What are Closing Costs?

By Connie Graham and Briana Hennigan |

Best Mortgage Broker Edmonton

In Alberta, closing costs are generally estimated to be around 1% of the purchase price of a home. This is a significant advantage for homebuyers in Alberta as in other provinces there are also land transfer taxes which can add up to as much as 2-3% of your purchase price.

Understanding Closing Costs

Closing costs encompass various fees associated with finalizing a real estate transaction. In Alberta, these typically include:

  • Legal Fees: Costs for hiring a lawyer or notary to handle the transaction, approximate costs $2000-2500
  • Property Inspection Fees: Optional but recommended inspections to assess the property's condition, approximate cost $500-700
  • Title Insurance: Protects against potential issues with property ownership, Approximate cost $300
  • Property tax Adjustment: You may have to pay back the seller of your property for some portion of the property tax that they have pre-paid. This amount can vary significantly. Please discuss with your lawyer.
  • Utility Connection Fees: Charges for setting up services in your new home: Approximate costs, Varies

Why 1%?

Unlike many other provinces in Canada, Alberta does not impose a land transfer tax, which helps keep closing costs lower. The estimate of 1% is based on typical legal fees and other minor expenses that may arise during the closing process. For instance, if you purchase a home for $400,000, you can expect your closing costs to be approximately $4,000.

Planning Ahead

While 1% is a good baseline, it's wise to budget slightly more to cover any unexpected costs. Consulting with your real estate professional can provide tailored insights into what you might expect based on your specific situation.

If you have any mortgage questions, please contact your ETown Mortgage Team.

BACK