The Extra Costs when Buying a Property

You are about to buy a property...below are the main extra costs: 

Lawyers Fees * (including dispursments, title, registration, documentation, etc) $1000 ­ - $1200 

Property Transfer Tax is calculated at a rate of 1% of the first $200,000, 2% of the balance.  For example on a $400,000 purchase: 1% of $200,000 = $2,000 2% of $200,000 = $4,000 $2,000 + $4,000 = $6,000 which will be owed at the time of closing 

Adjustments A prorated amount for things such as property taxes or prepaid expenses (ie alarm systems, utilities, etc).  Your lawyer will calculate these at the time of closing.   Example: Property taxes of $3000 and due July 1 for the current year Jan – Dec. If you take possession March 1, which is prior to taxes being paid, the Seller will owe you for 2 months taxes (Jan, Feb)  calculated as follows:  $3,000/12 months = $250 per month x 2 = $500** If you take possession October 1, which is after the taxes have been paid, you will owe the Seller 3 months taxes (Oct ­- Dec) $3,000/12 months = $250 per month x 3 = $750** 

GST is not applicable on MOST used homes. New homes, or ones with a business will likely have GST taxes applied to the purchase price. Due to the complexity of the laws, it is best to seek the advice of an accountant. 

Fire / Property Insurance* You will need insurance on your home and a quote can be provided by Insurance Companies 

Mortgage Fees* Talk to your lender / mortgage broker to ensure there are no hidden fees in arranging your new mortgage...or transfer fees or penalties on porting over an existing mortgage. Ask if the following is required by your lender: property survey ($800 ­- $1500), title insurance ($200 ­ -$300) and appraisal ($300 ­- $600) 

Note: cost of services vary depending on size, location and type of property. *For a for Lawyer, Accountant, Insurance or Mortgage Broker, I have recommendations for people who have proven track records and that I trust with an important transaction like this.

Carla Dahlen

Carla Dahlen

Personal Real Estate Corporation
CENTURY 21 Executives Realty Ltd.
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