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What are the expenses involved in buying a home?

Published on February 21, 2020

Buying a house involves a number of costs. Some are one-time expenses, while others are recurring and will need to be factored into your yearly, if not monthly, budget.

Whether or not this will be your first home, being aware of the expenses involved will help you do your research and not be surprised by unexpected bills. 


Building inspector

Having the property you’re interested in inspected will reveal any major visible issues with the property. While it isn’t mandatory, this precautionary measure will buy you peace of mind. Usually, buyers make their offer to purchase conditional on receiving a favourable inspection.

Home inspections generally cost $500 and up.


The final step in every real estate transaction in Quebec takes place at the notary’s office. It is usually the buyer who chooses the notary who will prepare the bill of sale. The buyer also pays the notary's fees.

Plan at least $1,200 for this step. 

Financing expenses 

Down payment

If you want to buy a property in Canada, you’ll need to provide at least 5% of the purchase price in cash, usually taken from one’s personal savings. However, first-time buyers can withdraw part of their RRSPs without being taxed thanks to the Home Buyers' Plan (HBP)

Mortgage loan insurance

If you make a down payment that is less than 20% of the purchase price, you will need to purchase mortgage loan insurance, from the Canada Mortgage and Housing Corporation (CMHC) for example.

Mortgage penalty

Divorcing, having a child, changing jobs… there are many reasons why you might need to break your mortgage before the end of its term. Just be aware that there will be a penalty for doing so. The amount will depend on the lender and on the conditions of the agreement, but it could be several hundred dollars to several thousand.


Transfer tax

You can expect to receive a bill for the real property transfer tax, also known as the “welcome tax”, from your new municipality a few weeks or months after the bill of sale is signed. The amount will depend on the municipality and on the value of the property. The tax calculation is based on the higher of these two amounts: the price paid at purchase or the municipal evaluation.

To know more about how this tax is calculated (site in French only).

Municipal and school taxes

Based on the value of the residence and its property, municipal taxes are used to pay for such services as wastewater treatment and the water supply sewer systems and others. School taxes pay for some of the school board’s activities, like administration of its educational establishments, maintenance of the buildings and a part of the school transportation costs.

Both of these taxes are recurring expenses. You will receive a bill every year.


GST and QST apply on the purchase of new homes. The GST is 5% and the QST is 9.975%, for a total of 14.975% to be paid on the purchase price. However, buyers can request a refund of these taxes if they meet certain eligibility criteria (site in French only).


In addition to the above expenses, don’t underestimate your moving costs. Whether you hire a moving company or rent a truck and have friends help, moving is rarely free. Even if you keep the same cable and Internet providers, they may charge a move or reconnection fee. 

Moving into a new space often requires the purchase of new furniture and appliances. Getting equipped will be more costly for first-time home buyers because they’ll need the basics like a lawnmower, snowblower and patio set.

Adding a personal touch through a fresh coat of paint can also add up, as do the other minor repairs you may need to do upon moving in.

In addition to these isolated expenses, keep in mind that your home insurance and electricity costs may be higher. And if you’re buying a condo, don’t forget to add condo fees to your monthly budget.