Understanding Closing Costs When Buying a Detached Home in British Columbia

Buying a detached home in British Columbia is an exciting milestone—but it's also one of the most significant financial decisions you'll make. While most homebuyers focus on the down payment and mortgage, many overlook the closing costs, which can catch you off guard if you're not prepared.

In this blog, we’ll break down the key closing costs associated with purchasing a detached home in B.C., so you can budget with confidence and avoid last-minute surprises.

What Are Closing Costs?

Closing costs are the fees and expenses—over and above the purchase price—that buyers need to pay to finalize a real estate transaction. These costs typically arise just before or on the closing date, when legal ownership of the property transfers from the seller to the buyer.

For a detached home purchase in B.C., closing costs generally range from 2% to 5% of the home’s purchase price, depending on location, financing structure, and legal needs.

1. Property Transfer Tax (PTT)

The Property Transfer Tax is usually the largest closing cost in B.C. and is payable unless you qualify for an exemption (such as the First-Time Home Buyers’ Program or Newly Built Home Exemption).

PTT Rates:

• 1% on the first $200,000
  
  
  

• 2% on the portion from $200,001 to $2,000,000
  
  
  

• 3% on the portion from $2,000,001 to $3,000,000
  
  
  

• 5% on the portion above $3,000,000 (if the property is not your principal residence)
  
  
  

💡 Example: On a $1,200,000 detached home, your PTT would be:

• 1% on $200,000 = $2,000
  
  
  

• 2% on $1,000,000 = $20,000
  ✅ Total PTT: $22,000
  
  
  

2. Legal Fees and Disbursements

Hiring a real estate lawyer or notary is essential to ensure all documents are filed correctly, title is transferred properly, and your interests are protected.

• Legal fees: Typically range from $900 to $2,500, depending on complexity.
  
  
  

• Disbursements: Additional costs like title search, land title registration, and courier fees. Usually $300–$600.
  
  
  

3. Title Insurance

Title insurance protects you and your lender against potential defects or issues with the property’s title, such as undisclosed liens or encroachments.

• Cost: One-time premium of $150 to $400, depending on the home’s value.
  
  
  

✅ Often bundled with your legal fees and arranged by your lawyer or notary.

4. Mortgage-Related Costs

If you’re financing the purchase with a mortgage, there are a few extra costs to factor in:

• Appraisal fee: ~$300–$500 (may be covered by your lender)
  
  
  

• CMHC insurance premium (if down payment < 20%): This is added to your mortgage, but PST on the premium must be paid at closing.
  
  
  

• Mortgage registration fee: ~$75–$100
  
  
  

5. Home Inspection (Pre-Closing)

Although not mandatory, a home inspection is strongly recommended, especially for detached homes.

• Cost: $400–$700, depending on the home’s size and complexity.
  
  
  

✅ Helps identify issues like roof damage, foundation cracks, or outdated electrical systems before you commit.

6. Adjustments and Prepaid Costs

At closing, the buyer reimburses the seller for prepaid expenses, which may include:

• Property taxes (pro-rated)
  
  
  

• Utilities (if billed quarterly or annually)
  
  
  

• Strata fees (if applicable)
  
  
  

• Heating oil (for rural homes)
  
  
  

Your lawyer or notary will calculate the exact amounts during the conveyancing process.

7. Moving Costs and Other Incidentals

While not technically “closing costs,” don’t forget to budget for:

• Moving services: $500–$2,000+
  
  
  

• Utility hook-ups and service transfers
  
  
  

• New locks or home security systems
  
  
  

• Immediate repairs or upgrades
  
  
  

Closing Cost Summary (Example for $1.2M Detached Home in B.C.)

Final Thoughts

Buying a detached home in B.C. involves more than just negotiating the price. Understanding and planning for your closing costs can help you avoid stress and ensure a smoother transition into your new home.

If you're in the process of buying, make sure to:

• Get a detailed estimate from your lawyer or notary
  
  
  

• Review the statement of adjustments before closing
  
  
  

• Ask your real estate agent or mortgage broker for a cost breakdown early in the process
  
  
  

Need Help Navigating Your Home Purchase?Whether you're a first-time buyer or upgrading to your dream home, understanding your costs upfront can make all the difference. Reach out today for a personalized estimate or buyer consultation.