Closing costs in BC
Closing costs catch a lot of buyers off guard. On a $490,000 home in Prince George, they can add $7,000 to $20,000 on top of your down payment. Here is where each dollar goes.
Frequently Asked Questions
What is the BC Property Transfer Tax and how much will I pay?
The Property Transfer Tax (PTT) in BC is 1% on the first $200,000 of the purchase price, and 2% on the amount from $200,000 to $2,000,000. On a $490,000 home, that works out to $2,000 plus $5,800, for a total of $7,800. First-time buyers purchasing a home under $835,000 for use as their primary residence are fully exempt from the PTT. This is one of the more meaningful financial benefits available to first-time buyers in BC.
What legal fees should I budget for?
A real estate lawyer or notary handles the title transfer, registration, and funds disbursement. In Prince George, legal fees for a standard purchase typically run $1,000 to $2,000 depending on the complexity of the transaction and who you use. This usually includes title insurance, which protects you against undisclosed title defects, survey errors, and certain types of fraud. It is not expensive and worth having.
Do I need a home inspection and what does it cost?
A home inspection is strongly recommended for any resale property. A thorough inspection covers the structure, roof, foundation, plumbing, electrical, heating and cooling systems, and insulation. In Prince George, expect to pay $400 to $600 for a complete inspection. The cost is modest relative to what it can tell you about a home's condition before you commit. Court-ordered foreclosure sales sometimes do not allow inspections, which is a real risk factor to weigh into your offer price.
When exactly do I have to pay closing costs?
Closing costs are paid on or shortly before the completion date. Your lawyer will send you a statement of adjustments a few days before closing, showing exactly what is owed. You need to have funds available to wire to your lawyer in advance so the transaction can complete on time. The mortgage funds flow from the lender to your lawyer to the seller. Your closing costs are a separate amount that comes from your own funds.
What are adjustments on the statement of adjustments?
Adjustments are costs divided between buyer and seller based on the possession date. The most common example is property tax. If the seller has already paid property taxes for the full year and you are taking possession partway through, you owe the seller a credit for the remaining portion. Strata fees work the same way on condo or townhome purchases. Adjustments are usually a few hundred to a couple thousand dollars and are calculated by your lawyer.
Is there GST on a home purchase in Prince George?
On resale homes, there is no GST. GST applies to new construction, including newly built homes and substantially renovated properties. If you are buying a brand-new home directly from a builder in Prince George, budget 5% GST on the purchase price, though you may qualify for a partial GST rebate if the purchase price is under $450,000. Your lawyer and mortgage broker will flag this if it applies to your purchase.
What other costs should I budget for?
Home insurance must be in place on completion day, and your lender will require proof of it. Budget $1,500 to $2,500 per year for standard home insurance in Prince George. Moving costs vary depending on whether you are moving locally or from another city. And if you are getting a high-ratio mortgage with less than 20% down, you will also pay CMHC mortgage insurance. The CMHC premium is not paid at closing; it is added to your mortgage principal, so it affects your monthly payment rather than requiring cash upfront.
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