When you buy a home, the purchase price is not the only number that matters. Closing costs are the fees and expenses due on or before possession day. The great news for Alberta buyers is that we have no provincial land transfer tax, which can save buyers thousands compared with provinces like Ontario and B.C. Still, there are costs to plan for.
Land title transfer fee
Alberta charges a government fee to register the transfer of land into your name. The formula is a flat $50 plus $5 for every $5,000 of property value. On a $500,000 home, that works out to roughly $550.
Mortgage registration fee
Registering your mortgage is calculated the same way: $50 plus $5 for every $5,000 of the mortgage amount. On a $400,000 mortgage, expect about $450.
Legal fees and disbursements
A real estate lawyer handles the title transfer, mortgage documents and the transfer of funds. Legal fees in Calgary commonly range from about $1,000 to $2,000 including disbursements, depending on the property and the complexity of the deal.
Home inspection
A professional home inspection usually costs a few hundred dollars and is one of the best investments you can make in the buying process.
Mortgage default insurance and PST
If you put down less than 20%, a mortgage insurance premium applies. It is usually added to your mortgage. Unlike Ontario, Quebec and Saskatchewan, Alberta does not charge provincial sales tax on that premium.
Other costs to budget for
- Property tax adjustments: if the seller prepaid taxes, you will reimburse your share.
- Title insurance: often required by lenders, typically a few hundred dollars.
- Condo document review: for condo purchases, a professional review of bylaws, financials and the reserve fund study.
- Home insurance: your lender will require proof of coverage before closing.
- GST on new homes: new construction may include GST; ask whether it is included in the price and whether you qualify for a rebate.
- Moving and utility hook-ups.
How much should you set aside?
A good rule of thumb is to budget about 1.5% of the purchase price for closing costs in Alberta. Lenders will also want to see that you have these funds available on top of your down payment.
Want a personalized estimate for a home you are considering? Contact Apollo Realty Advisors and we will walk you through every number.
