Every first-time buyer I work with has the same moment. They've been saving for years, the down payment is sitting there, and then someone mentions property transfer tax and the room goes quiet.
The down payment is the big number. But it's not the only number, and a few thousand dollars you didn't plan for is the difference between a smooth completion day and a stressful one. So here's everything, line by line, the way I walk my own clients through it.
The down payment
This is the one everyone knows about, but the rules for the minimum trip people up.
In Canada, if you're putting down less than 20%, the minimum works like this: 5% on the first $500,000 of the price, then 10% on everything above that, up to $1.5 million. Over $1.5 million, you need 20% down, full stop.
So on a $700,000 townhome in Kelowna, your minimum isn't 5% ($35,000). It's $25,000 on the first $500K plus $20,000 on the next $200K, so $45,000.
One thing to know: your deposit is part of your down payment, not an extra cost. In the Okanagan, a deposit is usually around 5% and it's due shortly after you remove subjects. It gets held in trust and credited back to you on completion. It just means part of your down payment leaves your account a few weeks earlier than the rest.
Mortgage insurance (under 20% down)
If you're putting down less than 20%, your mortgage has to be insured through CMHC, Sagen or Canada Guaranty. This protects the lender, not you, but you're the one who pays for it.
The premium is a percentage of your mortgage amount, and the smaller your down payment, the higher it is:
5% to 9.99% down: 4.00% 10% to 14.99% down: 3.10% 15% to 19.99% down: 2.80%
On that $700,000 townhome with 10% down, your mortgage is $630,000 and the premium is 3.10%, so about $19,530.
Here's the good news: you don't write a cheque for this. It gets added to your mortgage and paid off over time. And unlike Ontario or Quebec, BC doesn't charge PST on the premium, so there's nothing due at closing for it. If you're a first-time buyer taking a 30-year amortization, expect a small surcharge on top (0.20%).
It's still a real cost though. You're paying interest on it for the life of the mortgage, so it's worth knowing the number.
Property transfer tax (PTT)
This is the big one nobody warns you about. PTT is a provincial tax you pay when a property is registered in your name, and it's calculated on fair market value, usually your purchase price:
1% on the first $200,000 2% from $200,000 to $2,000,000 3% from $2,000,000 to $3,000,000 3% plus an extra 2% on residential over $3,000,000
On a $700,000 home, that's $2,000 plus $10,000, so $12,000. Cash. Due on completion. It can't go on your mortgage.
How first-time buyers get a break
If you qualify as a first-time buyer, you're exempt from PTT on the first $500,000 of the price, as long as the home is worth $835,000 or less. That's a savings of up to $8,000. Between $835,000 and $860,000 the exemption phases out, and above $860,000 you pay the full amount.
Here's where people get it wrong: the exemption doesn't wipe out the whole tax. It covers the first $500K. On our $700,000 example, you'd still owe $4,000 instead of $12,000. Way better, but not zero.
To qualify, the short version is:
You're a Canadian citizen or permanent resident You've lived in BC for 12 straight months before buying, or filed two BC tax returns in the last six years You've never owned a principal residence anywhere in the world, and never used this exemption before The home is going to be your principal residence (you need to move in within 92 days and live there for the first year)
Your lawyer or notary claims it for you on the transfer paperwork. If you're buying new construction, there's a separate newly built home exemption with higher thresholds, and new builds come with GST too. That's a whole other post.
Legal fees
In BC, a lawyer or notary handles the transfer, registers your mortgage, and moves the money. Budget roughly $1,500 to $2,500 all in. That covers their fee, plus disbursements like title searches, registration fees and usually title insurance, plus GST and PST on the services. Get a quote upfront. Most will give you one flat number.
Home inspection
Usually $500 to $800 for a typical home in the Okanagan, more for a big house or if you add things like a sewer scope. Worth every dollar. This one gets paid during your subject period, weeks before closing, so it won't show up on your statement. But it's still money out of your pocket.
Appraisal
Your lender needs to confirm the home is worth what you're paying. On an insured mortgage (under 20% down), the insurer often handles the valuation and you may never see a bill. With 20% or more down, you're more likely to need a full appraisal, typically $400 to $600. Some lenders cover it, some don't. Ask your mortgage broker early.
Adjustments: the part nobody understands
When you get your statement of adjustments from your lawyer, there's a section that sorts out who owes who for things that have been prepaid or are still owing on the house. The idea is simple: you pay for the days you own the home, the seller pays for the days they did.
Property taxes are the big one. In BC, property taxes are billed for the calendar year and due in early July.
If you close after July: the seller has already paid the full year. So you reimburse them for the days from your completion date to December 31st. Close in October and you're paying back about three months of taxes. If you close before July: the taxes haven't been paid yet. The seller credits you for their share (January 1st to completion), and then you pay the full bill when it's due. Don't spend that credit. That money is for July.
And once you own the home, claim your Home Owner Grant on your property tax bill. It knocks a real chunk off every year if it's your principal residence, and a lot of first-time buyers don't know it exists.
Strata fees get the same treatment. If the seller paid the month, you reimburse them for your days.
Utilities are usually handled directly. In Kelowna, city water and sewer is often adjusted or read at closing, and you set up FortisBC and internet in your own name before you move in.
Your deposit shows up here as a credit, since it's already in trust.
Adjustments can go either way. Sometimes they add a few hundred dollars, sometimes they save you a few hundred. They're rarely huge, but they're rarely zero.
The stuff that isn't on the statement
Home insurance: your lender won't fund the mortgage without proof of it, so get quotes a couple of weeks out. Moving costs: truck, movers, or pizza for your friends. Day-one stuff: changing the locks, a lawnmower, the couch you've been putting off buying.
Also, a quick note on timing: in BC, the completion date is when money moves and title transfers, and possession is usually the next day. So you get the keys the day after your money clears, not the same day.
So what's the real number?
Here's our example: a first-time buyer, $700,000 townhome in Kelowna, 10% down, closing in October. Down payment (including deposit) $70,000 PTT after first-time buyer exemption $4,000 Legal fees ~$2,000 Home inspection ~$650 Property tax adjustment (Oct to Dec) ~$700 Home insurance, moving, misc ~$1,500 Total cash needed ~$78,850
Plus about $19,500 of mortgage insurance added to your mortgage, which you don't pay in cash.
My rule of thumb: on top of your down payment, budget 1.5% to 2% of the purchase price for closing costs if you're a first-time buyer. If you're not, PTT alone gets you close to 2%, so plan for more.
The bottom line
None of these costs are hidden. They're just not talked about enough. The buyers who have the smoothest closings are the ones who knew the full number before they wrote an offer, not the ones who found out from their lawyer a week before completion.
If you want me to run these numbers for your actual situation, your price range, your down payment, the neighbourhoods you're looking at, that's exactly what my calls are for. Twenty minutes, no pressure, even if you're a year out.
Teagan Adams, REALTOR®
Born and raised in Kelowna. I write these to answer the questions I get asked every week: one question per post, answered properly.
