The Number Nobody Budgets For
Almost every client focuses on the down payment and forgets the second number: closing costs typically run 1.5% to 4% of the purchase price on top of it. On a $900,000 home, that's realistically $13,500 to $36,000 in cash you need available beyond your down payment: money that can't come from the mortgage itself. I'd rather you see this number in week one of your search than discover it the week before you close.
Property Transfer Tax: The Biggest Line Item
This is almost always the largest single closing cost. BC's property transfer tax runs 1% on the first $200,000 of the purchase price, 2% on the portion between $200,000 and $2 million, and 3% above that. Eligible first-time buyers can get a full exemption on homes up to $500,00, with a partial exemption up to $835,000.
Legal Fees, Inspection, Appraisal & Title Insurance
Beyond the PTT, expect legal fees in the $1,200 to $1,800 range, running slightly higher for a strata purchase because of the extra document review involved. A home inspection, not legally required, but one I'd never let a client skip, runs $400 to $700 depending on the home's size and age. Your lender will usually require an appraisal at $300 to $500, and title insurance typically adds another $250 to $450. None of these are individually large, but they add up to a real number you should have set aside before your offer is even accepted, not scrambled together during your subject removal period.
The Property Tax Adjustment Nobody Explains Until Closing Day
This is the closing cost that catches people off guard because it isn't a fee, it's a reimbursement. If the seller has already paid property taxes for the year past your closing date, you owe them back the prorated, unused portion at closing. Depending on the time of year you close and the home's tax bill, that adjustment can run anywhere from $500 to $3,000 or more: it's not a cost you're paying to anyone new, but it is real cash due at closing, and it's easy to forget when you're totaling up your budget.
Your Ongoing Property Tax Bill
Once you own, Victoria's residential property tax rate sits around 0.44% to 0.48%, genuinely one of the lower rates in the country, though on Victoria's home values that still adds up to a meaningful annual bill. The provincial Homeowner Grant helps offset it: up to $570 for the basic grant in the Capital Regional District, and up to $845 if you qualify as a senior, veteran, or person with a disability, on properties assessed below the current $2.075 million threshold. It's worth applying every year rather than assuming your bank or the city does it automatically: in most cases, you have to submit it yourself.
A Realistic Closing Cost Budget by Purchase Price
As a rough guide: on a $600,000 condo, plan for roughly $10,000 to $16,000 in total closing costs, PTT included. On a $900,000 detached home, plan for $14,000 to $30,000. On a $1.3 million home at the current benchmark, plan for $22,000 to $45,000-plus, especially if you're not a first-time buyer and paying the full property transfer tax. These are planning ranges, not guarantees. I'd rather run your specific numbers with you and your lawyer once you have a target price range, so there's no surprise on closing day.
The Costs Beyond Closing Day
A few more that don't show up on the lawyer's statement but hit your bank account in the same general window: the actual moving costs, which run anywhere from a few hundred dollars for a DIY move to several thousand for a full-service long-distance move; utility hookups and deposits for BC Hydro and internet; and, if you're buying a condo or townhome, the strata's move-in fee, which some buildings charge on both the way in and the way out. If you're buying a strata property specifically, budget time as well as money: reviewing the strata's meeting minutes, depreciation report, and contingency reserve fund is worth doing before you remove subjects, not after you own a special assessment you didn't know was coming.
Who This Fits
You've budgeted your down payment but haven't set aside a separate 1.5% to 4% for closing costs
You're a first-time buyer and want the property transfer tax exemption mechanics explained clearly (see the Week 3 post)
You're a repeat buyer who needs to budget the full PTT with no exemption available
You want to understand the Homeowner Grant and make sure you're actually applying for it each year
Closing costs are one of the few parts of buying a home that are almost entirely predictable: there's no reason to be surprised by them if you plan early. I'd rather walk through your specific purchase price and buyer status now and give you real numbers than have you discover the gap between your down payment and your actual cash-needed-to-close a week before your subject removal.
More soon.
Ainsley
