Closing Costs and Incentives in Canada

A home is one of the largest single purchases you will ever make in your lifetime. In addition to the price of the home itself, there are several other costs associated with purchasing a home. These are collectively referred to as closing costs. While they generally include similar elements, the closing costs can differ based on where in Canada your home was purchased.

We will closely examine what closing costs are, what costs are included and the kinds of costs you will be responsible for in each province or territory. We will also take a look at the rebates and incentives available to first-time homebuyers.

1. What are closing costs?

Closing costs are expenses that both homebuyers and sellers must cover above the purchase price of the house. These costs are required in order to complete any real estate transaction. The term “closing costs” acts as an umbrella term for an array of costs that are incurred in order to close a real estate deal.

1.1. Examples of closing costs

Closing costs often vary from one province or territory to the next. Here are some examples of the most common closing costs.

Mortgage default insurance premium: If your down payment is less than 20%, you must obtain mortgage default insurance, for which you must pay a premium.

Land Transfer Tax: In most of the provinces and territories, anyone who purchases land or a property is required to pay the Land Transfer Tax to the provincial government. This tax is due upon the closing of the purchase, and the rates are the same for both residents and non-residents of Canada. The Land Transfer Tax rates are different in each province, and the city of Toronto has a separate Land Transfer Tax of its own.

Lawyer / legal fees: The real estate lawyer who provides legal assistance to the buyer also collects a fee for services rendered. This also includes document preparation and transfers, which are referred to as disbursement costs. The fee varies based on the nature and scope of the work done and the law firm itself.

Title registration fees: The buyer pays a fee when the titles for the land or property are officially registered with the local land registration office and the municipal government.

Mortgage application: In most cases there is no charge to apply for a mortgage with a lending institution and your mortgage broker is usually compensated by the bank or credit union. In some circumstances, such as private lending; there might be an application or administrative fee added at closing.

Applicable taxes: Federal and provincial taxes, such as the GST and HST come into play when you are buying a home. These taxes are usually included in the price of the property and vary from one province to the next. In some provinces, first-time homebuyers may be eligible for a tax break.

Property taxes / utilities: Property taxes and utilities can be prepaid, and in most cases, the seller will cover a year’s worth of payments for you. This is sometimes applicable to utilities as well. You must reimburse the seller for the amount of the payments at the time of closing.

Home appraisal: When you apply to refinance your mortgage, the lender may require you to get your property appraised. Most lenders require first-time homebuyers to submit an appraisal if they are unsure of the cost of the property. In some situations, the lender may offer to cover this cost for you.

Home inspection: Before you decide to purchase a property, it is best practice to have a complete home inspection conducted. The inspection will identify structural and other outstanding issues with the property. Costs can vary and some lenders require home inspection reports for mortgage applications.

Home insurance: When you apply for your mortgage, the lender will ask you for proof of insurance before they provide you with any funding. In some parts of Canada, this is a legal requirement for all homebuyers.

Title insurance: This insurance acts as a protection for the buyer against any issues regarding the land or property after the purchase is consummated. The cost often varies, but is usually between $250 and $300 on average.

Estoppel or status certificate: If you are purchasing a condo unit, the owner is often required to provide you with an information package. The package usually features a complete description of the unit, relevant insurance information, a list of rules and regulations, bylaws, the likelihood of expense increases and various other elements that could impact condo fees.

Land survey fee / Certificate of location: The seller is required to provide an updated property survey or certificate of location before your mortgage is finalized. If they cannot, you may be responsible for paying for one yourself. In some cases, proof of title insurance can be submitted instead of a survey. The costs involved can vary based on the type and size of the property.

Realtor fees: If you opted to work with a real estate broker or agent, they will be paid their fees at closing in the range of 1-5% of the price of the home. The exact amount to be paid varies.

2. Rebates and incentives

First-time homebuyers have access to a number of rebates and incentives that are available across the country. Some provinces and territories may offer their own distinct rebates and incentives, which are described in detail in the next section. Here is a look at the federally-run programs, their functions and what you will need to qualify for them.

2.1. First-Time Home Buyer Tax Credit

In 2009, the Canadian government passed a new law that enacted the First-Time Home Buyer (FTHB) Tax Credit, a tax break designed to help Canadians purchase their first home. If you are a first-time homebuyer, the FHTB Tax Credit offers a rebate on a portion of the amount of the purchase price of a new home. In order to be eligible for the FHTB Tax Credit, you cannot have owned any property anywhere in the world.

