Presale Condo Closing Costs: What to Budget for Completion?
So, you finally committed to that comfy presale condo that you want to buy and are working with a mortgage specialist to assess your budget. That’s an awesome start! But there are many other costs associated with buying a presale condo that are not apparent at first.
Closing costs are fees, costs and disbursements that are paid at the completion when buying a presale condo.
Rather than getting an unpleasant surprise with steep closing costs while signing the final documents, it is wise to know exactly what these costs are and how to budget them in.
Following are a few important closing costs to keep in mind when buying a presale condo with ipresalecondos.com
Cost #1: Property Transfer Tax:
This is a one time tax payment to the ministry of finance for the change in the ownership of the property. This can be a big cost for first time buyers and should be budgeted accordingly.
Here in BC, property transfer tax is calculated as follows:
- 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 $3,000,000
One good thing about this is that there are various exemptions on property transfer tax available for first-time home buyers and an experienced team like ipresalecondos.com can help you calculate your exact property transfer tax.
Cost #2: Goods & Services Tax:
This closing cost is the most relevant to presale condo projects. This is paid directly to the builder/developer and is calculated based on 5% of the agreed purchase price.
Make sure to budget this 5% in, while committing to a presale condo project.
Cost #3: Legal Fees:
Legal fees are the fees you pay to your lawyer or notary to act on your behalf when signing a presale condo contract. These fees can vary considerably based on the types of services offered by your lawyer/notary as well as any overhead charges incurred by them.
These fees can range anywhere from $1,000 to $1,500. But make sure to check with your lawyer if these fees include disbursements like land title search and registering titles.
At ipresalecondos.com we offer in-house legal services with experienced lawyers and notaries that go over your contract with painstaking detail. Another reason to buy your next presale condo with ipresalecondos.com!
Cost #4: Inspection Fees:
It is good practice to never buy something that’s not been inspected by a professional. This is why inspection fees are so important and the cost of inspecting a condo can range between $300 to $450.
Cost #5: Utility Hook Ups:
Purchasing a brand new condo also means that most of the utilities have to be connected to your new home for the first time. There’s usually a cost associated with starting your gas, water and hydro connections.
These can be charged individually for each connection, or sometimes the developer may charge you a single fee for all connections combined.
On average, you should set aside $500-$1500 for Utility hook ups.
Cost #6: Development Charges:
Another big expense when buying a presale condo is development charges or also known as development levies.
The purpose of these charges are to aid the government institutions to develop and improve the area.
Some of the levies included in these charges are as follows:
- Education Levies:
Dedicated to building new local schools in the area - Public Arts Levies:
Dedicated to creating new public art displays in the area - Park Levies:
Dedicated to building new local parks in the area
Final Words
Closing costs may seem too daunting if this is your first time venturing into the presale condo market, but that is exactly what we are here for.
Ipresalecondos.com has a team of experienced realtors, lawyers, notaries and even in-house property managers that help guide you through the whole process.
Please call or text at 604-825-8881 or email at info@ipresalecondos.com to know more about closing costs and how to try to minimize them when buying your next presale condo.
