March 10, 2020

Expenses to Consider When Buying a Property

Have you decided to become a homeowner? Learn more about the costs that are involved.

The down payment

A down payment is mandatory when buying a property. The minimum required is 5%; however, homebuyers with less than 20% down payment are required to purchase mortgage loan insurance to protect the financial institution. Thus, you should ideally have a 20% down payment to be exempt from mortgage loan insurance.

Mortgage loan insurance

The cost of mortgage insurance varies based on several criteria, such as your financial and professional situation, your credit history and your down payment. The larger the down payment, the less expensive the insurance will be. To learn more about mortgage loan insurance, visit the CMHC website.

The inspection

To avoid unpleasant surprises, an inspection is strongly recommended. A building inspector will be able to identify the strengths and weaknesses of the property and, above all, identify potential repairs and the expected costs.

The cost of an inspection varies, but expect to pay at least $500.

The notary

It is mandatory that you use the services of a notary during a real estate transaction. The notary accompanies you during the purchase process and ensures that your property titles are free of any irregularities.

The notary prepares documents such as the deed of sale, the mortgage deed, as well as the registration of the property in the Quebec Land Registry.

The cost of a notary is approximately $1,000 but can vary depending on the city and the type of property.

Transfer duties

Transfer duties (sometimes called the “welcome tax”) are collected by the municipality of your new property. They are payable at the conclusion of the transaction at the notary's office.These duties are calculated according to different criteria. Use our simulation calculator to find out the amount of transfer taxes.

Municipal and school taxes

When you become a homeowner, you must pay your share of municipal and school taxes. Taxes are calculated based on the municipality, the school board and the value of the property.

Moving and related expenses

It is essential that you take moving costs into account, whether you hire professionals or a few of your friends.

Count on spending a minimum of $500 for a moving company and around $250 for a truck rental, or even more if it's July 1st!

Finally, set aside a small additional amount for the purchase of furniture and decorative items to decorate your new home.

See also:

Notary fees for buying a home

How to calculate the welcome tax

Everything You Need to Know About the Mortgage Stress Test

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