The HBTC in its simplest form is a rebate of $750 on your income tax bill. While that may not seem like a large amount, there is more to it. With the FTHB Tax Credit, you can write off up to $5,000 of the cost of your home on your tax form. If you do that, you must then apply the lowest possible federal tax rate of 15% against that $5,000, which results in a tax credit of $750. When you apply the FTHB Tax Credit to a tax return where you stand to earn a tax refund, you would then earn an additional $750.

It’s important to note that if you purchase a home with your spouse, both of you would be eligible for the FHTB Tax Credit on your respective tax returns. However, you would have to share the $750 rebate, and it does not have to be split evenly between you and your spouse.

2.2. First-Time Home Buyer Incentive

The Canada First Time Home Buyer Incentive is a new offering, which will officially begin accepting applications on September 2, 2019, is designed to assist first-time homebuyers reduce their monthly mortgage costs without adding to their expenses. In order to apply for this incentive, you must be a Canadian citizen or permanent resident and adhere to the following criteria:

• You must submit a minimum down payment on a home
• Your total maximum income does not exceed $120,000 annually
• Your borrowing limit is limited to four times your maximum income

If you are able to meet these three requirements, you can then apply for a 5% or 10% shared equity mortgage offered by the federal government. A shared equity mortgage is a mortgage product where the federal government shares in any increases or decreases to your property’s value.

2.3. Home Buyers’ Plan

Another incentive for new homeowners is the Home Buyers’ Plan (HBP). This program allows participants to withdraw up to $35,000 from their RRSP within a one-year period.

The money would be used towards purchasing or building a new home, and can be used for yourself or relative with a disability. The $35,000 can be repaid at any time, but must then be repaid within 15 years of the initial withdrawal.

Originally, the maximum amount that could be withdrawn for the HBP was $25,000. A proposal was made to increase the amount to $35,000, and was approved as part of the federal budget in March 2019. The new $35,000 limit applies to all withdrawals made after March 19, 2019.

2.4. GST/HST New Housing Rebate

If your home is newly built, or your purchased a property that was renovated or required extensive renovations, you may qualify for the GST/HST New Housing Rebate. The rebate itself applies to a portion of the GST or HST that was paid on the cost of either of the following:

• Building the new home
• The renovations
• The conversion of a non-residential or non-traditional property into a standard residential property

3. Closing costs and rebates across Canada

In the first section, we discussed what closing costs are and provided examples of the costs you may incur when you purchase a home. While these examples are among the most common types of closing costs, they differ based on where in Canada your home was purchased. Some provinces even offer special rebates for first-time homebuyers.

In this section, we will take a closer look at the types of closing costs you will be responsible for paying in each province and territory, in addition to some province-specific rebates and incentives where applicable.

3.1. Closing costs and rebates in Ontario

Here are some common closing costs you will be responsible for if you purchase a home in Ontario.

Ontario and Toronto Land Transfer Taxes: Ontario’s Land Transfer Tax is applied to all properties purchased throughout the province. However, if your property was purchased in Toronto, you will also have to pay the Toronto Land Transfer Tax, plus an administration charge of $84.75 ($75 plus HST). Toronto is presently only city in the entire province that has its own separate Land Transfer Tax for real estate transactions.

The Ontario and Toronto Land Transfer Tax rates differ slightly based on the value of the property, as shown in the tables below.

 

Lawyer / legal fees: These fees vary based on the amount and types of work performed. Many real estate lawyers offer fixed fees for home purchases or sales, in addition to the fees for document preparation and transfers, mortgage registration and the deed to the property.

Realtor Fees: These fees vary based on the price of the property. Realtor fees are most often paid by the sellers of the property and will be adjusted and paid on closing by the sellers lawyer.

Title Insurance: This is insurance to protect you against any issues related to the title of your property. It can cost anywhere from $250-$350 for most average prices homes. If you have a mortgage, your lender will most likely require title insurance as a part of your mortgage conditions. Title insurance is easily obtained through your lawyer at closing.  

Property taxes, condo fees and utilities: When you purchase a new home or condo unit, the previous owner may have already covered the costs for the utilities and condo fees for a period extending beyond the closing date. If that is the case, adjustments are sometimes made in favour of the previous owner to recoup the money for those costs. You may be responsible for reimbursing the previous occupant as part of your closing costs.

Non-resident speculation tax: Introduced by the Ontario government in April 2017, this 15% tax is applied to homebuyers in the Golden Horseshoe region who are not Canadian citizens or permanent residents.

