These fees, including attorney’s fees, land transfer taxes, and other administrative fees, vary slightly based on the property’s price and location, but are typically 1.5% to 4% of the purchase price. If you’ve saved $50,000 for a down payment, you’ll either need to have extra savings to cover closing costs or subtract those expenses from the down payment itself.

You should also set aside money for the cost of home inspections, utilities, prepaid fees for the property you are buying (for example, refunding the previous owner for property taxes or condo fees they prepaid), plus any furniture and appliances that you want to buy right away.

When you add it all up, if you’re expecting a 5% down payment, you’ll actually need at least 6.5% of the purchase price to cover these initial costs, notes Patton. Then you still need to factor in extra cash for emergencies, such as repairing a leaking roof or basement, or replacing your furnace or air conditioning. For a home priced at $600,000, she recommends emergency savings of $5,000 to $10,000.

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Government programs and tax credits for housing first-time buyers

There are several government programs and tax credits designed to help you get first-time buyers into the housing market.

A Home Buyer’s Plan: Allows you to withdraw up to $35,000 from your RRSPs to make a down payment on your first home. This money can be withdrawn and used without penalty or tax as long as it is repaid to your RRSP within 15 years.

The incentive for the first home buyer: Qualifying first-time buyers can receive an interest-free loan of 5% or 10% of the purchase price of their home, which can be used as a down payment. The government retains its interest in the property, which must be repaid after 25 years or when the home is sold at its fair market value at the time of sale. While the program has benefits, Patton, the mortgage broker, warns that it may limit the maximum purchase price available to new buyers.

Rebate on real estate transfer tax: The provinces of Ontario, British Columbia and Prince Edward Island offer eligible buyers rebates on real estate transfer tax, as does the city of Toronto (the only municipality in Ontario to levy its own real estate transfer tax). The eligibility requirements vary by jurisdiction, as does the amount for which you may be eligible.

This post The complete guide to first-time buyers in Canada’s housing market

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