Let’s break down the approximate costs associated with purchasing & owning a $1,000,000 property in BC.
One Time Purchase Expenses
- Property Transfer Tax: $18,000
- Listing Brokerage: $20,000 (including Taxes, Board Fee, Office Fee, Realtor Fee, Marketing, etc…)
- Buyer Brokerage: $14,000 (including Taxes, Board Fee, Office Fee, Realtor Fee, etc…)
- Lawyer Fee: $1,500 - $2,000
- Inspection: $500 - $1,000
- Appraisal: $500 - $1,000
- Miscellaneous Costs: Feasibility Study, Environmental, Renovation, etc…
- GST: if applicable (5% with some exemptions)
Total Approximate Purchase Expenses: $54,500 - $56,000
- Mortgage: $800,000 (other costs include Mortgage Insurance, Broker Fees, Interest, etc…)
Annual Expenses
- Home Insurance: $2,000 - $3,000
- Property Tax: $5,000 - $10,000 (City Tax: funds, Schools,City infrastructure, etc…)
- Tax Filings: $1,000 - $3,000 (Federal Taxes)
- City Utilities: $1,000 - $2,000 (City Tax: Sewer, Garbage, etc…)
- Hydro & Gas: $1,000 - $2,000 (Electricity and Gas)
- Repairs & Maintenance: $1,000 - $2,000
Total Approximate Annual Expenses: $11,000 - $22,000
- Mortgage: $4,500 monthly (including mortgage insurance, interest, Mortgage Broker Fees roughly 1% of total mortgage, Bank Fees, etc…)
If you have further details around each fee or expense please reach out and we will adjust accordingly.
The Government is directly related to the purchase expenses of around $18,000 and the annual expenses of $7,000 - $15,000, which is basically half of all expenses that a homeowner would face. A homeowner has to file 3 different taxes on the same property, paying accounting fees for each filing, why is this not done on one filing? Property Taxes help cities run, not much can be done there except for penalizing cities that abuse the budget (ex: Surrey and the policing fiasco). The Property Transfer Tax is just a Provincial Cash grab, there is no other explanation to it.
The cart that most politicians attach themselves to when trying to get elected is that of home affordability, they all say that they will fix it and correct it. In most cases they actually end up making it worse. The cost of owning and maintaining a property in British Columbia and Canada is high and most of this is induced by a lack of Government common sense.
Governments are short sighted with their approach to the housing issues, it comes down to a few simple things, some they can control and some they can’t. Supply and Demand, they can’t control it but they can build policy around it, like mandating density in the correct areas like around Transit, Commercial Hubs, etc…
Government red tape, they need to remove all the nonsense and delays around repetitive issues such as CRA Tax Filings (should be one Tax Filing per property that addresses all the taxes new and old), Development and Building applications (create a standard deadline all the cities need to meet for Single Family, Multi-Family, Medium Density, High Density), etc…
Most Governments come into power and throw a tax at the issue in the headlines during that period, the tax never solves anything aka Foreign Buyer Tax, BC Home Flipping Tax, Speculation and Vacancy Tax, Underused Housing Tax (list of most current taxes). Governments just need to do better, it’s as simple as that. It starts Federally and works its way down to the province and the cities. They need to create the appropriate lanes each level needs to address and stop putting up roadblocks.