British Columbia Mortgage Payment Calculator 2024

Located in the western most part of Canada, British Columbia (B.C.) is the third largest province by area in Canada, covering about 944,735 square kilometers in area (source: Statistics Canada). B.C. is Canada’s third most populous province with an estimated population of over 5.2M in July 2021 (source: B.C. Population Estimates). As per the income-based GDP estimates of Statistics Canada, B.C. accounted for about 14% of Canada’s GDP at market prices in 2021, with a GDP of over $350k million. The median after-tax income in B.C. was approximately $67,500 in 2020, $700 higher than the national median (source: Statistics Canada).

Like the rest of Canada, the B.C. housing market also saw house prices soar to new heights during the pandemic, and the bull run lasted up till March 2022 when the prices peaked. Following the peak, the prices started to fall because of the continuous Bank of Canada rate hikes as a measure to curb inflation, which in turn led the mortgage rates to increase significantly. As of October 2022, the average home price in British Columbia was $932,979, representing an annual decrease of 3%. By October, the home prices were down 16% in comparison to the peak of $1,109,152 in February 2022. The following graph shows the variation of average home prices in B.C. from October 2021 to October 2022.

B.C. House Prices

The most expensive market in British Columbia continues to be the Greater Vancouver (also known as Metro Vancouver) housing market with an average sold price of $1,231,805 for October 2022, followed by Fraser Valley with an average sold price of $952,950. The average sold price of houses in Victoria was $943,834 and that in Vancouver Island was $732,864. The house prices in Okanagan and Chilliwack were $727,257 and $710,690 respectively. With the average house prices of $592,617 and $577,107, Kamloops and Powell River remained relatively more affordable. There still are a lot of homes priced over $1,000,000 in the larger municipalities of B.C. that do not qualify for a CMHC mortgage insurance and require a minimum downpayment of 20%.

Following were the average sold prices for different home types in the major cities of B.C. in November 2022.

Greater Vancouver

Vancouver East

Vancouver West

Richmond

Coquitlam

Generally speaking, it is good to budget for 3% - 4% of the home cost for the closing cost. The largest chunk of the closing cost is the property transfer tax. If you qualify for an exemption or rebate on the property transfer tax, the closing cost may be a bit lower. You can also expect to pay the following fees as a part of your closing cost.

The above estimates may vary based on the size of the property, type of the property and its location. To gain an understanding of the fees you may be required to pay, you can get quotes from multiple service providers.

In British Columbia, a property transfer tax (PTT) is the equivalent of land transfer tax in other provinces. A property transfer tax is payable to the government on the fair market value of the property that is being purchased. This tax is calculated a marginal tax rate as follows:

For example, if you purchase a property at $500,000, the land transfer tax would be a total of -

• For first $200,000 - $200,000 × 1% = $2,000
• For $200,000 up to $500,000 - $300,000 × 2% = $6,000

The total property transfer tax payable would be $8,000.

Under certain conditions, you may be able to receive a full or partial exemption from the property transfer tax in British Columbia.

The B.C. government has a first-time home buyers’ program that exempts qualifying first-time buyers from property transfer tax under some conditions. There is a full exemption for properties with a value lower than $500,000, while properties with a value between $500,000 and $525,000 are eligible for a partial property transfer tax rebate. The rebates are valid only for properties that are to be used as principal residences and are built on land less than 0.5 hectares in area. Read more about the first-time home buyer incentive in British Columbia.

If you buy a newly constructed property in British Columbia, you can get a full or partial rebate on the property transfer tax. Properties that have a fair market value below $750,000 can qualify for a full exemption, while properties with a fair market value between $750,000 and $800,000 can qualify for a partial exemption. The buyer must move into the property within 92 days of registration to qualify for the exemption and they are required to use the property as their principal residence at least for the remainder of the first year.

The purchase of a vacant land may also be eligible for a full refund on the property transfer tax under the newly built home exemption. This refund applies when you build a new house on the land, and the value of the land plus the cost of the newly constructed home is less than $800,000. To qualify for this exemption, the newly built home must be your principal residence at least for the remainder of the first year. You may be able to qualify for a partial refund when you move out of the house before the end of the first year.

