Value-First Home Team · British Columbia
Understanding Closing Costs in BC
A complete breakdown of every cost that comes due between your accepted offer and your possession date — including what's mandatory, what's optional, and what most buyers underestimate.
Legal Disclaimer: This guide is provided for general informational purposes only and does not constitute legal, financial, or tax advice. Always confirm requirements, eligibility, and costs with qualified professionals before making decisions.
Agency Disclaimer: Nothing in this guide creates an agency relationship or representation agreement. Agency is only established through a signed written agreement in accordance with BC real estate regulations.
Overview
What Closing Costs Actually Are
Closing costs are all the expenses that come due between your accepted offer and completion day — separate from your down payment. They don't go into the property. They don't build equity. They're just the cost of completing the transaction, and they add up faster than most buyers expect.
In most of Canada, the common advice is to budget 1.5–2% of the purchase price for closing costs. In BC — and especially in Greater Vancouver — that's not enough. Property Transfer Tax alone can push you well past 2%, before you've paid a notary, bought title insurance, or moved a single box.
The costs split into three categories: mandatory (you'll pay these on every purchase), conditional (required in certain situations), and discretionary (recommended but technically optional).
Closing costs are due on or before completion day — not added to your mortgage. They need to be liquid cash available in your bank account. Budget for them before you submit an offer, not after.
The Big One
Property Transfer Tax (PTT)
Property Transfer Tax is a provincial tax paid by the buyer every time a property changes ownership in BC. For most buyers in Greater Vancouver, it's the single largest closing cost — often larger than all other closing costs combined.
PTT is calculated on the fair market value of the property at the time of transfer — which in most transactions is the agreed purchase price.
2025 PTT Rates
| Portion of Purchase Price | Rate | Tax on That Portion |
|---|---|---|
| First $200,000 | 1% | $2,000 |
| $200,001 – $2,000,000 | 2% | Up to $36,000 |
| $2,000,001 – $3,000,000 | 3% | Up to $30,000 |
| Over $3,000,000 (residential) | 5% | 2% additional surcharge on portion over $3M |
What PTT Looks Like at Common Price Points
$700,000
$12,000
1% on first $200K + 2% on remaining $500K
$900,000
$16,000
1% on first $200K + 2% on remaining $700K
$1,100,000
$20,000
1% on first $200K + 2% on remaining $900K
$1,300,000
$24,000
1% on first $200K + 2% on remaining $1.1M
$1,600,000
$30,000
1% on first $200K + 2% on remaining $1.4M
$2,200,000
$44,000
1% + 2% + 3% tiers applied progressively
PTT is paid on completion day in cash — it cannot be added to your mortgage. On a $1,000,000 purchase, that's $18,000 out of pocket on closing day, on top of your down payment. This surprises many buyers who didn't budget for it separately.
PTT Exemptions
Who Can Avoid Paying PTT
There are two major PTT exemptions that apply to residential buyers. Both were significantly expanded in 2024, raising the eligible price thresholds. If you qualify, the savings are substantial.
First-Time Home Buyer Exemption
Full Exemption
Up to $835,000
Partial Exemption
$835,001 – $860,000 (phases out)
Max Savings
Up to $8,000
Who Qualifies
Canadian citizen or PR · Never owned a principal residence anywhere in the world · BC resident for 12+ consecutive months immediately before purchase (or filed 2 BC income tax returns in last 6 years)
Conditions
Must move in within 92 days · Must occupy as principal residence for at least 1 year · Property must be on land ≤ 0.5 hectares
Important
The exemption applies to the first $500,000 only. PTT is still payable on the portion from $500,001 to $835,000.
Newly Built Home Exemption
Full Exemption
Up to $1,100,000
Partial Exemption
$1,100,001 – $1,150,000 (phases out)
Max Savings
Up to $20,000
Who Qualifies
Canadian citizen or PR · Purchasing a newly built home, new condo unit, or manufactured home on vacant land · Does not need to be a first-time buyer
Conditions
Must move in within 92 days · Must occupy as principal residence for at least 1 year · Land must be ≤ 0.5 hectares
Important
Available to repeat buyers — if you're buying new construction, this exemption applies even if you've owned before.
Your lawyer or notary applies the PTT exemption at the time of registration — you don't apply for it separately beforehand. However, you need to meet all conditions and you're legally responsible for the accuracy of the claim. False declarations result in penalties equal to the amount of the exemption.
Foreign Buyer Exemption Note
BC's foreign buyer ban (20% additional PTT in specified regions including Metro Vancouver) has been extended to January 1, 2027. Foreign nationals and non-PR residents are not eligible for standard PTT exemptions and face significant additional costs.
