When buying a new home, it’s important to remember that there will be extra expenses to meet besides the mortgage.
In addition to their down payment, purchasers should have sufficient funds to cover the following unavoidable closing costs:
- the property transfer tax, which is 1% of the first $100,000 and 2% on the remainder;
- Harmonized Sales Tax (HST) liability: the GST rules that used to apply to residential property also apply under the 12% HST, which also applies to non-residential sales and leases in the same way that the 5% GST did; more detailed information is downloadable regarding HST here;
- home inspection fees, which can cost between $300 and $400;
- reimbursement of the seller for the portion of the property tax that has already been paid, which could be as high as $2000; and
- legal fees, which may total between $800 and $1,200.