Becoming a homeowner is an exciting milestone, but it’s crucial to enter this new chapter with eyes wide open. Beyond the down payment and monthly mortgage payment, there are several less obvious costs that can catch buyers off guard.
In this blog post, we will uncover the hidden costs of home ownership so that you can be as prepared as possible.
Property transfer taxes: the sneaky surprise
When purchasing a home in BC, one often overlooked cost is the property transfer tax. This one-time tax is calculated based on the fair market value or purchase price of the home. As a first-time homebuyer, you may be eligible for a full exemption if the purchase price is less than $500,000 and a partial exemption up to $525,000. This could result in savings of up to $8,000 on your first home. The property transfer tax is not something that can be financed, and the buyer would need to have these funds in addition to their down payment. Be sure to calculate your potential property transfer tax costs when budgeting for your new home purchase.
Home inspection: assessing the hidden details
To ensure your investment is sound, a professional home inspection is essential. While not mandatory, they can save you from unexpected repair costs down the road. A home inspection typically ranges from $300 to $800, depending on the size and location of the property. An inspection of a condo would be cheaper than a detached house since there is generally less square footage and fewer items to inspect. Although this may seem like an added expense, a home inspection can provide peace of mind and protect you from potential hidden issues.
Property insurance: protecting your castle
Homeowners insurance is a necessity to safeguard your investment and personal belongings. Insurance premiums can vary based on factors such as location, property value, and the level of coverage. It’s recommended to obtain multiple quotes to ensure you find the best policy for your needs. Consider additional coverage for risks specific to your region, such as floods or earthquakes, as they may not be included in standard policies.
Maintenace and repairs: the ongoing financial obligation
As a homeowner, you are responsible for the maintenance and repairs of your property. Budgeting for regular upkeep is crucial to avoid unexpected expenses. It’s often easiest to make regular contributions to a separate savings account to plan ahead for these costs. By doing this you can ensure you have the funds available to keep your property in tip-top shape.
Condo and strata fees: community living costs
If you’re considering a condo or strata property, additional fees come into play. Condo fees cover shared expenses, such as building maintenance, amenities, and communal services. These fees vary widely, depending on the size of the complex and the services provided. Oftentimes these fees can include items like garbage pick-up, landscaping and more. Read the properties strata minutes to find out what’s included.
Utilities and property taxes: monthly necessities
Beyond the mortgage payment, utilities and property taxes are ongoing expenses. In BC, property taxes are determined by local municipalities and are based on the assessed value of your property. Utility costs, including hydro, water, and gas, can fluctuate throughout the year based on usage. Researching average utility costs in your area will help you estimate these ongoing expenses and incorporate them into your monthly budget.
The Vancity team is here for you.
By understanding the financial realities that await, you can approach homeownership with confidence and preparedness. Remember to account for all these various expenses when calculating the true cost of owning a home. For personalized advice that aligns with your financial goals, book an appointment with a Vancity Mortgage Specialist. Our dedicated team is committed to supporting you, making sense of these changes, and guiding you towards a confident financial future
With careful planning and budgeting, you’ll be well-equipped to navigate the exciting journey of homeownership!