Aside from the actual purchase cost of your new home, there are a few other costs that come up in the process of buying a home that you should be aware of:
Home Inspection: Many people ask whether or not a home inspection is necessary. With very few exceptions, the answer is an emphatic yes. The inspection cost, which ranges from $400 - $750 depending on the size of the home, is microscopic compared to the total investment in your new home. And, aside from identifying any current or potential problems with your new home, the inspection process is also a good way for you to learn proper maintenance and repair techniques to best manage your investment over time.
Closing Costs: A lawyer or notary is required to complete the transfer of title and set-up any mortgage on the property. The cost for this service typically ranges from $700 - $1000.
Adjustments: Depending on whether you are buying a detached home or a strata unit, there will be 'adjustments' made on the day of possession. These will include things like property taxes, gas bills and strata fees. For example, if you buy a home where the previous owner has paid a full year of property taxes, you will be required to re-imburse them for the portion of the taxes payable once you take possession. These costs can vary greatly depending on the property, but typically ranges from a couple of hundred dollars to a couple of thousand.
Property Transfer Tax: This is perhaps the most painful of the initial costs. Unless you qualify for a first time home buyer's exemption, this provincial tax amounts to 1% of the first $100,000 and 2% on the balance of the purchase price. For example, for a $500,000 purchase, the property transfer tax would be $8000.
Moving: Depending whether you move yourself or hire professionals, this cost can range from almost free to upwards of $1000.
Though this list is not complete, it does cover the most commonly incurred costs for new buyers. As a rough guide, set aside 2.5% of the purchase price for additional costs. This will cover all of the above and leave a bit of extra for furniture, decor, etc.
And then, of course, if you are buying a new home, you will be subject to paying HST. Though there is a rebate up to $26,500 available to buyers, this cost can still be more substantial than all of the other costs combined.