Ontario Land Transfer Tax Refund: If you are a first-time home buyer in Ontario, you may be eligible to receive a refund on all or a portion of the Land Transfer Tax. To claim this refund, you:

• Must be at least 18 years old
• You and your spouse cannot have owned a home or had an interest in one anywhere in the world

The amount of money you receive is based on when the property was purchased. For all transactions that occurred prior to January 1, 2017, the maximum amount of the refund is $2,000. If the transaction took place on January 1, 2017 or any time after that date, the amount of the refund increases to $4,000.

3.2. Closing costs in Quebec

If you purchase a home in Quebec, you will be responsible for the following closing costs:

Mortgage insurance: Required only if your down payment is below 20%. Not only will you be required to pay an insurance premium, you will also be responsible for a subscription fee. The fee ranges from 0.5% to 2.9% of the total amount of your mortgage.

Property transfer duties: After the signing of the bill of sale, the city your home is located in collects the property transfer duties, which are similar to the Land Transfer Taxes in other provinces. The duties vary based on the type of property purchased.

The rates differ based on the higher of the property’s estimated value after a municipal evaluation or its sale price. The table shows the tax rates for all areas outside of Montreal.

Within the city of Montreal, the rates are as follows:

According to the OACIQ, there are some instances where a city or town may choose to introduce a by- law that allows for a rate above 1.5% for properties valued above $500,000. If this action is taken, the rate cannot exceed 3%.

Notary fees: If you are planning on purchasing a property in Quebec, you will require the assistance of a notary. The notary prepares and authorizes official documents for the purchase of a home, including the registry of the sale at the land registry bureau, the bill of sale and the mortgage deed. Costs for notary services can vary, but the provincial average is generally around $1,200.

Lawyer / legal fees: Retaining a real estate lawyer is a must when purchasing a property. Not only do they serve as your legal advocate throughout the purchase process, they also assist with the drafting and transferring of important legal documents. Fees vary based on the law firm and the nature of the work done. There may also be disbursement costs associated with legal documentation.

Home appraisal: Sometimes required by lenders as part of the mortgage application process, a professional home appraisal helps a homebuyer ensure that the seller’s price is reasonable. The cost is generally around $350, but can vary based on the organization providing the appraisal.

Home inspection: A must before closing on a property purchase, many homebuyers demand a full inspection of the property as one of the conditions of sale. The inspection should be conducted by an individual who is a member of a fully accredited organization. A professional home inspector should also have professional insurance, which protects the client from mistakes or oversights that could occur. Once again, the cost for this service varies, but the average cost for a home inspection is usually around $500.

Other applicable taxes: All properties purchased in Quebec are subject to the GST of 5% and the QST of 9.975%. You will also have to pay the applicable property, school and municipal taxes upon the closing date. The notary will determine and supply you with the rates and amounts for each tax.

3.3. Closing costs in Manitoba

Here is a look at the closing costs you will have to pay after closing on a home purchase in Manitoba.

Land Title Transfer Title Tax: All properties sold in Manitoba are subject to the Land Transfer Title Tax, which is due when the transaction closes. The higher the price of the dwelling, the higher the tax rate will be. The table below shows what the tax rate will be in relation to the price of the property purchased. Unlike other provinces, Manitoba does not offer any rebates on the Land Transfer Title Tax.

Lawyer / legal fees: When purchasing a property, it’s important to work with a real estate lawyer. Not only can they provide you with vital information on the legal aspects of property transactions and ownership, they can also help with the preparation and transferring of key legal documents. The fees associated with legal work varies based on the nature and quantity of the work completed.

Fire insurance: When you apply for a mortgage in Manitoba, lenders will require a fire insurance certificate before you begin living in your new home. In most cases, the amount required for the fire insurance certificate will either be the cost of replacing the property or the complete amount of your mortgage. The cost varies based on the insurance provider, location, size of your property and other personal items that are being insured.

Home insurance: A must for any property owner, home insurance covers any damages and losses your home and personal assets sustained in the event of an accident or disaster. Some lenders require home insurance as part of the mortgage application process. If you purchased a single-family home, your home insurance policy covers the entire dwelling. If you purchased a condo unit, the insurance policy covers your liability and any improvements made to the unit. Home insurance costs vary, and often depend on the policy and the provider.

Other applicable taxes: Some closing costs are subject to GST and PST. Bear this in mind when you prepare your personal budget and scan the market for affordable prices for legal and other services associated with closing costs.

