The average closing cost in Newfoundland and Labrador is roughly $4,021 after taxes or approximately 1-2% of the final home sale price.
Closing cost stats in Newfoundland and Labrador
- Average home sale price. $268,071
- Average total closing cost. $4,021
- Expected closing cost range. $2,680-$5,362
- Percentage of closing cost to home sale price. 1-2%
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.
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How much does tax affect the closing cost?
Buyers in Newfoundland and Labrador are fortunate to pay a nominal amount in taxes on the closing cost through a Land Transfer Tax (LTT).
In Newfoundland and Labrador, you get charged the LTT on the property value and mortgage amount. For properties and mortgages under $500.00 you get taxed a flat fee of $100. For properties and mortgages above $500.00 you get taxed a flat fee of $100 plus 0.4% on the amount of your mortgage.
For example, if you purchased a property for $280,000 in Newfoundland and Labrador and have a mortgage of $200,000, you would be charged the flat fee of $100 plus 0.4% on the $200,000 mortgage, which amounts to $800. When added together, you are paying a cumulative Land Transfer Tax of $900.
Please note that this does not include the 15% Harmonized Sales Tax (HST) that is enforced on the sale of new properties in Newfoundland and Labrador.
*Harmonized Sales Tax (HST)
Newfoundland and Labrador has a Harmonized Sales Tax (HST), which is essentially a combination of the GST (5%) and PST (10%). The HST is 15% and is only payable on the sale of brand new properties or properties that have been substantially renovated.
Is there an HST rebate?
Yes, there is a rebate that is available to first-time homebuyers in Newfoundland and Labrador. If you purchase a home with a sale price of $350,000 or less, you are eligible to receive a 36% rebate on the GST portion of the HST up to $6,300. There is no rebate for the PST portion of HST.
For example, if you bought a brand new property in Nova Scotia for $280,000, you would need to pay $42,000 HST. This cost can be broken down into $28,000 for the PST portion (10%) and $14,000 for the GST portion (5%).
On the GST portion of $14,000, you would be eligible to receive a 36% rebate. This is $5,040. You would get the entire amount, given that it falls below the maximum GST rebate of $6,300.
How do closing costs in Newfoundland and Labrador compare with the rest of Canada?
The closing costs for buying a home in Newfoundland and Labrador are among the lowest in Canada because of its relatively low average housing prices. Unlike a few other provinces in Canada that only charge GST on the sale of new properties, Newfoundland and Labrador charges HST, a higher tax rate, that can significantly drive up the closing costs.
Closing costs are inevitable when you’re buying a property. The exact amount will vary depending on what the final sale price is on your property in Newfoundland and Labrador. Not factoring in the HST, it is safe to budget 1-2% of the final sale price for closing costs as some of it will be going to the LTT. In cases where you buy a brand new property, you will have to pay HST and this can raise your closing costs as high as 16-18% (not taking into account the rebate).
Want to learn more about mortgages? Head to our guide here.