By Ashley Macintosh and Susan Pockett | Peak to Pier Real Estate Group
Closing costs when buying a home in B.C. can include property transfer tax, legal or notary fees, inspections, appraisal costs, insurance, and adjustments for prepaid property expenses. New homes may also involve GST. Budget for these expenses separately from your down payment, confirm any exemptions or rebates, and keep funds available before completion as well as on closing.
How much should you budget beyond your down payment?
The Financial Consumer Agency of Canada suggests preparing for upfront or closing costs of approximately 1.5% to 4% of the purchase price. On an $800,000 home, that represents $12,000 to $32,000.[1]
Use that range as a starting point, not a quote. A tax exemption can reduce the amount considerably. GST on a new home or other transaction-specific expenses can push it higher.
Build a budget for the actual property and your circumstances. Separate taxes, professional services, adjustments, and moving expenses so you can see what is included and when each payment is due.
Deposit, down payment, and closing costs: what is the difference?
Your deposit is money paid according to the purchase contract. It is normally credited toward the purchase price and forms part of your down payment.
Your down payment is the portion of the purchase price you contribute rather than borrow through the mortgage. Closing costs are additional expenses associated with the purchase.
For example, if your planned down payment is $160,000 and you have already paid a $40,000 deposit, the remaining down payment is generally $120,000. You still need funds for closing costs.
Your lawyer or notary calculates the final amount required after accounting for your deposit, mortgage proceeds, and adjustments. Do not count the deposit twice when estimating your total cash needs.
For an overview of the steps from preparation to possession, explore our guide to buying a home in Vancouver.
Property transfer tax: a significant part of the budget
B.C.'s general property transfer tax uses the following rates.[2]
A further 2% applies to the residential portion of value above $3 million. The tax is generally based on fair market value when the property is registered, with specific rules for certain transactions, including qualifying presold strata units.[2]
On an $800,000 purchase where the price equals fair market value, the general tax before exemptions is $14,000: $2,000 on the first $200,000 and $12,000 on the remaining $600,000.
Property transfer tax is separate from annual property taxes. You may need to budget for the transfer tax and an adjustment for annual taxes already paid by the seller.
First-time buyers: confirm the exemption before counting on savings
Being a first-time buyer does not automatically mean paying no property transfer tax.
When the entire transfer qualifies, homes valued at $500,000 or less can receive a full exemption. Above $500,000 and up to $835,000, the exemption is $8,000. It gradually decreases above $835,000 and below $860,000; at $860,000 or more, no relief is available under this program.[3]
A fully qualifying first-time buyer purchasing an $800,000 home would therefore pay $6,000 rather than $14,000.[3]
Eligibility also depends on personal and property requirements, including citizenship or permanent residency, B.C. residency or tax-filing history, previous ownership of a principal residence, property characteristics, and occupancy. If only part of the ownership qualifies, the exemption may be reduced.[3][4]
Ask your lawyer or notary to confirm eligibility before treating an exemption as money available for your purchase.
New homes: check GST and property transfer tax separately
New construction needs a closer look because GST and property transfer tax have separate rules and relief programs.
New or substantially renovated homes purchased from a builder generally involve GST. Confirm whether the stated price includes the tax, assumes a rebate, or requires additional funds at completion.[6]
B.C.'s newly built home exemption may eliminate property transfer tax on qualifying principal residences valued up to $1.1 million. Partial relief is available above $1.1 million and below $1.15 million. You do not have to be a first-time buyer, but citizenship or permanent residency, property size, and occupancy requirements apply.[5]
The federal first-time home buyers' GST/HST rebate can provide full GST relief on eligible new homes valued up to $1 million. Relief decreases between $1 million and $1.5 million, with no first-time buyer rebate at $1.5 million or more. Agreement dates and other buyer, construction, and occupancy conditions matter.[6]
Qualifying for one program does not establish eligibility for the other. Also confirm whether the builder will credit a rebate or whether you must fund the tax and apply afterward.
Legal or notary fees: request an itemized quote
Your lawyer or notary handles the legal work needed to complete the purchase. This can include title review, ownership and mortgage registration, financial adjustments, and transferring funds.
Ask whether the quote includes:
Professional fees and applicable taxes.
Title searches and registration charges.
Other disbursements.
Title insurance, if required or recommended.
Additional work associated with your purchase or financing.
An advertised professional fee may not represent the entire bill. Complex title issues, additional mortgages, or unusual contract terms can require extra work.
Inspections and appraisals: different purposes, different payments
A home inspection helps you understand the property's condition. The cost depends on the home's size, type, and scope of work. Some properties warrant specialist assessments for matters such as drainage, structure, electrical systems, or septic systems.
An appraisal helps the lender assess the property's value for financing. Ask your mortgage professional whether one is required and whether you will pay for it.
