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Transaction Costs




Closing  costs to the sellers


1-Lawyer or Notary Fees and Expenses:

-attending to execution of documents.

2-Costs of clearing title, including:

-discharge fees charge by encumbrance holders,

-prepayment penalties

3-Real Estate Commission.

4-Capital Gain ( if applicable)




Closing  costs to the Buyers


1-Lawyer or Notary Fees and Expenses (attending to execution of documents)

2. Property Appraisal Fee

3.Land Survey ( if applicable)

4.Property Purchase Tax ( Property Transfer Tax)

5.Good and Services Tax

6.CMHC or Genworth Premiums ( non conventional mortgage)

7.Foreign Buyers Tax ( non residence only) 15%




Property Transfer Tax ( Property Purchase Tax)


The Property Purchase Tax in the Province of British Columbia is 1% of the first $ 200,000 and 2% of the balance for example if a property sells for $ 500,000 the buyer pays $ 8,000 in tax( $ 200,000 X 1% = $ 2000 + $ 300,000 X 2% =$ 6000 )however the First Time Home Buyers who buy properties under $ 425,000 might be qualified for total exemption and properties between $ 425,000 and $ 450,000 might be partially exempted ,

The amount of tax you pay is based on the fair market value of the land and improvements (e.g. buildings) on the date of registration unless you purchase a pre-sold strata unit. The tax is charged at a rate of:

  • 1% on the first $200,000,
  • 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000, and
  • 3% on the portion of the fair market value greater than $2,000,000.

For example, if the fair market value of a property is $450,000, the tax paid is $7,000.

If you’re a foreign entity or taxable trustee and the residential property is located in the Greater Vancouver Regional District, you also pay the 15% additional property transfer tax on the fair market value of your proportionate share. Your proportionate share is the percentage of interest you are registering on title with the Land Title Office.




1) GST on new homeWhen you buy a newly constructed home, condominium or townhouse, the entire purchase price, including land, is taxable. If the property is to be rented to tenants, the full 5% GST is charged on the purchase price. However, if the home is going to be your primary place of residence, it may qualify for a partial GST rebate, depending upon the sale price.

For homes costing $350,000 or less, you will receive a GST rebate of 36% of the GST paid, to a maximum of $8,750. That means you pay approximately 3.25% GST (not 5%) on the purchase price.

The rebate for new homes costing between $350,000 and $450,000 declines to zero on a proportional basis, using this formula:

Rebate = $8,750 x ($450,000 - Home Price)$100,000

New homes selling for more than $450,000 do not qualify for a GST rebate.

The seller is responsible for the GST payable, but most of the time the collection and payment of GST on a real estate transaction is defined at the time the contract is written whether the seller or buyer is paying for it. GST is due and payable when the real estate transaction is completed.

2) Substantially renovated home single transaction

When a builder sell the property in a single transaction, the GST rebate is the same as above. If in doubt, it is best to obtain a ruling from Canada Customs and Revenue Agency (CCRA).

3) GST on vacant land

Land that is purchased without a home on it is subject to GST. If you build a new home on the land, you will pay GST on the construction costs of the house, less any applicable rebate.

4) GST on resale home

You don’t have to pay GST on the purchase price of a resale residential home. A resale home is defined as residential property that has been occupied as a residence before you bought it.


What are the General Requirements to Qualify for Homeowner Mortgage Loan Insurance?

  • The home is located in Canada.
  • For CMHC-insured mortgage loans, the maximum purchase price or as-improved property value must be below $1,000,000.
  • You will typically have a minimum down payment starting at 5%. For a purchase price of $500,000 or less, the minimum down payment is 5%. When the purchase price is above $500,000, the minimum down payment is 5% for the first $500,000 and 10% for the remaining portion.
  • Normally, the minimum down payment comes from your own resources. However, a gift of a down payment from an immediate relative is acceptable for dwellings of 1 to 4 units. For eligible borrowers, additional sources of down payment, such as lender incentives and borrowed funds, are also permitted. Check with your lender for qualifying criteria and availability.
  • Your total monthly housing costs, including Principal, Interest, property Taxes, Heating (P.I.T.H.), the annual site lease in the case of leasehold tenure and 50% of applicable condominium fees, shouldn’t represent more than 32% of your gross household income (Gross Debt Service (GDS) ratio). Use the GDS form to calculate how much you can afford in housing costs to be eligible.
  • Your total debt load shouldn’t be more than 40% of your gross household income. The Total Debt Service (TDS) ratio is your P.I.T.H. + the annual site lease in the case of leasehold tenure and 50% of condominium fees (if applicable) + payments on all other debt / gross annual household income. Add up your costs and determine your Total Debt Service ratio using the TDS form.
  • You also need to think about closing costs (for example, legal and land transfer fees) equivalent to 1.5% to 4% of the purchase price. Many first-time buyers are surprised by these costs. That is why, when qualifying for CMHC’s Mortgage Loan Insurance, ourHome Purchase Cost Estimate worksheet form will help you calculate your total homebuying costs.

    Closing costs include but are not limited to one-time items such as lawyer fees, GST and PST as applicable, land transfer tax if applicable, adjustments, etc., to allow you to complete the house purchase.
  • Other requirements may apply and are subject to change. For details, please contact your lender or mortgage broker.



How Much Does CMHC Mortgage Loan Insurance Cost?

To obtain CMHC Mortgage Loan Insurance, lenders pay an insurance premium. Typically, your lender will pass these costs on to you. Your lender will give you the exact price when you apply for a mortgage.

The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums.

Remember: without mortgage insurance you may avoid the insurance premium but you’ll typically pay much higher interest rates and additional administrative fees. At the end of the day, for the vast majority of borrowers, the cost of CMHC Mortgage Loan Insurance is more than fully offset by the savings achieved.

Up to 25% premium refund may be available when CMHC Mortgage Loan Insurance is used to finance an Energy-Efficient Home.

Premium on Total Loan Premium on Increase to Loan Amount for Portability
Up to and including 65% 0.60% 0.60%
Up to and including 75% 1.70% 5.90%
Up to and including 80% 2.40% 6.05%
Up to and including 85% 2.80% 6.20%
Up to and including 90% 3.10% 6.25%
Up to and including 95% 4.00% 6.30%
90.01% to 95% —
Non-Traditional Down Payment**
4.50% 6.60 %

Premiums in Manitoba, Ontario and Quebec are subject to provincial sales tax. The provincial sales tax cannot be added to the loan amount.

** Down Payment Requirements — Traditional sources of down payment include: Applicant’s savings, RRSP withdrawal, funds borrowed against proven assets, sweat equity (<50% of min. required equity), land unencumbered, proceeds from sale of another property, non-repayable gift from immediate relative, equity grant (non-repayable grant from federal, provincial or municipal agency). Non-traditional sources of down payment include: Any source that is arm’s length to and not tied to the purchase or sale of the property, such as borrowed funds, gifts and 100% sweat equity.









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