3.4. Closing costs and rebates in Saskatchewan

Homes purchased in Saskatchewan are subject to the following closing costs:

Land Title Fee and registration: When you purchase a property in Saskatchewan, the Information Services Corporation (ISC) charges a Land Title Fee. The Land Title Fee is a charge of $3 per for every thousand dollars of the property’s value to ensure the title is registered in your name. This fee is usually paid to your real estate lawyer along with any additional legal costs incurred. You will also have to pay $160 to have your mortgage registered with the Land Titles Registry. Lenders will not approve your mortgage until the registration is complete.

Home appraisal: Some lenders request a full home appraisal as part of the mortgage application process. A good home appraiser or appraisal company should be fully licensed and certified in order to supply with accurate information. The cost of a home appraisal varies from one provider to the next, but the provincial average is usually around $200.

Home inspection: A professional home inspection is often required by many lenders as part of your mortgage application. Home inspections are carried out by certified individuals and help to identify areas in the property that may require replacement or repair. Costs will vary based on the service provider.

Lawyer / legal fees: Retaining the services of a certified real estate lawyer is vital before, during and after you close on your new home. Lawyers draft and transfer important legal documents in addition to acting as your legal advocate through the process. Fees vary based on the firm used and work required and most firms can supply with you a quote for their services by phone or email.

Fire insurance: Another element required for the completion of a mortgage application, fire insurance covers damages to your home resulting from fire. It is usually purchased in tandem with standard home insurance and it covers the cost of the repair and replacement of the property. Fire insurance policies and associated costs generally vary from one insurance provider to the next.

Property taxes/utilities: In most cases, the previous owner of your home will have covered a year’s worth of property taxes and utility costs. If they have, you will be responsible for reimbursing them for these costs.

3% Down Payment Assistance Program: This service of the National Affordable Housing Corporation (NAHC) is designed with the first-time Saskatchewan homebuyer in mind. Homebuyers enrolled in the program are provided with a down payment assistance grant of 3% to assist them with the purchasing of a home from an NAHC partner housing program. The grant is non-repayable and applicants must have an annual income of under $90,000 to enroll.

3.5. Closing costs and incentives in Alberta

If you’re looking to purchase a property in Alberta, these are the closing costs you’ll be responsible for covering.

Land transfer registration fee: Alberta is one of the few provinces that does not have its own Land Transfer Tax. Despite that, you will still have to pay a land transfer registration fee. The fee has a base value of $50 plus an extra dollar for every $5,000 of a property’s value.

Mortgage registration fee: This fee is similar in structure to the land transfer registration fee, but is applied to the registration your mortgage instead. The fee’s base value is $50, plus an extra dollar for every $5,000 of the value of your mortgage.

Lawyer / legal fees: Real estate lawyers are just one of the many knowledgeable professionals who can assist you with real estate transactions. They prepare and transfer documents and educate you about your legal rights before, during and after the home purchasing process. Costs vary based on the quantity of work done and the law firm itself.

Home appraisal: Some lenders request a professional home appraisal as part of your mortgage application. When you get your home appraised, a certified home appraiser will assess your property and then provide you with an estimate of its value. The cost of the appraisal varies by the provider, and in some cases, the lender will offer to cover this cost for you.

Home inspection: Like home appraisals, some lenders will request a complete home inspection when you apply for your mortgage. A certified home inspector will survey your property, assess its condition and indicate areas that require renovation or repair in their report. The provincial average price for home inspections is around $500, but be sure to have some extra money set aside in case the cost exceeds that amount.

Home insurance: Lenders also require all homeowners to have a home insurance policy by the time they close on their purchase. The coverage provided by home insurance covers the cost of replacing your home in the event of a disaster. Costs vary based on the provider and the policy you purchase.

Title insurance: This type of insurance provided you with coverage for losses in case the title for your property is found to be faulty or inaccurate. Property taxes / utilities: In some cases, the previous owner of your home prepays the property tax and utility charges. These advance payments usually cover a month to a year’s worth of property tax payments. When you assume ownership of the house, you will be responsible for paying them back.

PEAK Housing Initiatives: The Public Essential and Key Workforce (PEAK) program is designed to help families purchase their first home. It was introduced in 2009 to help employees in middle-class households find affordable housing in Alberta. PEAK participants are also provided with a second mortgage with the intention of facilitating a down payment of up to 5% on a home.

3.6. Closing costs in British Columbia

Here is a look at the closing costs you will have to cover if you purchase a home in British Columbia.

Property Transfer Tax: All homes purchased in British Columbia are subject to the province’s Property Transfer Tax. The tax is based on the The rates are shown in the table below.