A real estate lawyer can ensure that you are getting a fair deal and protect you from potential frauds, while also helping protect your interests while buying a house. Even though having a lawyer is not a legal requirement in B.C., it is advisable to hire a lawyer or notary public, especially when you are a first-time buyer. On an average, legal fees for real estate transactions range between $500 - $1,500. This fee may not include disbursements such as bank transfers, title searches and other third-party expenses; and it is advisable to seek clarity from your lawyer about the same.

A lawyer or notary can help you with the following:

• Ensure that the home is Homeowner Protection Act compliant.
• Run a title search and find out if there are people other than the seller having any legal rights over the property or if there are any restrictive covenants or easements registered on the property.
• Preparing documents for ownership transfer and facilitating signing of the same.
• Ensure there are no unpaid property taxes or bills that are meant to be paid by the seller.
• Create the statement of adjustments that outlines all the monies owed by you and help you with property transfer taxes and exemptions.
• Facilitate closing, deliver the final amount due to the seller, ensure all the conditions of the agreement are met and ensure that the title is registered in your name.

Foreign nationals, foreign corporations and taxable trustees will face a temporary two year ban on buying real-estate in Canada starting January 1, 2023. By definition, foreign nationals are defined as individuals who are neither citizens nor permanent residents of Canada. Before this ban, foreign buyers had to pay an additional property transfer tax of 20% on property transfers registered after February 21, 2018 and located in one of the following areas:

• Capital Regional District
• Fraser Valley Regional District
• Metro Vancouver Regional District
• Regional District of Central Okanagan
• Regional District of Nanaimo

For properties located on Tsawwassen First Nation treaty lands, buyers are not required to pay this additional tax. B.C. provincial nominees and foreign nationals acquiring property on behalf of a Canadian-controlled limited partnership are exempt from this additional tax.

Another tax that may be required to pay by homeowners in B.C. is the Speculation and Vacancy tax, which is determined on the basis of how the property is used in the designated tax areas. This tax is designed by the B.C. government with an aim to turn empty houses into housing for British Columbians and to support affordable housing initiatives. British Columbians owners are exempt from this tax if the property is their principal residence. Property owners need to submit an annual declaration for the tax. The tax rates since 2019 are as follows:

• 2% of the assessed value of the property for foreign owners and satellite families
• 0.5% of the assessed value of the property for Canadian citizens or permanent residents of Canada, who are not members of a satellite family

In addition to the above, homeowners in Vancouver are required to pay a Vancouver Empty Homes Tax if their home was unoccupied in the previous calendar year. As of 2021, the tax rate was 3% of the assessed value of the property.

British Columbia is among the most expensive provinces to live in Canada, with high real estate prices and high rental costs being the major reason for it. On an average, a family of three in Vancouver can expect to pay around $5,000 every month for food, shelter, transportation and childcare. The high cost of living in Vancouver is second to only Toronto in Canada.

Since Q2 of 2022, high inflation rates have been adding to the unaffordability in British Columbia. The CPI rose at a significant 7.8% in British Columbia in October 2022 compared to October 2021 as per the Statistics Canada’s Consumer Price Index data. This was higher than the national inflation rate of 6.9%. The inflation rate for food was over 9%, while the inflation rate for energy was approximately 21%. Leaving the food and energy out, the core inflation rate was approximately 7%. The gas prices inflated by a staggering 29% year-over-year in October 2022.

The population of British Columbia is projected to rise at an annual rate of 1.1% to 6,515,558 people by 2041, an increase of almost 27% compared to 5,139,568 persons in 2020 (source: BC Sub-Provincial Population Projections). Due to warmer weather in some parts of the province, British Columbia has been increasingly attracting retirees. Currently, seniors represent about 19% of the population, which is expected to rise to 25% by 2041. The slower rate of growth of the working population compared to dependents can therefore pose a future socio-economic challenge in British Columbia.

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Property owners in Canada have to pay property taxes to the local municipality annually. These property taxes are used to pay for city services such as garbage collection, the police, public transit, public schools and the fire department. The property taxes are payable on a percentage basis depending on the assessed value of the property and the municipality under which the property falls. The percentages are revised every year with the as per the municipal budget of that year. Most of the time, the assessed value is lower than the fair market value of the property and you can find out the assessed value of a property through the B.C. Assessment website using the address of the property.

Property tax rates are decided by the city and are different across different cities within a province. Property tax rates in British Columbia include two main components –

• A city tax rate, and
• An education tax rate.

The property tax rates for some of the major municipalities in British Columbia are listed below.