Working with a lot of first time home buyers I get this question a lot – “What expenses will I encounter when I buy my first condo?”.
When buying a condo unit there are a lot of things to consider. See my blog post on that subject here. Not least of which are expenses associated with the purchase. In this article I will break down expenses of buying a condo or a townhouse.
First, lets consider closing expenses. These are the expenses that are due on the day closing day for your purchase or shortly thereafter.
- The lawyer and notary fees. The fees range depending on the company you use. The fees would also differ based on the complexity of the deal. The fees are different from one deal to another but from what I’ve seen they are usually anywhere between $850 to $1,300.
- The property transfer taxes. In British Columbia the property transfer taxes are as follows: 1% on the first $200,000 of the purchase price and 2% on the balance. For example: if the property is $600,000 the property transfer tax is $10,000. However if you’re a first time buyer, buying a property for your primary residence (not an investment property). And the property is under $475,000 the property transfer tax does not apply.
- The inspection. I always advise my clients to do a professional inspection on the property they are buying. Condo inspections are usually anywhere between $450 and $1000. Again the price depends on the inspector you use as well as the size and sometime the age of the condo.
- GST. The GST tax applies only to brand new developments. If you are purchasing a condo from the developer chances are there will be a GST tax. Current GST tax in British Columbia is 5% of a total purchase price.
- Annual property taxes. Yes, condos have property taxes too. You will be responsible for paying property taxes from the adjustments date until December 31 of that year.
Here are some additional expenses you will encounter as a condo owner:
- The strata fees. As a condo owner in a strata building you will be responsible for the payment of the strata fees. The fee you pay monthly usually goes towards current maintenance of the building (operational fund). Things like minor maintenance, light bulbs, cleaning, landscaping etc… are included under operational fund. The second portion of the money goes into a savings fund (contingency fund). This money is saved in case of repairs to the building such as: plumbing update, roof replacement, windows replacement etc…
- The insurance. Most stratas will require residents to purchase their own home insurance.
- The utilities. Most of the time hot water and natural gas (if there is a fireplace) are included in the monthly maintenance fee. Sometimes heating is also included in the maintenance fee. However each resident is responsible for their own electricity.
- Phone, TV and internet. Sometimes in new developments theses services would be free for the first year or two.
I hope this article gave you a better overview of expenses associated with buying a condo in Greater Vancouver.
DISCLAIMER: Keep in mind that non of the information in this article is guaranteed. Please, seek advice of a professional before acting upon any of the information.
Contact me today with your real estate questions Oleg Galyuk 604-565-7052.