According to the provincial government’s website, all residential properties valued at $3 million or more are charged an additional 2% tax. Furthermore, if you are purchasing a property deemed as mixed residential or a farm, the aforementioned 2% tax only applies to the residential part of the property. In addition to these taxes, all foreign buyers must pay a separate property transfer tax if they purchase any property in B.C.

Deposit: The deposit is generally around 5% of the purchase price of a home, and can be counted as part of your down payment. When the seller accepts your offer for the property, you will have to provide your real estate brokerage with the deposit within 24 hours of the acceptance of the offer. The deposit will be held by the brokerage until the deal is consummated.

Home appraisal: Often required by lenders for your mortgage application, a complete home appraisal provides you with an estimate of the property’s value. The appraisal is conducted by a certified professional and the costs vary. Sometimes, your lender may offer to cover this cost for you.

Home inspection: Another requirement for mortgage applications, a full home inspection determines whether or not your property is structurally sound. It also identifies potential areas of improvement around the property. The costs often vary from one home inspection provider to another.

Survey fee: A survey certificate is another form of documentation often required by lenders. The survey certificate clearly indicates the boundaries covered by a property and ensures that the property remains within them. It’s important to note that there are two types of property surveys – building location and monumental – and the lender could ask you to provide either one. In some cases, the previous owner of the property may be able to provide you with a copy of the survey certificate. If they are unable to do so, you will be responsible for covering the cost for a new one.

Lawyer / legal fees: Real estate lawyers ensure that all aspects of the home purchasing process are being conducted lawfully. Notaries are retained to ensure key documents are properly signed by all parties involved. Most law firms charge an hourly rate for their services, plus additional fees for document drafting and transfers. Notaries tend to charge a fee per document or signature.

Property taxes / utilities: In some cases, when a home is purchased, the previous owners will have already covered a year’s worth of property taxes and utility charges. If that is the case, you must compensate the previous owners for all the necessary charges.

Other applicable taxes: New homes purchased in British Columbia are subject to the province’s Goods and Services Tax (GST). Rebates and incentives: At one point, B.C. had a first-time homebuyer incentive of its own known as the Home Owner Mortgage and Equity Partnership. However, the provincial government chose to discontinue the program effective March 31, 2018. There are presently no plans to introduce a replacement program.

3.7. Closing costs and rebates in New Brunswick

Homes purchased in New Brunswick are subject to the following closing costs:

Real Property Transfer Tax: According to Service New Brunswick, real property “refers to land and attachments (buildings).” The Real Property Transfer Tax for homes purchased in New Brunswick is 1% of the property’s assessed value. All home buyers must pay this tax, and if they fail to do so, the deed cannot be officially registered.

Registration fees: Every parcel of land with documentation in New Brunswick must be registered with the Land Registry. When a parcel of land is registered, the provincial government will charge you a fee of $85 per document on each parcel of land you have purchased. Examples of documentation include mortgages and land transfers. If you have purchased multiple parcels of land with properties on them, a real estate lawyer may be able to help you consolidate them into a single parcel to save on costs.

Lawyer / legal fees: You will require the services of a real estate lawyer to ensure that all aspects of the home purchasing process are handled in a lawful manner by all parties involved. Real estate lawyers also provide valuable advice about the legal proceedings for home ownership. They also assist with disbursement procedures, which includes the drafting, preparation and transferring of important legal documentation. The costs can vary depending on the scope of the work performed and the law firm itself.

Title search: A title search is a process that involves the recovery of documentation that provides proof of a real estate transaction. The documents recovered show the property’s purchase and regulatory history and proves that the seller has the legal right to sell it. Every property purchased in New Brunswick requires a title search with a minimum of 40 years. Prices for title searches may vary, but generally cost between $100 and $500 on average.

Survey fee: As part of the mortgage application process, some lenders may ask to see a land survey. The survey provides a full view of a property, carefully outlining its boundaries. In some cases, the original owner of the property can supply you with a copy of the survey, but if they are unable to do so, you will have to obtain one yourself for a fee. Costs for land surveys may vary.

Property taxes / utilities: When you purchase a property, the seller may have already covered the property taxes and utility costs for up to a year. If they have, you must reimburse them for this cost.

Fire insurance: Before your mortgage application is approved, the lender may require you to obtain fire insurance for your property. Most fire insurance policies allow you to get coverage for the entire replacement value of your home. Bear in mind that costs and rates can vary based on the type of policy and the insurance provider itself.

