What Are My Other Costs When Buying a New Home?
Land (deed) transfer tax
When a home changes hands, many provinces and a few municipalities charge a property tax or title transfer fee. Rates are usually on a scale of .05% to 2.0% of the home’s value (the sale price) and can add thousands of dollars to the purchase price. In Halifax, it is currently 1.5%.
Click here for Deed Transfer Tax in Nova Scotia by County.
Appraisal Fee
Your lender may ask you to have the home appraised to confirm its market value. Fees vary depending on a property’s value and complexity, but are typically around $350.
*Some lenders will cover the cost of this, but if you don’t “ASK”…you don’t “GET”.
Legal Fees
A lawyer or notary will help protect your interests by reviewing your purchase agreement, searching the title, and ensuring that all documents are completed properly. Basic legal fees run around $800 plus disbursements (which typically include photocopying costs, title registration fees, courier, postage, etc). It is important that you verify these two costs with your lawyer. Fees and disbursements usually cost around $1,000-$1,200 all together.
Home Inspection
An inspection can help make you aware of issues related to a property’s structure and systems, such as plumbing and electrical, and recommended or necessary repairs. Fees range from $400-$500 + HST. An inspection is not mandatory, but is highly recommended. Sewer Inspections usually run around $350 +\-.
Home\Fire Insurance
Your lender and REALTOR® will require proof that the property is insured in case of fire or other damage. Insurance costs vary depending on the coverage needed, but budget at least $500 per year. Note that coverage for fire insurance does not include the value of the lot the house sits on, as it, in the event of total destruction by fire, would still be there. Insurance for total destruction is for the cost of replacing the “structure” on the land only. This information should be provided to your lawyer prior to closing.
Cost for newly constructed homes
If you are buying a brand new home, be prepared to settle any items not specifically included in the original agreement and price. Upgrades, paving and landscaping when requested are added to the price, but may not automatically be included in the mortgage commitment. Another thing to keep in mind is that unlike existing homes, new homes are subject to GST or HST, although this is often included in the purchase price. There is a federal rebate which reduces the GST (the federal part of the HST) to about 3.5% for homes valued at $350,000. This rebate typically goes to the builder as they have usually priced the home to take this rebate into effect.
Tax on Mortgage Insurance
If you have less than a 20% down payment, your lender will require that you obtain mortgage default insurance. You can roll the cost into your mortgage payments. You may be familiar with Canada Mortgage and Housing Cooperation (CMHC) but there are others, your mortgage specialist will assist you with this.
Title insurance
Title insurance can safeguard you against property fraud and problems with your property title and survey. Fees generally range from $150-$350.
Moving Costs
Before the big day, budget for all those last minute things: professional movers, van rental, having a locksmith re-key the locks (you don’t know how many keys are floating around and re-keying is much cheaper), cleaning supplies etc.
Connection Costs
Utilities, cable, phone, internet, it is better to make arrangements a couple of weeks in advance of your moving date, so there are no surprises on the big day! Check out MyRealtyAdvisors.ca under “Utilities” for all of the HRM contact information you need.
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