The purchase of a property is considered the largest investment in most people’s lives. You will find below some advice and information concerning the various steps to follow and expenses related to the purchase.

FIRST, a preauthorised mortgage is very important when presenting an offer. This is now nearly essential in the process of purchasing a house. This preauthorisation is an important tool while negotiating the purchase of property. When presented simultaneously with the offer to purchase, it reassures the vendor in the financial capacity of the buyer. I thus invite you to make this move even before you start your research since it will give you a good idea of the amount you could spend on your next property.

ANTICIPATED EXPENSES WHEN
PURCHASING PROPERTY

Before the signing of the sale:
  • Inspection by a building expert
This is essential in the context of purchasing property whether new or old. You must anticipate an amount of 350 $ to 550 $ for a complete and qualified inspection. When selecting an inspector, make sure he has liability insurance.

SALES TAXES: APPLIES TO NEW PROPERTY ONLY

In most cases, the sale price includes the sales taxes. A discount is granted at the Provincial and Federal levels. The amount of the discount is 2.52 % (36% of 7%) at the Federal level and approximately 2.5% at the Provincial level. The maximum allowed amount of the admissible property is 450 000 $ at the Federal level and 225 000 $ at the Provincial level. The tax discount decreases or is null when the amount for the property is above this value. Consult the Provincial government site for information:
http://www.revenu.gouv.qc.ca/fr/taxes/consommateur/index.asp.

The tax discount may be included in the global sale price of the property in which case the contractor will take the steps to obtain the tax credit.

ANTICIPATED EXPENSES AT THE SIGNING OF THE ACT OF SALE AT THE NOTARY:

  • Notary fees
The notary looks after three operations when you are selling a property and/or acquiring an other one: obtain the discharge of mortgage of the sold property, register the mortgage for the new property and authenticate the sale of the new property.

The discharge cost is approximately 400 $ for professional fees, fees for the registry office and the cost of the trust account. Registration of a new loan costs about 250 $ and the notary fees for the sale is about 1000 $. These figures are approximate and may vary according to location, the complexity of the file and the notary.
  • Sharing (reimbursement) the taxes:
The reimbursement of taxes to the vendor (if required) will be calculated from the date of sale and you will have to reimburse the seller for the number of days he has already paid for the following property taxes:

a) Municipal taxes
b) School taxes
Here the vendor is reimbursed for costs he has paid in advance which covered a period after the sale or a product which he has not used.

For example, many Québec municipalities bill taxes in two payments; in March and July. If the seller has paid the second payment on the 1st of July and the transaction is concluded at the notary on the 1st of August, an adjustment must be made to compensate for the taxes paid in advance by the seller. This adjustment shall be prorated to the number of days covered by the amount paid by the seller.

Here is a non-exhaustive list of elements susceptible to adjustments: heating oil, municipal and school taxes, alarm system fees, propane, and condo fees paid in advance.
  • Heating oil tank:
If the property is equipped with an oil furnace, the seller shall have the tank filled on the day of the notarised transaction; bring the bill to the notary. The buyer shall pay the full cost.
  • Electric (Hydro-Québec) and gas (Gaz Métropolitain) meters
The buyer and the seller shall inform Hydro-Québec and Gaz Métropolitain (if applicable) of the date of the change of ownership in order that a meter reading be taken on this date and in order that the energy costs be apportioned to the buyer and seller respectively at this occupation date.
  • Householder comprehensive insurance:
It must not be forgotten that on the date of the signature of the deed, a proof of householder comprehensive insurance to an amount equivalent or greater than that of the mortgage is in force.

ANTICIPATED EXPENSES AFTER THE SIGNATURE OF THE DEED AT THE NOTARY:

  • Les droits sur les mutations immobilières or « Welcome tax »:
The municipality into which you are moving will send you a transfer tax, in the months following the signature of the deed, and it will be calculated in accordance with the sale price of the property and the following schedule:

0, 50 % of the first $ 50 000
1, 00 % from 50 000 $ to $ 250 000
1, 50 % above $ 250 000
  • Moving, painting, decoration costs etc…