The Price of the House Isn’t the Only Thing You’ll Pay For

The Price of the House Isn’t the Only Thing You’ll Pay For

When you're buying a home, it's easy to focus on the purchase price and down payment.

But those aren't the only expenses to consider.

Before you decide how much home you can comfortably afford, it's worth looking at the other costs that can come with purchasing a property. Some happen around closing, while others come once you have the keys.

Here are five areas Alberta buyers should consider when building their home-buying budget.

1. Land Titles & Registration Fees

Buying a home in Alberta involves registering the transfer of ownership with Land Titles.

There is a registration fee for the transfer of land. If you're financing the purchase with a mortgage, there is also a mortgage registration fee.

Under Alberta's current fee schedule, the transfer registration fee is $50 plus $5 for each $5,000 of value, while mortgage registration is $50 plus $5 for each $5,000 of mortgage principal. Additional fees can apply in certain circumstances.

These costs are separate from your down payment, so they should be accounted for when planning your cash requirements for closing.

The takeaway: Don't assume your down payment represents all the cash you'll need to complete the purchase.

2. Taxes & Property Tax Adjustments

Taxes can come into play differently depending on the property and transaction.

For a resale property, your lawyer's statement of adjustments can include a property tax adjustment. The amount depends on factors such as the property's taxes, what has already been paid, and the closing date.

GST is another consideration, particularly when purchasing a new or substantially renovated home. Whether GST applies and whether a buyer qualifies for a rebate depends on the circumstances and applicable rules.

Eligible first-time home buyers may also qualify for the federal First-time Home Buyers' GST/HST rebate, subject to the program's requirements.

One Alberta-specific point worth knowing: Alberta does not have a separate provincial land transfer tax. However, buyers still have other transaction and closing expenses to plan for.

The takeaway: Ask your lawyer about your expected statement of adjustments and any taxes or rebates that may apply to your specific purchase.

3. Financing-Related Costs

Your mortgage isn't necessarily limited to the monthly payment.

Depending on your situation and lender, you may encounter financing-related expenses such as an appraisal or other lender or professional charges.

Mortgage default insurance is another consideration for buyers who have a down payment of less than 20%, subject to the applicable rules.

Not every buyer will have the same financing costs, so it's important to ask your lender what applies to your particular mortgage.

The takeaway: Before making an offer, understand not only your expected monthly payment, but also the upfront costs associated with your financing.

4. Moving Expenses

Once the purchase is complete, there's still the move itself.

Depending on your situation, you may need to budget for:

• Professional movers
• Truck or trailer rental
• Packing materials
• Storage
• Cleaning
• Other move-related expenses

The amount can vary considerably depending on how much you're moving and whether you're hiring professionals.

The takeaway: Get moving quotes early and include the cost in your overall moving budget.

5. Renovations & Furnishing

This isn't a closing cost, but it's one of the easiest expenses to overlook when planning a purchase.

Even a move-in-ready home may leave you wanting to make changes.

You might need furniture, appliances, window coverings, paint, flooring, or other improvements. Some buyers may have immediate repairs or maintenance to deal with as well.

The important thing is to separate needs from wants.

You don't have to complete every renovation immediately.

The takeaway: Keep some cash available after closing rather than spending every available dollar on the purchase itself.

Budget for More Than the Purchase Price

Buying a home involves more than the number on the listing.

Your overall budget may need to account for:

Purchase price + down payment + transaction/closing costs + financing-related costs + moving expenses + immediate home expenses

The exact amount will depend on your property, mortgage, closing date, and individual circumstances.

If you're buying in Edmonton, St. Albert, or the surrounding area, understanding these expenses before you start shopping can help you make a more informed decision about what fits your budget.

A home may be the biggest purchase you're making, but the purchase price isn't the only number worth planning for.

This information is for general educational purposes only. Costs, taxes, fees, and eligibility requirements can vary. Buyers should confirm their specific costs with their lawyer, lender, and other appropriate professionals.