For most people, buying a home is most likely the biggest expense they will incur in their lifetime. But many aren’t aware of just how expensive it can be. For in addition to the actual market price of the house itself, there are a number of extra expenses that need to be taken into account. Not that these are avoidable in any way. On the contrary, they are essential expenses. But an awareness of them will help all new buyers in calculating the real cost of buying a home.
Having a solicitor to deal with the legal aspects of buying a house is a necessity. This process is commonly known as conveyancing. Generally, property conveyancers will either charge you a flat fee or instead, a percentage of the total value of the property. It’s nothing to worry about financially though. For these fees should never be in excess of $2500 and in most cases should be far less. Whilst it is theoretically possible to avoid these costs by performing the conveyancing yourself, it is strongly recommended that you use a professional service instead, unless of course you’re qualified to perform the task yourself.
Land Transfer Tax
Unless you live in Saskatchewan, Alberta or rural Nova Scotia, unfortunately you are obliged to pay Land Transfer Tax (also known as property purchase tax). Provinces tend to have fairly complicated and multi-tiered taxation systems, but luckily all of the relevant information is available to you through tax calculators. This free online service will help you to work out exactly how much you should expect to pay in terms of Land Transfer Tax.
House Survey Costs
Once your offer on a property has been accepted, your money lender will then carry out a survey to make sure that the property is in fact worth the money you are borrowing in order to pay for it. This is generally arranged on your behalf, but you’ll still need to cover the costs. This might only be about $200 on a property worth $160,000 but expect your lender to add another $150 or so in administrative fees. Again, these cost are unavoidable and are actually there to protect you as well as your lender.
Buying a house is expensive and the above costs do add to that. However the additional fees are by no means massive and in most cases, the services you receive from them are invaluable.