When buying a home in British Columbia, it’s easy to focus solely on the purchase price, but there are several hidden costs that can catch buyers off guard. Understanding these costs can help you plan better and avoid surprises.

1. Property Transfer Tax (PTT)
One of the biggest hidden costs, especially in BC, is the Property Transfer Tax. It’s 1% on the first $200,000 and 2% on the value between $200,000 and $2 million. If your home exceeds $2 million, the tax increases even more. However, first-time buyers may be eligible for exemptions, and other certain exceptions may apply such as on newly built homes under $1,100,000 and on WFN/ First Nations land. Check out our Property Transfer Tax Calculator to get an estimate on this! 

2. Legal Fees
Closing a real estate transaction requires the services of a lawyer or notary. Legal fees typically range from $1,500 to $2,500, depending on the complexity of the transaction. They handle essential tasks like title transfers, mortgage paperwork, and ensuring the deal is legally binding.

3. Home Inspection and Appraisal
A thorough home inspection can reveal hidden issues, but it comes at a cost—usually between $400 and $600, but this can vary pretty widely. Appraisals, often required by lenders, can add another $300 to $500 to your bill. These upfront costs are crucial to ensuring the home’s condition and value in order to protect your investment. On top of this, if you are buying a condo or buying a townhouse in Kelowna, you may want to consider a professional strata review, these can range between $400-$500. 

4. Insurance
Beyond basic homeowner’s insurance, you may need mortgage loan insurance if your down payment is less than 20%. This can add thousands of dollars over the life of your mortgage, and is often required for CMHC-insured loans, though this can be financed into your mortgage. Getting connected with some of the best mortgage brokers in Kelowna can help you plan for this.

5. Moving Expenses
Don’t forget the cost of physically moving into your new home. Whether you hire a moving company or rent a truck, these costs can add up, especially if you're relocating across towns or regions. 

6. GST
Another one biggest hidden costs, especially If you are buying a newly built home is GST. This is valued at 5% of the purchase price. While some exemptions are available for newly built homes under specific parameters, be sure to pay attention as if you are buying a previously owned home that was used as an Airbnb, or the owner deferred the GST this may be applicable again.

Buying a home is a major investment, and knowing these hidden costs can help you budget more effectively to have a low stress experience. Whether you’re a first-time buyer or seasoned homeowner, let our team guide you through the process so you’re fully prepared. Give our team of dedicated Kelowna realtors a call to create a personalized plan for you and your family!