The following is a summary of what the typical closing costs cover when
buying a residential property:
A. NOTARY FEES including:
-
receiving and reviewing contract of purchase and sale
-
obtaining confirmation of full names, residency status
and first time buyer status from purchaser
-
obtaining title search and common property search
-
obtaining confirmation of insurance coverage as per
instructions of Lender
-
agents attending at Land Title Office to obtain copies
of relevant encumbrances, subdivision plan or strata plan/special
resolutions and reviewing same with client
-
obtaining company search, if necessary
-
obtaining confirmation of payment of property taxes,
arranging to pay outstanding taxes, if necessary
-
obtaining confirmation re payment of maintenance fees
to strata corporation
-
obtaining Form A (Certificate of Full Payment),Section
36 Certificate and confirmation of move in/out fees or special resolution
from strata corporation
-
obtaining survey, including searching with prior
mortgage holders for survey and preparation of statutory declaration
drafting conveyance, mortgage and support
documentation, as follows:
-
-
freehold transfer
-
-
purchaser's and vendor's statements of adjustment
-
-
property transfer tax return or exemption
-
-
GST certificate
-
-
mortgage
and support documents
-
-
receipt
acknowledgement of mortgage terms
-
-
authority
to pay
-
- covenanter/guarantor clause
-
-
assignment of strata voting rights
-
- postponement of spouse or
guarantee of spouse if title registered in single name (if required by lender)
-
-
tender transfer documents to Vendor's solicitors on
appropriate undertakings
-
-
preparing preliminary report and requisition of funds
to Lender
-
-
preparing and reviewing 8 page preliminary report with
purchasers with support documents
-
-
perusing
and attending to execution of documents
-
-
agents attending at Land Title Office to obtain a
pre-registration index search and filing documents for registration
-
-
conducting post registration index search after receipt
of registration numbers
-
-
receipt
and disbursement of trust funds
-
-
reporting to realtor, to City re transfer and to strata
management company re Assignment of Voting Rights
-
-
reporting letter to Borrower, including copies of
registered documents, reporting letter to Lender confirming notarial opinion
as to validity of mortgage
-
-
obtaining state of title certificate and final
reporting to Borrower and Lender
all
other services incidental hereto
B. Survey Certificate
Survey Certificate
is required by the either you or your lender if your property is a
single family dwelling. A Survey
Certificate is prepared by a qualified BC Land Surveyor and sets out the size
of your lot and the foundations of your home.
This document ensures that your house is situated on your lot and not
encroaching on other properties. The
offices of Patricia D. Wright, Notary Public, can arrange to have this
done for you through one of the Land Surveyors who normally assist our
clients. A full copy of the
Strata Plan will be obtained by the offices of Patricia D.
Wright, Notary Public, if your property is a condominium setting out the
size and location of your strata lot in relation the other condominiums in the
project. It is imperative
to confirm that the legal description to the strata lot (condominium) you are
purchasing matches that of the Strata Plan.
C. Cost of the Mortgage
including
These
costs may be deducted from your mortgage proceeds at the time the Lender is
advancing the mortgage funds to the offices of Patricia D. Wright,
Notary Public.
D.
Fire Insurance Premium
It
would be unusual for you to assume the fire insurance coverage of the vendor.
Most purchasers will now obtain new fire insurance coverage and deal
directly with the insurance company.
The office of Patricia D. Wright, Notary Public,
will require the name of your agent, several days in advance of your
closing, in order to obtain the fire insurance binder which will be a
requirement of your Lender
E. Utility Hook-Ups
This
would cover such items as BC Hydro, telephone connections and cable.
These items are done directly by yourself as Purchaser and the office
of Patricia D. Wright, Notary Public, does not become involved.
F. Property
Purchase Tax
The
government imposes a Property Purchase Tax on the acquisition of real
property. The tax is calculated
at 1% of the first $200,000.00 of your purchase price and 2% on the balance
thereof. Should you be a first
time home buyer, and be financing at least 70% of your purchase price, you
may (should you meet all of the requirements) qualify for a one time
Property Purchase Tax exemption. Patricia
D. Wright will discuss this matter with you to determine the amount (if
any) of purchase tax you will be responsible for.
