The average closing cost in Vancouver is roughly $25,000 after taxes or approximately 2-4% of the final home sale price.
- Average home sale price. $975,000-$1,050,000
- Average total closing cost. $25,000*
- Expected closing cost range. $20,000 to $42,000*
- Percentage of closing cost to home sale price. 2-4%
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.
Buyers in Vancouver pay an average of $17,500-$19,000 in property taxes in what is called the Property Transfer Tax (PTT). This PTT accounts for 1.5-2.5% of the total average closing costs in Vancouver. However, if you’re a foreign national or if you’re not a Canadian citizen/permanent resident, a 20% Foreign-Buyers Tax on the property cost will be added to your total. This can significantly alter the closing costs as a 20% tax on property can amount to hundreds of thousands of dollars in Vancouver.
The property transfer tax is a sliding scale tax and works like this: you pay 1% tax on the first $200,000 of the property value plus an extra 2% on the balance up to $2 million. Any amount greater than $2 million will incur a PTT of 3%.
For example, on the sale of a property valued at $975,000, you would be charged 1% on the first $200,000, which is $2,000. The remaining value, $775,000, would have a tax rate of 2%, which would equal $15,500. Add both of those values up for the total PTT which, in this case, is a combined total of $17,500.
If you’re a foreign national, buying this same $975,000 property, you will also be charged a Foreign-Buyers Tax of 20% which will amount to $195,000. Thus, this will bring your total closing costs to $212,500!
*Good and Services Tax (GST)
One thing you need to be mindful of when it comes to closing costs in Vancouver is that GST can be charged but not in all circumstances. In BC, GST is a 5% federal tax that is only payable on the sale of brand new properties. This can be on a presale high-rise condominium or on a newly-built home. The key here is that this tax is only applicable on a brand-new residence.
Yes, there is a rebate that is available to homebuyers in Vancouver. If you purchase a home with a sale price of $350,000 or less, you are eligible to a 36% rebate on the 5% GST you pay. This rebate is reduced on properties ranging from $350,000-$450,000 and anything above $450,000 is not eligible for any GST rebate.
Vancouver has the highest average housing cost in Canada and the closing costs for buying a home in Vancouver are above average on all properties. In terms of a property or land transfer tax, Vancouver is right in line with similar tax rates charged in Ontario, Quebec and Manitoba. However, on properties above $2 million, Vancouver has the highest closing costs in Canada because of the increase in the PTT on properties above $2 million to 3%.
Closing costs are inevitable when you’re buying or selling a property. The exact amount will vary depending on what the final sale price is on your property in Vancouver. It is safe to budget at least 2-4% of the final home sale price to closing costs as most of it will be going towards the Property Transfer Tax (PTT). In cases where you buy a brand-new property, you will have to pay GST and this can raise your closing costs to as high as 6-8%.
If you’re a foreign national buying property in Vancouver, you will be charged an extra 20% on the price of the property and this will elevate your closing costs into the hundreds of thousands of dollars.
Want to learn more about mortgages? Head to our guide here.