11 costs to consider when buying a home

1. Appraisal fee

150$-200$. Fee for determining the property lending value for mortgage purposes (this is not necessarily the same as the property's selling price).

2. Building inspection fee

300$-700$. Your home structures and systems are examined by an inspector who then provides you with a written report. Although not obligatory, building inspections are often one of the conditions on the Offer to Purchase.

3. Property survey

1000$-1500$. The survey indicates boundaries and measurements of the land and positions of major structures and any visible or registered easements (i.e. driveways) or encroachments (i.e. neighbour's fence) on the property. The survey is usually non-necessary.

4. Legal fees and related expenses

1000$-1500$.  Ensure your notary's quote includes all related expenses, not just legal fees.

5. Mortgage Loan Insurance

If your downpayment is less than 20% of the property's purchase price, you will need to pay between 1,25% and 3,60% of the capital, plus applicable taxes, too. The mortgage loan insurance helps protect lenders against mortgage default. (SCHL)

6. Title insurance

250$. This is optional and covers problems that may arise due to survey irregularities, power of sale issues, undischarged mortgages and other issues relating to the property's previous owners.

7. Prepaid property tax and utility adjustments

You must reimburse the vendor for any prepaid property taxes or utility bills.

8. Home insurance

300$-500$/year. Home insurance protects your home and its contents.

9. Mortgage life insurance

Cost may vary. This is an optional insurance product. It protects your family's financial security by paying off all or a portion of your mortgage in the event of premature death of you or your spouse.

10. Sales tax

TPS/PST. Generally, GST is charged on new homes, but not on resale properties. Always ask before signing an Offer to Purchase.

11. Land transfer tax

Based upon the price of purchase of the property. Every Quebec municipality must collect duties on the transfer of any immovable situated within its territory. This tax is payable by the buyer and is calculated as follows:

In Montréal, the value brackets from January 1 to January 31, 2022, are as follows (source montreal.ca):

• 0,5 % of the first $ 53 200;
• 1 % of the next $ 53 200 to $ 266 200;
• 1,5 % of the next $ 266 200$ to $ 527 900;
• 2 % of the next $ 527 900 to $ 1 055 800;
• 2,5 % of the next $ 1 055 800 to $ 2 041 900;
• 3,0 % higher than $2,041,900;

As of February 1, 2022, an additional bracket for any tax base equal to or greater than $3 M is created and subject to the rate of 4%. The rate applicable for the portion of value from $ 2,059,000 is raised to 3.5%. 

Tax base value as of February 1, 2022 (source montreal.ca):

• 0,5 % of the first $ 53 200;
• 1 % of the next $ 53 200 to $ 266 200;
• 1,5 % of the next $ 266 200$ to $ 532 300;
• 2 % of the next $ 532 300 to $ 1,064,600 ;
• 2,5 % of the next $ 1 064 600 to $ 2 059 000;
• 3,5 % of the next $ 2 059 000 to $ 3 000 000;
• 4.0 % higher than $3,000,000;

Don't forget to consider general expenses such as moving and home decorating costs!!

We can give you many other tips. For more information about the first buying process, we invite you to visit Soon at Home here.