A home can look comfortably within budget until the offer is accepted and the additional bills begin to appear. Understanding what costs come with buying before you start viewing homes gives you a more honest price range, a stronger offer strategy, and fewer surprises on possession day. In Kelowna and across the Okanagan, those costs can vary considerably depending on whether you are buying a resale condo, a new build in Lake Country, or a family home in West Kelowna or Vernon.
The purchase price is only one part of the decision. A good plan leaves room for the costs required to close, the expenses that make the home livable right away, and a little breathing room after the keys are in your hand.
What costs come with buying a home before closing?
Before an offer becomes a completed purchase, most buyers will have several due-diligence and financing expenses. Some are paid only if a deal moves forward, while others may be incurred while you are still deciding whether a property is right for you.
The deposit and down payment
The deposit is paid after an offer is accepted, according to the terms in the contract. It shows the seller that you are committed to the purchase and is held in trust until completion. It is not an extra fee – it forms part of your down payment.
Your down payment is the portion of the price you pay yourself. For a home under $500,000, the minimum is generally 5 per cent. For homes between $500,000 and $999,999, the minimum is 5 per cent of the first $500,000 and 10 per cent of the remaining amount. A purchase of $1 million or more generally requires at least 20 per cent down.
Many Okanagan buyers choose to put down more than the minimum where possible. A larger down payment can reduce the mortgage amount, lower monthly payments, and may help make an offer more attractive. But it should not leave you without cash for closing, repairs, or a change in circumstances.
Mortgage default insurance and financing costs
If your down payment is less than 20 per cent, mortgage default insurance is usually required. The premium is commonly added to the mortgage rather than paid in one lump sum, although it still increases the amount you borrow and the interest paid over time. In BC, provincial sales tax may apply to the insurance premium and is typically paid at closing.
Your lender may also require an appraisal to confirm the property value supports the mortgage. Some lenders cover this expense, while others pass it on to the buyer. If you are arranging a mortgage with a broker or lender, ask early about appraisal fees, lender legal requirements, rate-hold conditions, and any costs related to a more complex file.
Home inspection and property review
A professional home inspection is one of the most useful costs a buyer can take on. It may identify issues with the roof, foundation, electrical system, plumbing, heating, insulation, drainage, or moisture management before you remove conditions. Inspection pricing depends on the property type, size, age, and whether you need specialized reports such as septic, well, pool, or environmental assessments.
In the Okanagan, the setting matters as much as the structure. A hillside property may call for closer attention to drainage and retaining walls. A rural home may need septic and well information. A property near the lake may have different considerations around floodplain information, access, or seasonal maintenance. An inspection cannot guarantee a perfect home, but it helps you make an informed decision and budget for what may be ahead.
For a strata property, reviewing the documents is equally important. The strata corporation’s financial statements, meeting minutes, depreciation report, bylaws, insurance information, and planned projects can reveal future costs that are not obvious at a showing.
Taxes and closing costs when buying in BC
Closing costs are the fees and taxes needed to transfer ownership and complete the mortgage. They are often separate from your down payment, so it is wise to set aside funds for them rather than treating every available dollar as down payment money.
Property transfer tax
Property transfer tax is often the largest closing cost for buyers in British Columbia. It is calculated on the purchase price using provincial rates. As a general guide, buyers pay 1 per cent on the first $200,000, 2 per cent on the portion from $200,000 to $2 million, and higher rates above that threshold.
For example, on an $800,000 home, the property transfer tax is generally $14,000. That can be a significant amount for buyers who have focused only on saving their down payment.
Some first-time homebuyers may qualify for a full or partial exemption, provided they and the property meet the provincial requirements. There are also exemptions and rebates in certain circumstances, including some newly built homes. Eligibility rules, price thresholds, residency requirements, and property conditions can change, so confirm the details with your lawyer or notary before relying on an exemption in your budget.
GST on new construction
Most resale homes do not have GST added to the purchase price. New homes, substantially renovated homes, and certain other transactions can be different. GST may be included in the advertised price, added on top, or handled through a builder’s contract in a way that requires close attention.
If you are purchasing a presale or a newly built home, ask exactly what is included, whether a GST rebate has been assumed, and what happens if your intended use of the property changes. A home bought as a principal residence can have different tax treatment than one purchased as a rental or investment property.
Legal or notary fees and title registration
A lawyer or notary handles the legal transfer, registers the title and mortgage, receives mortgage funds, pays the seller’s side through the appropriate process, and prepares the statement of adjustments. Their fee will usually include professional fees plus disbursements for registration, title searches, tax certificates, courier costs, and other administrative items.
The exact total varies by professional and transaction complexity. A straightforward purchase is usually less expensive than one involving a private well, acreage, an estate sale, a corporation, or an unusual title issue. Getting a quote before writing an offer makes it easier to plan.
Adjustments on completion
The statement of adjustments divides certain prepaid costs between buyer and seller as of the completion date. You may reimburse the seller for their unused portion of property taxes, utility charges, or strata fees if they have paid them in advance. In another situation, the seller may owe an adjustment back to you.
These amounts are not always large, but they can be meaningful if you complete near a property tax due date or buy a home with substantial annual taxes. Your legal professional will calculate them, but it helps to know they are part of the cash required at closing.
Budget for the first weeks of ownership
The expenses do not stop when the transaction completes. The move itself, immediate work on the property, and ongoing ownership costs all deserve a place in your plan.
Home insurance must normally be in place before your lender advances mortgage funds. Premiums depend on replacement value, location, claims history, construction, and coverage choices. For condos and townhomes, the strata corporation insures the building, but you still need personal unit coverage for belongings, liability, improvements, and your share of the strata deductible where applicable.
Moving costs range from a rented truck and a few helpful friends to a full-service moving company. If you are relocating to the Okanagan from another region, factor in travel, temporary accommodation, storage, and time away from work. Buyers who take possession before selling their current home may also face overlapping housing expenses.
Then there are the practical first-day purchases: changing locks, setting up internet, window coverings, cleaning, paint, garden tools, small repairs, and appliances if they were not included. A resale home may need less immediate work than expected, or more. A new build may be fresh and efficient but still require landscaping, fencing, blinds, and upgrades not included in the builder’s package.
For strata owners, monthly strata fees are a regular cost to examine before you buy. They can cover items such as building insurance, exterior maintenance, landscaping, water, amenities, and reserve funding. Low fees are not automatically better if the building has deferred maintenance or an underfunded contingency reserve fund. For detached homes, you will be directly responsible for those same types of costs over time, from roof replacement to snow removal and irrigation repairs.
How much should you set aside beyond your down payment?
There is no single number that fits every purchase, but buyers should build a separate closing-cost fund rather than estimating only the minimum down payment. The amount depends on price, financing, property type, tax exemptions, and whether the home is new or resale. In BC, property transfer tax alone can change the answer significantly.
Before you begin making offers, ask your mortgage professional for a full cash-to-close estimate and ask your Realtor to help identify the property-specific costs worth considering. On a particular home, that could mean reviewing strata documents, understanding a rural water system, checking inclusions, or looking ahead to likely repairs. The right home should fit your lifestyle in Kelowna, Peachland, Lake Country, West Kelowna, Vernon, or beyond, but it should also leave room for you to enjoy living there after completion.
Buying with a clear picture of the numbers does not take the excitement out of finding a home. It gives you the confidence to focus on the place that feels right, knowing you have planned for the costs that come with making it yours.