Home Ownership Program: The Government of New Brunswick has its own rebate for first-time homeowners. The Home Ownership Program provides participants with financial assistance in the form of a repayable loan of up to 40% of the price of an existing property, or $75,000 for the construction of a new home. According to the program’s website, those who wish to apply for this incentive must:

• Be a first-time homeowner or be living a substandard housing unit -have a total household income of less than $40,000
• Be a New Brunswick resident and residing in the province for at least one year
• Be in good financial standing, have a good credit rating and meet all the criteria for obtaining a mortgage from a lending institution

3.8. Closing costs and rebates in Newfoundland and Labrador

Here is a list of closing costs you will have to pay for all homes purchased in Newfoundland and Labrador.

Mortgage registration fee: When you obtain a mortgage for a newly-purchased property, the mortgage must be registered with Service NL. According to Service NL’s official Schedule of Fees, registering a mortgage worth more than $500 will cost you $100 plus another 40¢ for each additional $100 or part of $100. Another $100 charge is applied if the value of your mortgage exceeds the value of your property.

Land registration fee: While Newfoundland and Labrador do not have a land transfer tax, there is a land registration fee that you must pay to Service NL. The fee is $100 plus 0.4% of the property’s value that exceeds $500. Home appraisal: Some mortgage lenders will request a home appraisal as part of the application process. A certified home appraiser will visit your property and assess its value based on its structural condition. Fees can vary based on the company conducting the appraisal.

Lawyer / legal fees: Real estate lawyers assist you with the legal aspects of purchasing a home and also prepare, file and transfer key legal documents. Retaining the services of a lawyer is a must before, during and after the purchase process. Fees for legal services can vary based on the amount of work done, disbursement costs incurred and the firm itself.

Property taxes: When a home is purchased, the seller often pays the first years’ worth of property taxes for the home. As the buyer, you must reimburse the seller for these payments.

Title search: A title search shows a property’s entire purchase and regulatory history. It also provides proof that it is within the seller’s right to place it on the market and sell it. There are fees associated with title searches, and the usually range based on the quantity and types of documents required. You can also search the province’s Registry of Deeds to find the information you need. Per Service NL’s website, the cost is $5 to obtain the search results online, plus an additional $5 for each registration you want to see the deeds for. If done in person at Service NL’s offices, there is no search fee but you will be charged 25¢ per page for every document photocopied.

Registration of deeds: The majority of deeds linked to a property have a registration fee applied to them by Service NL. While some deeds do not require any payment, others require fees ranging from $5 to $100 per document, plus additional fees. The entire fee schedule can be viewed here.

Home Purchase Program (HPP): The Home Purchase Program (HPP) is a government program providing a grant of $3,000 to all qualified applicants. The money would be used towards a home purchase of up to $400,000 including HST, and applied to new builds and existing properties. The goal was to provide this funding for the first 330 applicants, with the government allocating $1 million towards administering the grants. The HPP has since received its maximum number of applicants and is now closed.

2.9. Closing costs and rebates in Nova Scotia

Nova Scotia has its own set of closing costs for home purchases. There is also a rebate available for first- time homebuyers.

Deed transfer tax: When you close on your home purchase, the city or town your home is located charges a tax to have the deed officially transferred to your name. Per Halifax.ca and Service Nova Scotia, the deed transfer tax is 1.5% of the purchase price of the property in most parts of the province. It must be paid upon closing, and late fees are applied if it is not paid on time.

Home inspection: Having the property inspected before you officially close on it is not only an important part of the purchase process, but it is also required by many mortgage lenders. The inspection is performed by a certified home inspector and ensures that property is structurally sound. This information, plus descriptions of areas that require replacement or repair are outlined in the inspector’s report. Costs for home inspections often vary from one company to the next, and the fee is due upon the completion of the inspection.

Property taxes: The previous owner of your home may have already covered the property tax for up to one year, as property taxes can be prepaid. If this is the case, you will be responsible for reimbursing them for these payments when the deal is closed.

Septic tank and well inspection: This fee is both optional and situational. Some properties in Nova Scotia are situated on or near wells or large septic system or tank. If your home is one of these, the well or septic system must be properly inspected before the closure of the sale. Fees vary depending on the company providing the inspection.

Radon testing: This fee applies mostly to properties located within the Halifax Regional Municipality (HRM). According to NovaScotia.ca, radon “is a radioactive gas that is formed naturally by the breakdown of uranium.” It enters homes through walls and basement floors and is a leading cause of lung cancer. To test your property for traces of radon, you can purchase a radon testing kit in a store or hire a company to perform the test for you. The costs for both the kit and the professionally-done radon test vary.

