The following article is a guest post by Brennan Valenzuela, a writer for Ratehub.ca, a website that allows people to compare Canadian mortgage rates. It also features a comprehensive education centre to help address common first-time home buyer questions. Ratehub is a great source for all the latest Canadian mortgage news.
The Maritime Provinces typically have lower average home prices than the rest of Canada, which is a bonus if you’re looking to buy in a new house or condo closer to the Atlantic. According to MLS®, sales activity in Nova Scotia is expected to remain relatively level over the next two years, while average home prices will see a boost of 3.5% in 2012 (to $220,000). Nova Scotia has two very famous exports: Alexander Keith’s beer (est. in 1820) and Sidney Crosby (est. in 1987).
Nova Scotia mortgage rates
Nova Scotia mortgage rates are predicted to moderately increase over the next 12 months. However, a moderate increase would still leave mortgage rates in Nova Scotia near relative historic lows.
Here is a summary of the costs that you will pay on the day of closing in addition to your down payment. This list should give you an idea of what to expect for your home purchase costs beyond the mortgage financing. So, when the time comes, you’ll have everything in order to move into the beautiful curved towers at Skye Halifax or your equivalent dream home.
Deed Transfer Tax
Also known as land transfer tax; deed transfer tax is set by each Municipality within Nova Scotia. The tax rate can vary from 0.0% to 1.5% of the purchase price depending on the municipality. For example, purchasing a home in Halifax for $220,000 (the average Nova Scotia home price) would mean a deed transfer tax of $3,300.
Legal fees and disbursements
Your real estate lawyer will handle all the necessary legal paperwork for your home purchase. Your lawyer will also oversee the submission of some of the closing costs. The cost of a lawyer will vary, but can range upwards of $1000. You must also foot the bill for disbursements which include things such as courier costs and registration costs.
It is advised that you hire the services of a home inspector to examine the condition of your home before you fully commit to the property. The home inspection will reveal if there are any structural flaws to help you avoid thousands of dollars in repair costs. Bringing in a home inspector varies in price depending on the size of the property, how far they have to travel, and type of building. Expect prices no less than $500.
Property insurance is required when you want to protect your home from damage. This cost will vary depending on the property value, insurance company and municipality.
A lender will not finance your home purchase unless they are certain the home is on the land described in the deed and mortgage. Obtaining title insurance, which also protects your ownership in the property will satisfy this requirement. If not, you will have to obtain a location certificate prepared by a Nova Scotia Land Surveyor.
HST must be paid on new home purchases (as well as home with extensive renovations). So prepare for HST accordingly if you’ve been eyeballing the lovely Kings Wharf condo.
First-time home buyer rebates
Nova Scotia has a special first-time home buyer rebate to help reduce your total purchase costs. For newly constructed homes, an HST rebate of 1.5% of the purchase price is available, up to a maximum of $1500. You will have to contact Service Nova Scotia and Municipal Relations to apply. In addition, there is also a first-time home buyer’s tax credit that can be claimed on your personal tax form which rebates a maximum of $750.
Once your purchase costs have been properly handled and you’ve settled into your new Nova Scotia home – you can relax in front of the TV with an Alexander Keith’s in hand to watch Sid the Kid skate.