Family Transfer Exemptions
Transfers of a principal residence between related individuals (parent to child, between spouses, etc.) may be exempt from PTT if the property was the transferor's principal residence for at least 6 months before the transfer and other conditions are met.
High-Ratio Mortgages
CMHC Mortgage Default Insurance
If your down payment is less than 20% of the purchase price, mortgage default insurance is mandatory under federal law. It's commonly called "CMHC insurance" after the Crown corporation that administers it, though private insurers Sagen and Canada Guaranty offer it at the same rates.
The insurance protects the lender — not you — in the event you default on your mortgage. But you pay for it.
Added to Your Mortgage — Not Cash on Closing
Unlike PTT, CMHC insurance is not paid in cash on closing day. The premium is added to your mortgage balance and paid off over your amortization period through your regular monthly payments. It increases your total borrowing and the interest you pay over the life of the mortgage.
Maximum Purchase Price for Insured Mortgages
CMHC insurance is only available on homes purchased for $1,499,999 or less. If the purchase price is $1.5 million or more, a minimum 20% down payment is required and mortgage default insurance is not available regardless of circumstances.
2025 CMHC Premium Rates
| Down Payment | Loan-to-Value Ratio | Premium Rate | Premium on $700K Mortgage | Premium on $900K Mortgage |
|---|---|---|---|---|
| 5% | 95% | 4.00% | $28,000 | $36,000 |
| 10% | 90% | 3.10% | $21,700 | $27,900 |
| 15% | 85% | 2.80% | $19,600 | $25,200 |
| 20%+ | 80% or less | None | $0 | $0 |
30-year amortization note: As of December 15, 2024, first-time buyers and buyers of newly constructed homes can access 30-year amortization on insured mortgages. However, choosing 30 years adds 0.20% to your CMHC premium rate (e.g., 5% down becomes 4.20% instead of 4.00%). The lower monthly payment comes at the cost of a higher insurance premium and significantly more interest paid over the life of the loan.
Minimum Down Payment Rules
Homes Under $500,000
Minimum down payment is 5% of the full purchase price.
Homes $500,000 – $999,999
Minimum is 5% on the first $500,000, plus 10% on any amount above $500,000. On a $750,000 purchase: $25,000 + $25,000 = $50,000 minimum.
Homes $1,000,000 – $1,499,999
Minimum down payment is 20%. CMHC insurance is still available if down payment is between 20% and just under the threshold for uninsured mortgages.
Homes $1,500,000+
Minimum 20% down payment required. CMHC insurance is not available at this price point — the mortgage is uninsured regardless of down payment size.
Everything Else
All Other Closing Costs
Beyond PTT and CMHC, here's every other cost that typically comes up between accepted offer and possession. Some are mandatory, some are lender-required, and some are strongly recommended even when technically optional.
Legal / Notary Fees
A BC lawyer or notary public handles title transfer, mortgage registration, PTT filing, adjustments, and Land Title Office registration. Mandatory for every purchase. Fees vary based on complexity — strata purchases and purchases with unusual title issues cost more.
$1,200–$2,200
Mandatory
Title Insurance
A one-time policy that protects against title defects, fraud, survey issues, and certain encumbrances not found during the title search. Most lenders require it. Covers both the lender's interest and optionally your own as the owner. Strongly recommended even when not required.
$150–$350
Lender-required
Home Inspection
A professional inspection of the property's condition, systems, and structure. Paid directly to the inspector, typically during the subject period — not on completion day. Not legally mandatory but strongly recommended unless you're buying new construction with a warranty.
$500–$900
Highly recommended
Appraisal Fee
Your lender may require a professional appraisal to confirm the property is worth what you're paying. Required more often on high-ratio mortgages, unusual properties, or when the purchase price is aggressive relative to comparables. Paid directly or added to mortgage costs depending on lender.
$350–$600
Lender-dependent
Property Tax Adjustment
BC property taxes are billed annually, often prepaid by the seller. On completion, taxes are prorated to the exact completion date — if the seller has prepaid more than their share, you reimburse them for the remainder of the year. This adjustment can add $1,000–$3,000+ depending on the completion date and the property's assessed value.
$500–$3,500
Mandatory adjustment
Strata Fee Adjustment
For strata properties (condos, townhouses), strata fees are also prorated to the completion date. If the seller has prepaid the month's strata fees, you owe them the portion covering your ownership period. This is calculated and handled by your notary on closing.
$50–$500
Strata purchases only
Home Insurance (First Premium)
Your lender requires proof of home insurance before releasing mortgage funds. You'll need to arrange a policy effective from your completion date and provide a binder or certificate to both your lender and notary before closing. The first premium is typically due on or around completion day.