Oil heating / fuel fees: Many homes in the province have propane-powered fireplaces or use oil heating. If your home is one of these, the previous owner will ensure that the property’s oil tank is full. Like property taxes, you must reimburse them for this cost at the time of closing.

Lawyer / legal fees: There are many legal elements associated with purchasing a new home. Retaining the services of a certified real estate lawyer not ensures the purchase process is handed legally, it also provides you with protection should any issues arise. The lawyer can also assist with disbursement tasks, such as drafting, preparation, review and transferring of documentation. Fees range from one firm to the next, plus applicable disbursement costs.

First-time homebuyer rebate: Similar to the ones offered in other provinces, Nova Scotia has its own rebate for first-time homebuyers. The rebate applies to newly-built homes, and in order to qualify for this rebate, you:

• Cannot have owned or occupied a property anywhere in Canada in the last five years
• Must use the property as your primary residence

According to Access Nova Scotia, the rebate “is equivalent to 18.75% of the provincial HST, 1.31% of the purchase price of capital stock in a housing cooperative or up to $3,000 on newly-built homes.”

3.10. Closing costs and rebates in Prince Edward Island

When you close on a home purchase in Prince Edward Island, you will be responsible for the following closing costs:

Real Property Transfer Tax: All homes purchased in Prince Edward Island are subject to the Real Property Transfer Tax. According to PrinceEdwardIsland.ca, anyone who wishes to register a deed of conveyance must pay a tax. The tax itself is 1% of either the property’s purchase price or its assessed value, whichever is greater.

Deed / mortgage registration: When you purchase a property, you must have both the deed and the mortgage officially registered. The registration fee varies based on the value of the property, as shown in the table below. The amounts are consistent with those featured on PrinceEdwardIsland.ca.

When you register your mortgage, the same fees outlined above apply to its value, with the only difference being a flat charge of $103 for the registration of a collateral mortgage.

Lawyer / legal fees: Working with a certified legal professional is a crucial part of the home buying process. It ensures all aspects of the transaction will be conducted in accordance with provincial legal standards. Fees may vary and they depend on the firm retained and disbursement costs incurred via the drafting, preparation and transferring of legal documents.

Home inspection: Sometimes required as part of the mortgage registration process, a home inspection ensures that the property is structurally sound. The home inspector will provide you with a detailed report upon completion, a copy of which you can submit to a lender with your mortgage application. The fees for this service vary from provider to provider.

Home appraisal: When you apply for a mortgage you may also be asked to submit an appraisal report for the property. Home appraisals are conducted by certified individuals to determine the approximate value of the property. Expect variable costs based on the company that provides the service.

Property taxes / utility fees: In some cases, the previous owner of the property will have prepaid some or all of these expenses, usually for up to a year. Upon the closure of the deal, you will have to reimburse the seller for these costs.

Real Property Transfer Tax Exemption: Like some other provinces, Prince Edward Island offers a rebate for first-time homebuyers. Known as the Real Property Transfer Tax Exemption, this program has a number of eligibility requirements for applicants. They include:

• They occupy the property as their principal residence
• The purchase price of the property or its assessed value, whichever is higher, does not exceed $200,000
• In the case of multiple purchasers, each one qualifies as a first-time homebuyer
• The Declaration for First-Time Homebuyers form is completed

3.11. Closing costs and rebates in Nunavut

The closing costs you will have to pay for a home purchased in Nunavut are as follows:

Property registration fee: All homes purchased in Nunavut are subject to a registration fee levied by the provincial government. For properties valued under $1 million, the fee is $1.50 for every $1,000 of the property’s value, with a minimum fee of $60. Homes valued at more than $1 million are charged a fee of $1,500 plus $1 for every $1,000 over $1 million, with a minimum value of $40.

Home inspection: Mortgage lenders may request a professional home inspection as part of your mortgage application. The inspection determines if there are any structural deficiencies around the property and identifies areas that require replacement, refurbishment or repair. Costs vary depending on the company performing the inspection.

Lawyer / legal fees: A real estate lawyer acts as your legal advocate before, during and even after the home purchase process. They ensure all parts of the process are being conducted in a legal manner while handling disbursement tasks such as drafting and transferring of documents. Fees vary based on the nature of work done and the law firm retained, in addition to disbursement costs.

