Expenses of buying a condo

expenses of buying a condo

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.

Things to consider when buying a condo in Vancouver

condos in vancouver

Buying a condo or a townhouse is a lot different than buying a detached house. Some of the differences are strata corporation, maintenance fees, common property vs strata unit and bylaws. In this article I am going to talk about some of the things your should consider when buying a condo unit in Vancouver. This will hopefully serve you as a guide to buying and owning a condominium.

First of all what is a condominium? A dictionary definition of a condominiums is: a building or complex of buildings containing a number of individually owned apartments or houses. In today’s terms we refer to condominium unit (one part of a whole condominium) as a condo. Technically townhouses, lofts and studios are all condo units or condos for short.

A question that I get asked a lot is “what is the difference between a condo and an apartment?”.  Chances are, if someone is using either one of these terms they are usually referring to a condo unit. However there is a difference, condo is usually referred to a strata building where individual owners own condo units. Apartment is a unit in a building where all units are owned by the same owner and are rented out to the tenants. Think of small low-rises where all of the units are for rent.

Condo buildings are usually governed by a Strata Council. The job of a Strata Council is to act as the managing body for the Strata corporation; make daily decisions that enable the strata corporation to operate smoothly; and operate within any restrictions created by the Act, Regulations, bylaws, or a majority vote of the owners. The Strata Council is comprised of the residents of the building that are elected on the annual basis.

The Strata Council also hires a Management Company to manage the maintenance of the building, keep record of all documents and strata meetings, manage finances of a Strata Corporation (the building) and help Strata Council operate the building.

Each strata building operates under a different set of bylaws. Bylaws are restrictions as to what is and what is not allowed in the building. Most common bylaw restrictions have to do with rentals (some buildings allow rentals and other don’t) and pets (some buildings could have restrictions on size of pets) in the building. Make sure to check the bylaws of the building before buying a condo there.

Strata buildings usually consist of Strata Units and Common property. Strata unit is your condo unit with its flooring, drapes, appliances etc… Common property is everything that’s shared between all residents of the building (roof, hallways, elevators, lobby…etc).

Residents of the building have to pay maintenance fee. Maintenance fee is a monthly fee that contributes to 2 funds. Operational fund is a fund that deals with day to day operations of the building (cleaning, landscaping, light bulbs). Contingency fund is a fund for a larger future projects (roof replacement, pluming, windows replacement). Strata fees are different from a building to building. They could be anywhere from $60/month to $700+/month. Make sure the check Maintenance fee amount when searching for a condo.

Condos could make great starter homes and turn out to be awesome investments. In my opinion owning a condo in Metro Vancouver beats renting any day of the week.

Contact me today if you are looking to buy a condo in Greater Vancouver area!