Closing Costs Alberta

The average closing cost in Alberta is estimated at 1% - 4.5% of the home's purchase price. These closing costs in Alberta include legal fees, land transfer tax, property survey, home inspection, property appraisal,  insurance, and property tax adjustments. Closing costs are one of the most commonly asked questions we get from our buyers how much money do I need for closing costs? So we have created this chart below to give you a average closing costs in Alberta.

You need to take more than just the purchase price of your new home into consideration. There are many additional expenses involved with purchasing a home in Alberta that are just as important. We want you to find a home you can comfortably afford that appeals to your emotions, lifestyle and budget while meeting all of your expectations during this exciting time.

Can Closing Costs Be Included in a Mortgage?

To give you the short answer, typically no. However, you are probably wondering who usually pays closing costs. Although there are certain costs you can typically include in your mortgage payments, we have seen other costs you must pay separately. The costs you have to pay are explained below.

Adjustment Costs:
• Your cost is usually between $300 and $500
• You will reimburse the owner for property taxes after your closing date

Legal Fees:
• Legal fees in Alberta are generally between $500 and $1,500
• Your paperwork must be completed by a lawyer
• Make certain you are aware of all fees because they are different for each lawyer

Property Insurance:
• Your property insurance costs are typically monthly, or you can choose to pay it yearly in a lump sum, and really vary depending on the type of home you purchase
• You will be required by your mortgage provider to have insurance
• Your insurance is for the cost of replacing your home

Moving Expenses:
• There are a wide range of moving expenses you will need to pay
• You can choose an insured moving company or you can offer your friends money or snacks to help you move

Utility Service Fees:
• We recommend expecting to pay between $35 and $50 for each utility
• You can determine your exact fees by contacting your Alberta utility providers

The Recurring Costs:
• Your recurring costs include insurance, property taxes and homeowner's fees
• These costs are based on how long you own your home for the year

Closing Costs Alberta You May Need to Pay

There are certain costs you may be responsible for paying. You may be wondering, can closing costs be included in a mortgage? Some closing costs can, but you may be responsible for the costs detailed below.

Property Appraisal:
• We recommend allowing $300 to $500 for your home appraisal in Calgary
• If you are purchasing an extremely rural, unique or large home, your cost is higher

Property Survey:
• Your mortgage provider may require a recent survey
• Your cost is between $1,000 and $2,000
• If a survey is unavailable through the seller, this expense may be necessary
• We recommend asking if title insurance is acceptable to your lender instead

Home Inspection Fee:
• We recommend a home inspection prior to purchasing your new home
• A home inspection will reveal anything wrong with the home

Estoppel Certificate Fee:
• This fee does not usually exceed $200
• You need this certificate to purchase a strata unit or a condominium in Calgary
• The certificate shows you if outstanding interest is due from the previous owner
• Unpaid condo contributions or interest are also shown

Closing Costs when Buying a Home in Alberta

If you are planning on buying a house or condo, you may know that there are going to be those dreaded closing costs. But how much are the closing costs going to set you back when it comes time to fork out the money for your dream home!

Here is a list of the most essential and typical closing costs associated with buying a house in Calgary.

Closing Costs before You Move In:

• Your Deposit on the home can be anywhere from $2,000 upwards of 5-10% of the value of the house. The cost of this depends on who you are buying from and what price range you are purchasing in.
• Inspection Costs can include a Home Inspection and, or a Condo document inspection, a home inspection can be around $500, and the condo document inspection can be approximately $400-$500 as well. 
• Bank Appraisal can cost around $300. If you do have this cost, many times, your mortgage broker or bank can get this waived, so make sure you ask.

Closing Costs On Possession Day:

• Legal Fees are paid when you meet with your lawyer to sign all the documents when closing on your new home. This is approximately $1,000 to $1,500
• Remaining Balance of the Purchase Price is owed when you meet with your lawyer on closing. This will be a combination of the remainder of your down payment (minus what you paid for your deposit), mixed with the amount of your mortgage. 
• Speaking of Mortgages, you may have CMHC Fees or Mortgage insurance fees can be $2,000 or more. This cost is calculated and included in your mortgage, however, ask your broker or bank for the breakdown, so you are aware of what it is.
• GST will only apply for newly built homes, but this is a cost you must be aware of if you are purchasing a brand new home.
• Home Insurance will need to be in place for your possession day, so this will be a combination of home and content insurance that you will need to set up. This cost is around $1,500 or more per year.

Closing Costs On and After Moving Day:

• Moving Costs are totally dependant on the size of the house, which equates to the amount of 'stuff' you are moving. $1,000 or more is very typical.
• Connection Fees for Utilities will vary
• Immediate Expenses for Maintenance and Repair costs will vary. Use your home inspection as a guide to determine what requires immediate attention once the home is yours.

Are there a tax credit on closing cost for first time home buyers?

Yes there is a tax credit for first-time home buyer’s tax credit offered by the Canadian government that can help with closing costs. According to Craig Lord a Global news real estate expert buyers can claim up to $10,000 on their income taxes for the purchase of a qualifying property which can mitigate these closing costs.

Who Usually Pays Closing Cost?

In Alberta, it is the buyer that is covering the closing costs. We have seen other provinces and states where it's more typical that the seller covers some costs, but that isn't the case in Alberta. When you understand all of the costs pertaining to purchasing a home, you will be able to locate the ideal home for your needs, desires and budget.

If you intend to make a downpayment for less than 20 percent of the value of the home, you will be required to ensure your mortgage. You can decide if you prefer to add this cost to your mortgage or if you want to pay the cost in advance.

When purchasing a brand new home, this is a home that has never been lived in by anyone else. You will be responsible for paying the GST or goods and services tax. This amount should be included in your contract cost. You may be entitled to a partial rebate if you intend to use the new home as your primary residence and the value is below $450,000. You can find additional information through a real estate accountant or the official website for Revenue Canada. In Alberta, you are required to have a $2,000 new hone warranty if you intend to build a new home.

You may also qualify for a GST rebate if you are purchasing a home in Alberta for $350,000. Your 36 percent rebate is for five percent of the GST you pay. The rebate was created for properties selling between $350,000 and $450,000. Any property selling for more than $450,000 does not qualify. We want you to know your closing costs will be less in Alberta than anywhere else in Canada.

This is because of the tax reduction in Alberta. When you do not have to pay a land transfer tax or property tax, you will save a lot of money. This will ensure your closing costs are decreased. You will not find this option available anywhere else in Canada.

Every time you purchase or sell a property, you will be responsible for paying the closing costs in Alberta. The specific amount is dependent on the final sale price of the property you intend to purchase in Alberta. The team at Chamberlain Real Estate Group recommend budgeting for between two and four percent of the final sale price of the home to be safe.