Home insurance: It is vital to have a home insurance policy in place by the time you close the deal. The majority of lenders require it when you apply for a mortgage. Home insurance covers the cost of replacing your home should a disaster ever occur. Costs vary based on the policy you purchase and the insurance provider itself.

Nunavut Down Payment Assistance Program (NDAP): The Nunavut Down Payment Assistance Program (NDAP) is administered by the Nunavut Housing Corporation (NHC), and provides first-time homebuyers with a contribution of 7.5% of the down payment for a new home, up to a maximum of $30,000. Participants are responsible for covering the remaining 2.5%. As per the terms mentioned on the program’s website, in order to receive this funding, qualified applicants must:

• Be at least 19 years old -not own any residential property or have previously owned any residential properties in their locality during the past five years
• Not have previously received any funding for home purchases from the NHC during the past 10 years
• Be approved for a mortgage from a CMHC-sanctioned lending institution
• Be able to afford the home in question (determined via credit checks from the lender and the NHC)

In addition to these criteria, those who have outstanding rent or mortgage payments cannot qualify to receive the funding until these debts are paid off.

3.12. Closing costs and rebates in the Northwest Territories

If you plan on purchasing a home in the Northwest Territories, these are the closing costs you will be responsible for paying.

Land Transfer Tax: In the Northwest Territories, you will be charged a Land Transfer Tax based on the value of the property and the value of your mortgage. The table below outlines the tax amounts and is consistent with information from the provincial government’s website.

Lawyer / legal fees: Purchasing a home involves numerous legal aspects, and a certified real estate lawyer can help you navigate the legal landscape. Not only do they prepare and proofread key legal documents, they also act as your advocate throughout the entire process. The fees associated with legal services differ from one law firm to the next, and disbursement costs are charged for processing and transfers.

Property taxes / utility fees: When you purchase a home, the seller often prepays some or all of these expenses, usually for up to a year. When the deal officially closes, you will be responsible for reimbursing the previous owner for these costs.

Homeownership Entry Level Program (HELP): As its acronym implies, the Homeownership Entry Level Program provides assistance for first-time homebuyers. Specifically, as the program’s website states, HELP is intended for those who wish to“are unable to obtain mortgage financing or are unsure of their abilities as homeowners” but would still like to assume the responsibilities of owning a home.

Participants in the program initially lease affordable housing units from the Northwest Territories Housing Corporation (NWTHC)’s Public Housing Program and can subsequently purchase them within two to four years. Tenants who choose to purchase their units with two years are provided with a $20,000 incentive and a $10,000 incentive if purchased between two and four years. Increased rents are applied if the tenant opts to continue leasing the unit.

3.13. Closing costs and rebates in the Yukon

Closing costs in the Yukon include:

Land transfer fee: This fee is required for all home purchases in the Yukon, and the amount you pay is based on the value of your property. The table below outlines the fees and the data is consistent with information from the provincial government’s website.

Mortgage registration fee: As per the Yukon Land Titles Office, when you obtain a mortgage, you must register it. The registration fee differs based on the value of the mortgage. The table below outlines the fees and the data is consistent with information from the provincial government’s website.

Lawyer / legal fees: Having proper legal representation is a must for real estate transactions. A real estate lawyer acts as your advocate before, during and after the closure of the deal and also processes key legal documents. Costs for legal services vary and include an hourly fee for the lawyer along with disbursement costs.

Home insurance: When you apply for a mortgage, lenders will often ask to see your home insurance policy. As a result, it is important to have one in place when the deal closes. Your home insurance policy covers the replacement cost of your home should a disaster ever occur. Costs vary depending on the provider, current rates and your policy itself.

Home inspection: A complete home inspection ensures that your property is structurally sound while identifying areas that may require repairs or improvement. Your lender will request a copy of the inspection report as part of your mortgage application, and the cost varies from one home inspection company to the next.

Down Payment Assistance Program: The Down Payment Assistance Program is a government-funded program that seeks to provide first-time homeowners with a loan of up to 5% to assist with a down payment on a new home. In order to qualify for the program, all applicants must:

• Be first-time homeowners
• Use the home as their primary residence
• Be eligible for mortgage financing from a lending institution but have been unable to submit a sufficient down payment
• Be able to save enough money to cover 2.5% of a down payment
• Not have a total household income that is higher than Statistics Canada’s median income threshold
• Purchase a property that aligns with the program’s modest design guidelines

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Please note that the figures and details included in this article are current as of August 2019. While we endeavour to keep our information as current as possible, please consult the sources provided in each section in order to receive the most up-to-date information relating to closing costs in Canada.