Fee An appraisal provides a professional opinion confirming the market value of a property.  If the purchaser needs a mortgage for the purchase, an appraisal will also assure the lender that the agreed upon selling price is reasonable for current market conditions.
Property Purchase Tax

This is a one-time tax imposed by the province where the property is located. Many provinces impose this tax on a tiered basis and the rates range from .5 to 2%.  This is sometimes referred to as a land transfer tax.

Mortgage Default Insurance

This Insurance is only applicable if your mortgage financing exceeds 80% of the purchase price. A unique benefit of this cost is you have the option to pay it up front or add it to your mortgage amount. In Canada there are two major providers of mortgage insurance, Genworth and CMHC.  The estimated cost is between 1.00% and 2.75% of the loan amount.

Fire & Liability Insurance

Insuring your home is highly advisable and sometimes mandatory. House insurance provides coverage in case of fire, theft, loss and liability.  This cost is rather minor compared to others associated with a purchase.  Insurance premiums vary based upon many factors such as location, size of home, security, coverage type and fire system in place.

Goods & Services Tax

When buying a newly constructed home in Canada you will have to pay GST (5%). However, if the property is your primary residence and less than $350,000, a rebate reduces the GST to approximately 3.5%.  That rebate is reduced as the property price approaches the maximum of $450,000. For further questions or concerns, contact Canada Revenue Agency.

Estoppel Certificate (for Condo/Strata units)

This fee is only applicable if you buy a condominium or strata unit:  For documentation your lawyer will obtain on the bank’s behalf to confirm the condominium’s financial well being.  The Estimated cost is $100.

Property Survey

Your lawyer will obtain this document to ensure all upgrades have obtained civic approval (extensions, patios etc.).