The average closing cost in British Columbia is roughly $28,380. A good rule of thumb is to calculate 2-4% of the final home sale price.
Closing cost stats in B.C.
- Average home sale price in March 2021. $946,000 (ranges from $1,123,300 in Greater Vancouver to $328,743 in South Peace River)*
- Average total closing cost. $28,380*
- Expected closing cost range. $18,920 to $37,840*
- Percentage of closing cost to home sale price. 2-4%
*Excludes the goods and services tax (GST).
Remember, these averages are based on sample data. Your closing costs may vary based on your lender, the size of your loan and whether you’re paying in cash.
What are the closing costs for a homebuyer in B.C.?
Below is a breakdown of closing costs you may encounter.
|Type of cost||Estimated amount||Mandatory expense?||Description|
|Adjustment costs||Varies, but set aside around $500||Mandatory if applicable|
|Legal fees||$1,000-$1,500 (varies depending on the complexity of the purchase)||Mandatory|
|Disbursements||Starting at $100||Mandatory|
|Home inspection||$350-$750||Not mandatory (but strongly recommended)|
|Home insurance||$800-$1,200 (annual)||Likely mandatory|
|Mortgage default insurance||Varies||Mandatory if down payment is less than 20%|
|Land survey and Building Location Certificate (BLC)||Varies||Depends|
|Title insurance||Around $300||Depends|
|Estoppel/information certificate||Around $35||Likely mandatory if you’re buying a strata property (i.e. condo)|
|Mortgage prepayment penalty||Varies based on the terms of your mortgage||Depends|
|Moving costs||Varies||Not mandatory|
|Switching/setting up utilities||Varies||Depends|
|Goods and services tax (GST)||5% of the purchase price||Mandatory if you’re buying a newly built home|
|Property transfer tax (PTT)||Varies||Mandatory|
What is PTT and how does it affect my closing costs?
PTT is the property transfer tax you would need to pay based on the fair market value of the property you’re purchasing. On average, buyers in British Columbia pay around $16,920 in PTT.
The tax is a sliding scale tax and works like this: you pay a 1% tax on the first $200,000 of the property value, 2% on the portion up to and including $2 million and 3% on the portion greater than $2 million. If you’re buying residential property valued at more than $3 million, you pay an additional 2% on the portion greater than $3 million.
For example, for a home valued at $946,000, the PTT calculation would be as follows:
- 1% on the first $200,000 = $2,000
- 2% on the balance of $746,000 ($946,000 – $200,000) = $14,920
- $2,000 + $14,920 = $16,920 (total PTT)
The PTT for a home valued at $3,500,000 would be calculated as follows:
- 1% on the first $200,000 = $2,000
- 2% on the portion greater than $200,000 and up to $2 million is $36,000. You get this amount by first calculating the portion ($2,000,000 – $200,000 = $1,800,000), then calculating 2% of that portion ($1,800,000 x 2% = $36,000).
- 3% on the portion greater than $2 million and up to 3.5 million is $45,000. You get this amount by first calculating the portion ($3,500,000 – $2,000,000 = $1,500,000), then calculating 3% of that portion ($1,500,000 x 3% = $45,000)
- An additional 2% on the portion greater than $3.5 million is $10,000. You get this amount by first calculating the portion ($3,500,000 – $3,000,000 = $500,000), then calculating 2% of that portion ($500,000 x 2% = $10,000).
- Add everything together ($2,000 + $36,000 + $45,000 + $10,000) and you get $93,000 as your total PTT.
Some homebuyers may be eligible for PTT exemption or partial exemption, such as first-time homebuyers and buyers of newly built homes. Visit the B.C. government site to find out whether you qualify.
Do I have to pay GST when buying a home in B.C.?
In B.C., GST is a 5% federal tax that is payable on the sale of new or substantially renovated properties, such as a presale high-rise condominium or a newly constructed house. Sometimes, GST is already included in the sale price of the home, so be sure to check with the builder.
- A home is considered substantially renovated if at least 90% of the interior was replaced or removed.
Is there a GST rebate?
Yes. If you purchase a newly built home with a sale price of $350,000 or less, you are eligible for a 36% rebate on the 5% GST you pay, for a maximum rebate of $6,300. This rebate is reduced on properties ranging from $350,000-$450,000, and anything above $450,000 is not eligible for any GST rebate.
Compare mortgage lenders in British Columbia
What about realtor fees?
When you buy a home, it is standard practice for the seller of the home to pay your real estate agent’s commission.
How do closing costs in British Columbia compare with the rest of Canada?
The closing costs for buying a home in British Columbia are among the highest in Canada because of its higher average housing price. In terms of a property or land transfer tax, the tax rate in B.C. is similar to those charged in Ontario, Quebec and Manitoba.
Closing costs are inevitable when you’re buying a home in British Columbia. The exact amount will vary, but generally speaking, try to budget at least 2-4% of the final sale price. Your biggest cost will likely be the PTT. If the house is newly built, you will have to keep in mind GST, which is 5% of the home price. Talk to your lawyer or real estate agent to learn more about your closing costs.
Want to learn more about mortgages? Head to our guide here.
- The Canadian Real Estate Association National Price Map
- Government of British Columbia Property transfer tax
- Daily Hive BC home sales in 2021 forecast to return to 2016’s red hot volumes 26 January 2021
- Real Estate Board of Vancouver 35 ways home buyers sellers and owners can save money 26 January 2021
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