Key Closing Costs Every Buyer Should Consider
When purchasing a condo in Nova Scotia, it's crucial to account for closing costs. These expenses go beyond your down payment and are payable on the closing day. It's worth noting that in most real estate transactions, buyers provide a deposit during the conditional period to show their commitment to the purchase. This deposit is held in trust, and at closing, these funds are put towards your closing costs.
Below are the most common closing costs. This list is not exhaustive. It’s best to confirm with your lawyer during the conditional period the closing costs relevant to your transaction.
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When purchasing a condo, it's highly recommended to hire professional home inspector to inspect the condo. This allows you to identify any potential issues with the property before the conditions date. If deficiencies are found, your REALTOR® can negotiate on your behalf for a price reduction or request that the repairs be completed prior to closing. It also gives you the option to legally terminate the purchase if you're unsatisfied with the inspection results, potentially saving you significant expenses in the future.
The typical cost for a home inspection service ranges between $400 and $600, plus HST. Investing in a professional inspection offers peace of mind and helps you make informed decisions regarding the property's condition.
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Legal fees for property transactions can vary depending on the lawyer you choose. It's wise to explore different options to find the best fit for you. On average, you can expect legal fees to range from approximately $800 to $1000.
Keep in mind that this estimate does not cover disbursements, which typically range from $200 to $400.
Disbursements cover various expenses such as courier fees, photocopying, title searches, and registration costs. To get a clearer understanding of the total costs involved, it's recommended to discuss these details with your chosen lawyer.
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In Nova Scotia, land transfer tax varies by county. This tax is charged in every real estate transaction and is due by the buyer on closing day. In Halifax, the rate is 1.5% of the purchase price.
For Example: If the purchase price is $200,000, your Land Transfer Tax will equal $3000, due at closing.
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Closing Adjustments occur when the seller has prepaid for services or taxes that extend beyond the closing date. In such cases, the buyer is responsible for reimbursing the seller for the difference. Property taxes in Halifax, for instance, are paid twice a year in April and October, covering the following 6 months.
During the closing process, you will be required to reimburse the seller for the portion of property taxes they have already paid that goes beyond the closing date.
For instance, if the seller has paid $2000 for a 6-month period starting on April 1st and your closing date is June 30th, you would need to pay the seller for the months of July, August, and September, totalling $1,000.
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If you are not a resident of Nova Scotia at the time of purchase, the PDTT will apply. The PDTT is a 10% tax levied on the purchase price or the assessed value of the property (whichever is greater).
If you are a non-resident who plans to move to Nova Scotia within 6 months of the purchase, you are exempt from the tax but must provide proof of residency within the 6-month timeframe for the exemption to apply.
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