The
main requirements to be exempted from this tax as a First Time Home Buyer are
as follows:
-
you must never have owned a principal residence anywhere in the world;
you must have resided in the Province of British Columbia for 12 months
immediately preceding the purchase;
-
you must be a Canadian citizen or Landed Immigrant;
the purchase price must be within the specified amount (in the Greater
Vancouver area this amount is presently $275000);
-
your mortgage funding must be 70% or more of the purchase price with a
term of at least one year;
-
your property must not be oversized - we will be able to provide you
with more information as to the size;
-
in the first year after the purchase you will be limited as to the
amount of your prepayment under your mortgage in order to keep the Tax
exemption;
you must move into your new property within 90 days and live in the
property for a minimum of one year.
The
Provincial Government will usually follow up with a letter at the end of the
year to ensure that you are still residing in the property and to check on
your mortgage balance and payment history.
The office of Patricia D. Wright, Notary Public, will prepare
all the necessary forms required
to claim the exemption or to pay the tax.
G.
Property
Tax Adjustments
The
office of Patricia D. Wright, Notary Public, will calculate an
adjustment for the current years taxes. The
seller will be responsible for the property
taxes and any utilities billed through the City or Municipality separately
(such as water , sewer, garbage pickup) from January 1st till the
possession date. The Purchaser
will be responsible for these taxes and utilities from the possession date
until the end of the year. In the
City of Vancouver there is two tax billings, one at the beginning of the year
and one in the middle of the year. Therefore it is necessary that the taxes be
adjusted properly between the parties. In
addition, after the City or Municipality has issued a billing, even if it is
not yet due, most Lenders will require that payment be made at the time of
closing the transaction.
H. Strata Maintenance
Adjustments
If
your property is stratified, it may be necessary for the offices of Patricia
D. Wright, Notary Public to adjust the monthly maintenance fees between
you and the Seller. The Strata By-Laws may also allow the strata corporation to
charge such things as move in or move out fees and/or deposits to cover any
damages caused by moving. Each
strata corporation handles this differently however most of the time any move
in or out costs are covered on your statement of adjustments.
I. Applicable
Goods and Services Taxes
If
you have any reason to believe that the property may be new, renovated or
converted from or to commercial use, it
may be subject to Goods and Services Tax (“GST”) and you should contact Patricia
Wright, Notary Public, to discuss these matters..
There are may items to be aware of with respect to GST, and
accordingly, you may wish to speak to the Canada Customs and Revenue Agency
offices or your accountant should you have any specific concerns. Your
Contract of Purchase and Sale should set out who is responsible for payment of
the GST (yourself or the seller) and whether the GST is in addition to
the purchase price or if the purchase price is inclusive of the GST.
You may also be entitled to a GST rebate and your Contract will set out
if the GST is included in your purchase price, or if you have assigned your
GST rebate back to the seller. The
offices of Patricia D. Wright, Notary Public, will ensure all of the
necessary forms have been prepared on your behalf.
J. Land Title Costs to
-
search the title, common property, pre and post searches
-
register documents at the Land Title Office
-
order State of Title Certificates
-
pull any required documents from Land Title Office
-
execute Builders Lien or Corporate searches if required
K.
All Disbursements such as
L. UTILITIES
The
Statement of Adjustments for your transaction will not include
adjustments for electricity, gas, telephone or cable.
It is the responsibility of the seller and the buyer to
have final readings taken on the possession date and to adjust and settle
these matters directly between themselves.
M. PROPERTY
TAXES
If
the current year’s taxes are known, the tax adjustment will be based on the
actual taxes for the current year. If
the current year’s taxes are not known, the tax adjustment done by the offices
of Patricia D. Wright, Notary Public, will be based on the estimated
current year’s taxes. If this
property will be your principal residence you may be entitled to the Provincial
Home Owner Grant which will reduce your taxes by up to $470.00 per year (and
even more if you are a senior) subject to the annual Provincial Government
budget.
|
