Kim Lee

How Much Are Closing Costs for Buying a Home?

How Much Are Closing Costs for Buying a Home
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How much are closing costs? Real estate agents get asked this question all the time, and the answer is always different.

Besides your down payment, closing costs are often your largest home-buying expenses. These costs are one-time fees you’re required to pay your mortgage lender when buying a home. The total amount can vary greatly, but on average closing costs are usually between 3% and 4% of your home’s purchase price. They include your property transfer taxes, title insurance, appraisal fees, and so much more.

In this post, we’ll discuss everything included in your closing costs, and what exemptions you may qualify for.

Closing Costs

Here’s a full list of the closing costs you can expect to pay, and how much they are:

Property Transfer Tax (PTT)

The PTT  (also known as the land transfer tax) is a tax based on your home’s fair market value when you register it with the Land Title Office. It is one of the main costs you’ll incur when closing on your home. This tax was created to deter real estate investors from buying and selling property to make a quick return.

Here’s how much your property transfer tax is:

Home Purchase Price

Tax Fee

First $200,000


$200,000 – $2,000,000


$2,000,001 – $3,000,000


Over $3,000,000


If you buy a home for $500,000, you can expect to pay $8,000.

(First $200,000 x .01, or 1%) + ($300,000 x .02, or 2%) = $8,000

Luckily, many home buyers are exempt from paying some or all of these taxes. The first-time home buyers’ program is particularly helpful here, and it’s just one of many property transfer tax exemptions available to Canadian property owners. 

Title Insurance

Your “title” is the legal ownership of your property or land. If there’s ever a dispute about whether you own your property (for example, an undisclosed heir claims they’re a partial owner), title insurance will keep you protected. You purchase title insurance through your lawyer, who will hire a title insurance company to run a title search of your property’s history—or just do it themselves.

In Vancouver, title insurance is usually $225 for a property costing less than $1,000,000.

Legal Fees

Buying a property has a lot of moving parts, and you’ll need a real estate lawyer to guide you through the process. Depending on how much work they have to do and how difficult it is, you should plan to pay anywhere between $500 and $1,500 in legal fees.

Property Survey

Both your lawyer and your mortgage lender require a current property survey certificate. Property surveys confirm the boundary lines and legal description of your property. This is usually included in your legal fees, and costs between $350 and $600, depending on your location, property type, and legal and geographical complications.

Home Inspection Fee

We strongly recommend getting a home inspection before buying. If there are electrical issues or the roof needs repairing, your home inspector will discover it so you’re not caught by surprise later. Once the inspection is done, you can ask the seller to make any repairs needed, or agree to pay for the maintenance costs. If the inspector finds a huge problem and the seller refuses to pay for it, you can cancel the contract.

Home inspections usually cost around $500.

Property Appraisal

Your mortgage lender will require you to get your property professionally appraised. Property appraisals assess if your home’s selling price is reasonable for the real estate market, helping your lender decide how much they’re willing to lend you.

A property appraisal fee is usually between $300 and $500. Sometimes lenders appraise the property themselves and waive the fee.

Property Taxes

Not to be confused with property transfer taxes, property taxes are taxes you pay by owning a property—in this case, your home. Property taxes are levies our government uses as a source of tax revenue, based on the market value of your home.

In 2022, the property tax rate is $2.69293 for every $1,000 of taxable value, or 0.269%. In other words, if your home has a fair market value of $500,000, you’ll pay $1,345 in property taxes for the year.

For closing costs, you’re usually just paying property tax adjustments. If the previous owners prepaid property taxes for the full year, you’re reimbursing them for what they paid. In other words, if you buy the property in July, you’ll reimburse the seller for six months of property taxes, or $672.50 ($1,345 / 2).

Estoppel Certificate Fee

If you’re buying a condo or strata unit, you’ll need an Estoppel Certificate. Along with your condo corporation’s financial statements, this certificate outlines the common fees you’ll have to pay, your condo, the reserve fund, the status of the seller’s payments, and more. Your lawyer or notary will notify you of anything unusual that the seller should first address.

An Estoppel certificate costs up to $100.

Mortgage Default Insurance

If you’re putting less than 20% down, your lender will arrange the mortgage insurance. Mortgage insurance can cost anywhere between 0.6% and 6.5% of your loan amount, depending on your circumstances.

Taxes on Newly Constructed Homes

If your home is newly built or recently underwent substantial renovations, you’ll have to pay a sales tax in addition to the purchase price. In some cases, the builder has already paid these sales taxes, so they may not apply to you. Also, if the purchase price of your home is less than $450,000, you might qualify for the Goods Service Tax (GST)/Harmonized Sales Tax (HST) New Housing Rebate, helping you recuperate some sales tax you pay at closing.

Interest Adjustments

Depending on when you close, you may need to pay an interest adjustment. For example, let’s say Jacqueline closes on her home on October 5th, but her first mortgage payment isn’t due until October 15th. She will need to pay for the payment accrued during those ten days. The amount she has to pay depends on her mortgage terms.

House Buying Cost Exemptions

There are several exemptions and rebates available to home buyers. We recommend asking your real estate agent, lender, or doing research on our government website to learn what you may qualify for.

To get you started, here are three exemptions and rebates you should know about:

First-Time Home Buyer PTT Exemption

The PTT exemption reduces or eliminates how much property transfer tax you’ll owe when buying your home. There are numerous requirements you must meet when you register your property, including:

  • You’re a Canadian citizen or permanent resident
  • You’ve never received a first-time home buyers’ refund or exemption
  • You must never have previously owned a principal residence
  • You have either lived in BC for a year or more immediately before the date you registered your property, or filed at least two income tax returns as a BC resident in the last six years.
  • The property must be your primary residence for one full year
  • You must move into your home within 92 days after registering your property

Newly Built Home Exemption

This exemption also reduces or eliminates how much PTT you’ll owe if you build a newly built home.

These homes include:

  • New condo units in newly built condominiums
  • A house or manufactured home constructed and affixed on vacant land
  • An already constructed home that gets removed from one parcel of land and affixed to another, as long as no one else occupied it since its removal
  • A home converted from an existing improvement on the land, like a warehouse converted into condos

To qualify, you must be an individual, not a corporation, and a Canadian citizen or permanent residence. Also, your home must:

Full exemption

Partial exemption

Have a fair market value of or below $750,000

Have a fair market value greater than $750,000, but less than $800,000

Be 0.5 hectares or smaller

Be larger than 0.5 hectares

Is your principal residence

If the property has another building other than your principal residence

GST Rebate

BC’s GST is 5%. If the purchase price of your new or previously sold home must be $350,000 or less, and it’s your principal residence, you qualify for the maximum GST rebate, which is 36% of that 5% GST. In other words:

($350,000 x .05, or 5%) x .36 or 36% = $6,300

If your home’s purchase price is between $350,001 and $450,000, and it’s your principal residence, you qualify for a partial GST rebate. The rebate gradually decreases based on the purchase price. Here’s the formula to calculate your partial rebate:

$6,300 x [$450,000 – home’s purchase price] / $100,000

How Much Are Closing Costs? Final Thoughts

Because there are so many taxes and fees involved in closing costs, the best you can do is estimate them. Also, exemptions and rebates can reduce the total amount you pay either before you close on your home, after, or both!

If you want to learn more exemptions, rebates, or closing costs, reach out to your Greater Vancouver realtor Kim Lee by sending us a message. We’re here to help you on your home-buying journey.

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Kim Lee (Vancouver Realtor)

As a Vancouver realtor, Kim Lee combines her love for people with her passion for real estate to provide guidance throughout the process and to building lasting relationships.