BC Closing Costs: What Buyers Should Budget For

The purchase price is only part of what it takes to buy a home. On top of your down payment, there are closing costs, and the biggest surprise for many buyers is how much they add up to. As South Surrey and White Rock realtors, we like buyers to see the full picture before they write an offer, so here is what to plan for.

Your Down Payment and Deposit

When your offer is accepted, you put down a deposit, which is held in trust and credited toward the purchase price at completion. The rest of your down payment is due on or before the completion date. Keep in mind that the deposit is part of your down payment, not an extra cost.

Property Transfer Tax

Property transfer tax (PTT) is usually the largest closing cost for BC buyers. It is charged on the fair market value of the property at the time of registration, using tiered rates:

• 1% on the first $200,000

• 2% on the portion from $200,001 to $2,000,000

• 3% on the portion above $2,000,000

• An additional 2% on the residential portion above $3,000,000

A few examples show how it works. On a $750,000 home, PTT is $13,000. On a $1,000,000 home, it is $18,000. On a $1,200,000 home, it is $22,000.

PTT Exemptions That May Apply

Two programs can reduce or eliminate PTT:

• First Time Home Buyers' Program. A full exemption applies to qualifying purchases with a fair market value of $835,000 or less, with a partial exemption up to $860,000. Buyers generally must be Canadian citizens or permanent residents, have lived in BC for the required period, and have never owned a principal residence anywhere in the world.

• Newly Built Home Exemption. A full exemption applies to qualifying newly built homes valued at $1,100,000 or less, with a partial exemption up to $1,150,000. You do not need to be a first-time buyer.

Thresholds and eligibility rules can change, so confirm current details with the BC government or your lawyer.

Legal or Notary Fees

You will need a lawyer or notary to handle the transfer of title, registration, and the flow of funds. Fees vary, so ask for a quote early. Disbursements, such as title search and registration fees, are typically charged on top.

Title Insurance

Many lawyers recommend title insurance, which is a one-time cost that can protect against certain title problems. Ask your lawyer what it covers and what it costs.

Home Inspection

A home inspection is usually paid for by the buyer, and it is one of the best investments you can make before removing subjects. Costs vary with the size and type of the home.

Appraisal and Mortgage Costs

Your lender may require an appraisal, and in some cases it is paid for by the buyer. If your down payment is under 20%, mortgage default insurance is required, and the premium is usually added to your mortgage. Ask your mortgage professional to explain every cost before you sign.

Adjustments at Completion

Property taxes, strata fees, and sometimes utilities are prorated between the seller and buyer as of the completion date. If the seller has prepaid something, you will reimburse them for your share, so these adjustments can add to your closing costs.

Strata-Specific Costs

If you are buying a condo or townhome, there may be move-in fees or refundable deposits charged by the strata, and your first strata fee payment will be due soon after you take possession. Ask your realtor about these during your strata document review.

GST on New Construction

GST may apply to the purchase of a newly built home or a presale. Whether a rebate applies depends on your situation, so ask your lawyer or accountant early and confirm whether GST is included in the price.

Home Insurance and Moving Costs

Lenders require home insurance, and you will want it in place by the time you take possession. Add in moving costs, utility hookups, and any immediate repairs or updates you plan to make.

A Note for Non-Canadian Buyers

Special rules and additional taxes may apply if you are not a Canadian citizen or permanent resident. Speak with a real estate lawyer before you make an offer.

How Much Should You Set Aside?

The right number depends on the price, the property type, and your situation, so a precise figure is something a lawyer, mortgage professional, and realtor can estimate for you once you have a specific home in mind. A good rule is to build a realistic buffer into your budget so closing costs and early repairs do not strain your finances.

Frequently Asked Questions

Who pays property transfer tax in BC? The buyer pays PTT, generally at the time title is registered.

Is the Home Buyer Rescission Period fee a closing cost? No. It is a separate fee of 0.25% of the purchase price that applies only if a buyer exercises their rescission right within three business days of an accepted offer.

Do I pay my realtor at closing? Realtor remuneration is set out in the service agreement and the listing, and arrangements vary. Ask your realtor to explain exactly how it works for your purchase.

The Bottom Line

Knowing your closing costs before you make an offer means no surprises on completion day. We are happy to help you sketch out a realistic budget for buying in South Surrey or White Rock.

This post is general information about closing costs in BC and is not legal, tax, or financial advice. Rates, thresholds, and fees change, and your costs will depend on your specific purchase, so confirm current details with the BC government, a real estate lawyer or notary, an accountant, and your mortgage professional.