One of the most common surprises first-time buyers encounter is the gap between the purchase price and the actual total cost of buying. It's not just the down payment and mortgage—there are closing costs. Let me break down exactly what you should budget for when buying a home in Victoria.
Legal and Conveyancing Fees
You'll need a lawyer to handle the legal transfer of the property. In Victoria, real estate lawyer fees typically range from $800–$1,500, depending on the complexity of the transaction and the lawyer's location. This covers title search, document preparation, and closing coordination. Don't skip this or try to DIY—legal representation is crucial to protecting your interests. Your lawyer will identify any title issues, ensure the property is free of liens, and make sure the purchase agreement protects you.
Property Transfer Tax (PTT)
This is a big one. In BC, you pay Property Transfer Tax on the purchase price of a residential property. The rate is tiered: 1% on the first $200K, 2% on the next $200K, and 3% on anything above $400K. So on a $1M home, you're looking at roughly $16,000 in PTT. However, there are exemptions and deferral programs available, particularly for first-time buyers. Make sure your lawyer and real estate agent explore whether you qualify for the first-time buyer exemption, which can be substantial.
Home Inspection and Appraisal
A professional home inspection typically costs $400–$600 in the Victoria area. It's money well spent—it reveals structural issues, mechanical problems, and safety concerns before you close. An appraisal, required by your lender, costs $300–$500. These are not negotiable if you're financing the purchase. Some buyers try to save money here, but it's penny-wise, pound-foolish. A $500 inspection can save you from a $20,000 foundation problem.
Title Insurance and Survey
Title insurance protects you against legal challenges to your ownership and typically costs $150–$300. It's usually a one-time cost. A survey might be required by your lender, especially if the property has unusual features or boundary questions. Surveys cost $300–$800+, depending on the property size and complexity. Not all properties require a survey, but it's good to confirm with your lender early.
Property Tax, Utility, and Strata Adjustments
At closing, property taxes and utilities are prorated between buyer and seller. If the seller has prepaid property taxes for the full year but you're taking possession partway through, you'll reimburse them for the unused portion. Similarly, utilities might be adjusted. These aren't fixed costs—they depend on your exact closing date and the property's tax and utility situation. Budget $300–$1,000 depending on the property and closing date.
Inspection Requests and Repairs
During the inspection period, you might request that the seller repair items before closing. If they don't, you have options: close anyway, renegotiate price, or walk away. If you negotiate repairs as a credit (the seller gives you money to do repairs yourself), that money comes out of the seller's proceeds, reducing your down payment requirement. Some buyers budget $1,000–$5,000 for post-closing repairs that weren't addressed pre-closing.
Mortgage Insurance (If Applicable)
If you're putting down less than 20%, you'll need mortgage default insurance. For a $1M purchase with a 15% down payment, mortgage insurance could be $30K–$40K, typically added to your mortgage. This isn't a closing cost per se, but it's an out-of-pocket expense you need to plan for. Your lender will calculate this upfront.
Total Budget Estimate
Here's a rough total for a $1M home purchase with standard financing: Legal fees ($1,000), Property Transfer Tax ($16,000), Home inspection ($500), Appraisal ($400), Title insurance ($250), Strata/property tax adjustment ($500), and miscellaneous ($500–$1,000). You're looking at roughly $19,000–$20,000 in closing costs, plus mortgage default insurance if applicable. This is typically 2–2.5% of the purchase price. Some of these costs can be negotiated or the seller can contribute, but budget conservatively so you're not caught off guard.
I'm Dan Juricic, a REALTOR® with RE/MAX Camosun. If you have questions about the Victoria market, I'd love to help. Call or text me at [phone] or visit danjuricic.com.