Buyer’s Purchasing Costs in Calgary

When purchasing a home in Calgary, the purchase price is only one part of the total financial commitment. In addition to the down payment, buyers should be prepared for several other costs associated with completing the transaction. These are commonly referred to as closing costs and purchase-related expenses, and they are payable at or before closing.

For clarity, buyer costs can generally be divided into two main categories.

1. Down Payment

The down payment is the upfront amount paid toward the purchase price of the property.

In Canada, minimum down payment requirements are as follows:

For homes priced at $500,000 or less:

Minimum 5% of the purchase price.

For homes priced above $500,000:

5% on the first $500,000 and 10% on the portion above $500,000.

Buyers with a down payment of less than 20% will also be required to obtain mortgage default insurance.

2. Closing and Purchase-Related Costs

In addition to the down payment, buyers must budget for several other expenses that arise during the purchase process. In Calgary and across Alberta, these commonly include:

Legal Fees and Disbursements

Buyers retain a real estate lawyer to handle title searches, document preparation, registration, and the transfer of ownership. Legal fees typically range from $1,200 to $2,500, depending on the transaction.

3.Home Inspection

A professional home inspection is strongly recommended to identify potential structural, mechanical, or safety issues. Costs usually range from $300 to $800 or more, depending on the size and type of property.

4.Appraisal and Mortgage-Related Costs

Lenders may require a professional appraisal to confirm the property’s value. Additional mortgage-related fees may apply, particularly if the down payment is under 20%.

5.Title Insurance

Title insurance protects the buyer against certain title defects, fraud, or registration errors. This is typically a one-time cost of a few hundred dollars.

6.Property Insurance

Most lenders require proof of home insurance before funding the mortgage. The first year of property insurance is often arranged and paid at or before closing.

7.Property Tax Adjustments and Municipal Fees

Buyers may need to reimburse the seller for any prepaid property taxes or municipal charges, based on the possession date.

8.GST on New Homes

For newly built homes, 5% GST may apply. In some cases, the GST is included in the purchase price, and partial rebates may be available if the home is used as a principal residence.

9.Overall Cost Estimate

As a general guideline, buyers in Calgary should expect closing and purchase-related costs to total approximately 1% to 4% of the purchase price, in addition to the down payment.

For example, on a $500,000 home, this could amount to $10,000–$20,000 or more, depending on the property and financing structure.

A commonly used rule of thumb is to set aside 2%–3% of the purchase price for closing costs.

10.Costs Not Applicable in Calgary

Unlike some other provinces, such as Ontario or British Columbia, Alberta does not charge a land transfer tax. Instead, buyers pay relatively modest land title registration and administrative fees, which helps keep overall closing costs lower.