These expenses may arise before completion. Keep money available during the offer and investigation stages rather than assuming every cost will be collected on closing.[1]
Closing adjustments: account for prepaid expenses
Closing adjustments allocate certain property expenses between buyer and seller.
If the seller has prepaid annual property taxes, you may need to reimburse them for the portion covering your responsibility period under the contract. Strata fees and other prepaid expenses may also require adjustments.
The amount depends on the dates, payment history, and contract terms. Your lawyer or notary records it on the statement of adjustments.
Ask for an estimate early enough to prepare your funds. An allowance in an initial budget is useful, but it is not the final amount.[1]
Insurance, moving, and financing expenses
Your wider purchase budget should include home or condo insurance, moving costs, strata move-in charges or deposits, utility setup, and immediate repairs.
For a condo, discuss personal coverage with an insurance professional. The strata corporation's policy does not replace your own insurance needs.
Ask your mortgage professional about any lender or brokerage charges. If mortgage default insurance is required, confirm whether the premium is being added to the mortgage or paid upfront; a financed premium still affects your borrowing cost.[7]
Also review any buyer representation agreement for amounts you may be responsible for paying. Keep a separate reserve for expenses after possession.
Use our Mortgage Calculator to explore payment scenarios, then confirm the figures and additional costs with your mortgage professional.
Example: buying an $800,000 resale condo
This example assumes the price equals fair market value, no GST applies to the sale, and there is no additional foreign-buyer tax. The first-time buyer column assumes the entire transfer qualifies for the $8,000 exemption.[2][3]
The service amounts below are illustrative budgeting allowances, not provider quotes. Insurance, financing charges, representation fees, special levies, and unexpected expenses are excluded.
With a $160,000 down payment, the illustrative total personal funds would be $179,500 or $171,500 respectively, before the excluded expenses. A deposit already paid toward that down payment is part of those funds, not an additional amount.
Some expenses would be paid before completion; others would be collected through the lawyer or notary. Replace the allowances with actual quotes and estimated adjustments before relying on the total.
When a standard estimate may not be enough
New construction, higher-value homes, complex financing, and specialist investigations can change your budget substantially.
Certain foreign entities and taxable trustees may owe an additional 20% property transfer tax on their proportionate residential interest in specified B.C. regions, including Metro Vancouver, subject to exemptions. Purchase eligibility and tax treatment require individual legal review.[8]
For a presale, have your lawyer review the contract's GST treatment, adjustments, and other buyer-payable charges. Do not assume every developer uses the same terms.
Questions to answer before making an offer
How much cash is available after setting aside the down payment?
What property transfer tax applies to this property?
Which exemptions or rebates have been confirmed?
Does the price include GST, where applicable?
What do the legal, inspection, and insurance quotes include?
Are there buyer-paid financing or representation charges?
Which expenses must be paid before completion?
How much will remain for moving, repairs, and emergencies?
Explore our home-buying tips for more guidance on comparing properties, reviewing documents, and preparing an offer.
Buyer FAQs
Are closing costs included in my down payment?
No. Your down payment contributes toward the purchase price. Closing costs require a separate budget.
Is my deposit an additional closing cost?
Normally, no. The deposit is credited toward the purchase price and generally forms part of your down payment. Your lawyer or notary accounts for it in the final funds required.
Can I add closing costs to my mortgage?
Do not assume you can. Some financing expenses, such as an eligible mortgage default insurance premium, may be added to the loan. Many purchase costs require available cash. Confirm your funding arrangements with your mortgage professional.[7]
Do first-time buyers pay property transfer tax in B.C.?
Some do. Eligibility and property value determine the relief available. Even a fully qualifying first-time buyer can have tax payable when the property is worth more than $500,000.[3]
Do I pay GST on a resale home?
An ordinary sale of previously occupied residential housing is generally GST-exempt. Exceptions can arise, including some substantially renovated properties. Ask your lawyer to confirm the treatment of the specific sale.[9]
Does a property transfer tax exemption also remove GST?
No. Provincial property transfer tax exemptions and federal GST rebates are separate programs with different eligibility rules.[5][6]
When do I need to pay closing costs?
Inspections and other investigations may be paid during the buying process. Your lawyer or notary will specify when the remaining completion funds must be delivered. Plan for that deadline rather than waiting until possession day.
Let's plan your buying budget
At Peak to Pier Real Estate Group, we can help you understand the buying process, identify costs to investigate, and coordinate the next steps with your mortgage and legal professionals.
Contact Ashley Macintosh and Susan Pockett to discuss your budget, timeline, and the kind of home you are looking for.
Guiding you home – from Peak to Pier.
This article provides general information and is not personalized financial, mortgage, tax, or legal advice. Tax rules, exemptions, and lending requirements can change. Consult your lender or mortgage broker and a lawyer, notary, or tax professional about your circumstances. Budgeting examples are illustrative and do not replace quotes or a final statement of adjustments.
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