$1,200–$3,000/yr
Lender-required
Strata Document Review
If buying a strata property, you should have a professional review the strata documents — financial statements, depreciation report, meeting minutes, bylaws, and insurance certificate. Some buyers do this themselves; others hire a strata document review service. Skipping this review is one of the most common and costly mistakes in strata purchases.
$0–$300
Recommended
GST on New Construction
If you're purchasing a newly built home directly from a builder, GST at 5% applies to the purchase price. On a $900,000 new home, that's $45,000. A partial GST rebate is available for primary residences under $450,000, but phases out completely by $450,000 — meaning most Greater Vancouver new builds attract full GST with no rebate. This is separate from PTT.
5% of price
New builds only
Moving Costs
Professional movers, packing supplies, storage, cleaning services, and any overlap in housing costs between your old and new home. Consistently underestimated. Get quotes early — moving costs in the Lower Mainland are higher than most other Canadian markets and fluctuate significantly by season.
$1,500–$8,000
Varies widely
Real Numbers
Complete Closing Cost Examples
Here's what closing costs actually look like on a typical Greater Vancouver purchase. These are illustrative estimates — your actual costs will depend on the exact purchase price, down payment, property type, and specific circumstances.
Example A: $850,000 Resale Home — First-Time Buyer, 10% Down
| Cost Item | Amount | Notes |
|---|---|---|
| Property Transfer Tax | $15,000 | 1% on $200K + 2% on $650K |
| PTT First-Time Buyer Exemption | − $8,000 | Partial exemption (home over $835K threshold) |
| CMHC Insurance Premium | Added to mortgage | 3.10% × $765,000 = ~$23,700 — financed, not cash |
| Legal / Notary Fees | $1,600 | Estimate — confirm with your notary |
| Title Insurance | $250 | |
| Home Inspection | $600 | |
| Property Tax Adjustment | $1,500 | Estimate — depends on completion date |
| Home Insurance (first year) | $1,800 | Estimate — get actual quote |
| Moving Costs | $2,500 | Estimate |
| Total Cash Closing Costs | ~$14,750 | Plus $85,000 down payment = $99,750 total cash required |
Example B: $1,100,000 Resale Home — Repeat Buyer, 20% Down
| Cost Item | Amount | Notes |
|---|---|---|
| Property Transfer Tax | $20,000 | 1% on $200K + 2% on $900K — no exemption |
| CMHC Insurance Premium | None | 20%+ down payment = no insurance required |
| Legal / Notary Fees | $1,800 | Estimate |
| Title Insurance | $275 | |
| Home Inspection | $650 | |
| Property Tax Adjustment | $2,000 | Estimate — depends on completion date |
| Home Insurance (first year) | $2,200 | Estimate |
| Moving Costs | $3,500 | Estimate |
| Total Cash Closing Costs | ~$30,425 | Plus $220,000 down payment = $250,425 total cash required |
PTT accounts for nearly two-thirds of closing costs in Example B — and that's on a purchase that doesn't trigger the luxury rate. On a $1.5M home, PTT alone is $26,000. On a $2M home, it's $36,000. This is why Greater Vancouver buyers need to budget 3–5% for closing costs, not 1.5%.
Practical Steps
How to Budget for Closing Costs
Budget Before You Set Your Price Ceiling
Know your closing cost estimate before you decide your maximum offer price. On a $950,000 purchase with no PTT exemption, you need roughly $18,000 in PTT alone — in addition to your down payment. Many buyers find out too late that they're short.
Ask Your Notary for an Estimate Early
A good notary will give you a preliminary closing cost estimate as soon as you have an accepted offer. This is the most reliable number — they'll calculate the exact PTT, adjustments, and their own fees based on your specific transaction.
Check PTT Exemption Eligibility Before You Make an Offer
If you might qualify for a first-time buyer or newly built home exemption, confirm eligibility before you submit an offer. The exemption threshold matters — a purchase price of $836,000 vs. $834,000 can mean the difference between a full exemption and a partial one.
Keep Closing Costs Liquid
Closing costs cannot come from a line of credit or other borrowed source in most cases. They need to be cash in your bank account by completion day. Don't count on funds that haven't settled — your notary needs to be able to confirm funds are available before registration.
Factor in CMHC's Real Cost
CMHC insurance doesn't come out of pocket on closing day but it's not free — it adds thousands to your mortgage balance and increases the total interest you pay over the life of the mortgage. A buyer putting 5% down on a $750,000 home adds roughly $26,000 to their mortgage in insurance premiums alone.
New Builds: Get a GST Estimate
GST on new construction is one of the most commonly overlooked closing costs — and one of the largest. On a $900,000 new build, GST is $45,000. Confirm with the developer whether GST is included in the quoted price or is in addition to it — these are two very different numbers.
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