For this month’s blog: I thought I would write about something that first time home buyers, generally forget to remember or budget for. Purchasing your first home, is an extremely stressful process and there are items that you might forget or not know to budget for. Buyers typically are focused on saving for their down payment that they forget about the other costs associated with purchasing a home.

Here are four items that I feel are high priority and should be budgeted for when purchasing your home:

1. Lawyer and Contract Fees: Make sure you have a very good lawyer, as we always save the devil is in the details. You need to make sure you know every aspect of your home purchase documented. If you wanted the furniture in the deal, or the seller needs to do repairs, make sure this is all noted. Verbal agreements though are technically legally binding, are much harder to prove, so make sure all items are noted. Typically, budget around $5000.

2. GST & PST: Paying the Sales Taxes might seem like a daily items you contend with when purchasing goods, it may be something that you have forgotten to budget for. As stated, stressful times might make you forget about adding GST & or PST (if applicable) to the purchase of your home. GST is 5% in Alberta, on a $500,000 home this is $25,000.

3. Land Transfer Taxes: In provinces, you are subject to a Land Transfer tax, whenever you are purchasing a home. In Provinces like Ontario, Land transfer taxes are higher than provinces like Alberta. In Toronto on a $500,000 property, you are looking at around $12,200 land transfer taxes ($6475 in Provincial taxes, $5725 in Toronto Land Transfer taxes). In Alberta you would typically pay around $1200.

4. Property Taxes: Property taxes are taxes that all individuals must pay, depending on your developer or home owner, property taxes might have already been paid for the year. The developer therefore will demand payment for the months they have already paid for. For example if you purchase in May, and the developer has already paid for the rest of the year, then you will be required to pay them the months they have already paid.

I hope you will consider these items when purchasing a home, do not forget that the down payment is just the first step in home ownership. There are many items to consider. Please budget accordingly, and make sure you have the funds in place before beginning the process.

I leave you with this; they say in life you have a few key milestones, home owner is one of them, make sure you do the process right and budget correctly.