When you’re hunting for the perfect place to call home, it’s easy to only concentrate on the list price of the houses you’re considering because there are so many other exciting aspects on your mind – like how you’ll arrange your furniture, or which bedroom will be for which family member. But it’s important to understand ahead of time that there are additional expenses to consider aside from just the purchase price of your dream property. Knowing the additional expenses involved in an Okanagan Valley real estate transaction can make all the difference of whether you’re able to afford a particular property or not.
For example, one of the biggest expenses you may not be aware of is that when you purchase real estate in Kelowna (and anywhere in British Columbia, for that matter), we have a provincial Property Transfer Tax, known as PTT. So when you purchase - or gain an interest - in property that’s registered at the Land Title Office, like most residential homes are, your real estate lawyer will need to file a property transfer tax return and you must pay PPT (unless you qualify for an exemption).
While in most cases, these transfers are taken care of by a trained legal professional who knows what they’re doing, it still helps for you to understand how PTT is calculated when you invest in a home, so you can anticipate the costs. Here’s an overview of the tax rates charged, based on the value of the home.
· 1% of the fair market value up to and including $200,000
· 2% of the fair market value greater than $200,000 and up to and including $2,000,000
· 3% of the fair market value greater than $2,000,000
As well, if the residential property is worth over three million dollars, a further 2% tax will be applied to the value that’s greater than $3,000,000.
In addition to PPT, there are many other expenses to take note of, such as:
· the accepted offer deposit amount
· a home inspection
· legal fees
· homeowner’s insurance
· moving costs
· and utility service charges – just to name a few!
But don’t let this overwhelm you; I’m here to help you through the home buyer process, so it can be the best experience possible for you. Call me at 250.718.7851 and let’s begin the first step to finding your dream home together.