Looking at purchasing Real Estate in BC, many things to consider – one of these things is closing costs :
This may not be a complete list, but some of these are:
- BC PROPERTY TRANSFER TAX AND SPECULATION & VACANY TAX:
- The Buyer acknowledges their responsibility to pay transfer fees as prescribed by the Property Transfer Act of BC amounting to:
- a) 1% of the purchase price up to $200,000
- b) 2% of thepurchase price over $200,000 and up to $2,000,000
- c) 3% of the purchase price greater than $2,000,000 and up to $3,000,000
- d) 5% of the purchase price that exceeds $3,000,000.
- SPECULATION AND VACANCY TAX: ( has to be paid by Seller if applicable)
- Speculation and Vacancy Tax of 0.5% for Canadian Citizens and Permanent Residents, or 2% for foreign entities, may be applicable.
- GST: ( May be applicable on agricultural properties if there is a “Business” component).
- Typical clause in an offer are:
- Subject to the Seller obtaining and being satisfied, on or before [date], with professional tax advice regarding the Seller’s GST liability arising from the Seller’s sale of the Property. This condition is for the sole benefit of the Seller.
- The Purchase Price includes any GST applicable to the purchase and sale of the Property.
- GST: The Buyer and the Seller have been advised to seek professional advice regarding any question about GST liability, exemptions, or the right to apply for a rebate. If there is any GST Payable, it will be the responsibility of the Seller. This condition is for the sole benefit of the Buyer.
- The Seller(s) has previously obtained independent legal/accounting advice and warrants that the Goods and Services Tax is NOT applicable to the Purchase Price. This warranty shall survive and not merge on the completion of this transaction.
- OTHER:
- There is no Commission payable by a Buyer, commissions are paid by the Seller as agreed to in their listing contract. Buyer’s Agents are paid through the Seller’s agent .
- Legal costs approx: $1,500 to Lawyer plus disbursements, which include reviewing title, title insurance, registering tile at land titles, any municipal tax adjustments ( taxes are due July 1st for the period from January 01 to December 31st ), so a prorated adjustment is made depending on who paid the taxes and when completion is.
- Insurance cost: You should pay for your Insurance Binder up to 30 days in advance of closing (to be sure you have insurance on closing … in case of forest fires).
- Appraisal costs if needed – usually covered by the bank or lending institution.