Buying a home comes with other costs than just the property itself. Along with your deposit and downpayment, there are several closing and accessory costs to be aware of, which can add up if not factored into your financial planning.

In this blog, we’ll go over some of the main costs that come with buying a home in Calgary.

What’s Unique About Buying Costs in Calgary?

No matter where you’re looking to buy a home, there will be some extra expenses involved. That said, some of the add-on costs of buying real estate in other Canadian cities and provinces don’t apply in Calgary.

The two biggest examples of this are speculation tax and land transfer tax. These two levies can significantly increase the cost of purchasing real estate in other provinces, particularly British Columbia and Ontario. However, the lack of these taxes in Alberta makes Calgary a more affordable city for homebuyers, especially those entering the market for the first time.

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What Closing Costs Should Buyers Prepare For?

While you won’t be on the hook for land transfer or speculation taxes as a Calgary homebuyer, there are still a handful of other costs to be prepared for.

Real Estate Legal Fees

Once your offer is accepted, you’ll work closely with a real estate lawyer during the closing process. Your lawyer’s responsibilities include reviewing the purchase agreement, ensuring the title is clear of liens or other legal claims, and facilitating the transfer of funds. Every purchase is unique, however, legal fees in Calgary typically range from $1,000 to $2,500, depending on the complexity of the transaction.

To protect your interests, it is critical to choose a lawyer who specializes in real estate to ensure all documents are prepared and signed correctly. Your real estate agent can recommend an attorney if you don’t already have a person in mind.

Home Inspection

Although it’s not technically mandatory, a home inspection is highly recommended for any real estate purchase. Even if a home looks great on the surface, there could always be hidden issues you don’t know about. With that in mind, a professional home inspection can identify all kinds of potential issues such as structural problems, mould, faulty wiring, or bad plumbing.

In today’s market, the average cost of a home inspection in Calgary runs between $400 and $700, depending on the size and type of home. While this isn’t a small cost, having an inspection done before closing can save you thousands in future repairs and give you peace of mind about your investment.

Land Title Transfer

Alberta may not have a land transfer tax, however, you will have to pay a one-time title transfer and registration fee. Luckily, this cost is typically much lower than average transfer taxes in other provinces.

Title transfer fees are broken down by cost. As the buyer, you’ll pay a $50 base fee, plus $2 for every $5000 of property value. For example, if you bought a home for $1,000,000, your costs would be $450.

Title Insurance

Title insurance is another essential component of the closing process. It protects the buyer from potential issues with the title, such as fraud, forgery, or disputes over property boundaries. While title insurance is not legally required in Alberta, it is highly recommended, and many lenders will insist on it. The cost of title insurance can range from $250 to $500, depending on the value of the home and the insurance provider.

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Costs Outside of Closing

As a buyer, it’s extremely important to leave room in your budget for closing costs. With that in mind, there are a few other indirect expenses that are usually involved in a home purchase that you’ll also want to be prepared for.

Moving Costs

After you buy a home, the process of moving in comes with its own set of expenses. Whether you hire professional movers or rent a moving truck and do it yourself, you can expect anywhere from a couple hundred to a couple thousand dollars in moving costs.

Proper budgeting for moving expenses is even more important if you’re moving to Calgary from outside of the city, province, or country. Relocation costs can add up quickly and eat away at your overall budget.

That said, if you’re moving to Calgary as part of a corporate or work-related move, you could be eligible for certain rebates or other benefits. Be sure to ask your employer about potential reimbursements for any expenses you accrue during the relocation process.

Insurance

Mortgage Insurance

If you are purchasing a home with a down payment of less than 20%, you will need to buy mortgage insurance, often referred to as CMHC insurance (from the Canada Mortgage and Housing Corporation). The cost of this insurance is added to your mortgage payments and varies depending on the size of your down payment and the value of the home. It’s important to factor this additional cost into your monthly housing budget.

Homeowner’s Insurance

As a homeowner, you’ll need property insurance, which protects your home and belongings in case of fire, theft, or other damage. Property insurance is a necessary monthly expense, and its cost depends on the size, location, and age of the home, as well as the level of coverage you choose.

On average, property insurance in Calgary typically ranges from $800 to $1,500 per year. If you’re unsure how much money to set aside, ask your real estate agent. They can help you estimate insurance expenses based on a particular home you may be interested in.

If you’re looking for an expert to guide you through the process of buying a home in Calgary, look no further than our dedicated team of Realtors. Call 403.999.5882 to get in touch or send us an email at info@dolcerealestate.com.

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