Buyer Financial Guide
New Brunswick Closing Costs & Property Taxes
Understand property transfer tax, legal fees, closing adjustments, title insurance, property taxes, and the funds you may need before purchasing a home.
01 What closing costs should I expect when buying a home?
In addition to your down payment, it is important to budget for closing costs when purchasing a home. As a general guideline, I recommend setting aside approximately 1.5% to 3% of the purchase price.
Closing costs may include:
- Property Transfer Tax
- Legal fees and disbursements
- Title insurance
- Home inspection
- Property insurance
- Adjustments for property taxes, utilities, or heating fuel
- Moving expenses
The exact amount will vary depending on the property and your specific situation.
Every transaction is unique. A condominium, rural property, or newly constructed home may involve different costs or considerations. I will explain the expected expenses before you make an offer so there are no surprises.
Many buyers save for their down payment but forget about closing costs. Planning for both from the beginning makes the purchase much less stressful.
02 How much is Property Transfer Tax?
In New Brunswick, buyers are required to pay Property Transfer Tax when purchasing real estate.
The tax is calculated as 1% of the greater of the purchase price or the assessed value of the property. It is typically paid through your lawyer at closing.
Property Transfer Tax is often one of the largest one-time expenses buyers encounter on closing day, making it important to include it in your overall budget.
Do not forget to include Property Transfer Tax when estimating your closing costs. It surprises many first-time buyers because it is due at closing.
03 Do I need a real estate lawyer?
Yes.
A real estate lawyer plays an essential role in completing your purchase. They conduct title searches, prepare legal documents, register the property in your name, receive mortgage funds, and coordinate the legal transfer of ownership.
Your lawyer also prepares your Statement of Adjustments and ensures that all funds are distributed correctly on closing day.
Working with an experienced local real estate lawyer helps ensure your transaction proceeds smoothly and remains on schedule.
Choose your lawyer shortly after your offer is accepted. Involving your legal team early can help prevent unnecessary delays.
04 What adjustments are made at closing?
Adjustments ensure that the buyer and seller each pay their fair share of property-related expenses.
These may include:
- Property taxes
- Heating fuel
- Condominium fees
- Water and sewer charges
- Other prepaid expenses
Your lawyer calculates these adjustments before closing and includes them in your final statement.
Every property is different. Rural homes, condominiums, and investment properties may have different adjustments than standard residential homes.
Review your Statement of Adjustments with your lawyer before closing so you understand exactly what you are paying.
05 What is title insurance?
Title insurance protects homeowners against certain legal issues involving ownership of the property.
Coverage may include:
- Title defects
- Survey issues
- Fraud
- Encroachments
- Certain unpaid liens
Title insurance is purchased once during closing and generally remains in effect for as long as you own the property.
Although title issues are uncommon, title insurance provides valuable long-term protection and peace of mind for homeowners.
Title insurance is a relatively small one-time expense that can protect you from significant legal costs in the future.
06 What does my lawyer do during closing?
Your lawyer coordinates the legal side of your purchase by:
- Reviewing legal documents
- Conducting title searches
- Preparing mortgage documentation
- Receiving mortgage funds
- Registering the property
- Paying the seller
- Providing your final legal documents
Your lawyer can also answer legal questions you may have before closing.
Your REALTOR®, mortgage professional, and lawyer work together throughout the transaction to help ensure everything is completed accurately and on time.
Respond quickly to requests from your lawyer. Timely communication can help prevent delays before closing.
07 Can I include closing costs in my mortgage?
In most situations, closing costs must be paid separately and cannot simply be added to your mortgage.
It is important to have funds available for your down payment and closing costs before the closing date.
Your mortgage professional can explain any financing options available based on your individual situation.
Planning ahead for closing costs allows buyers to move forward confidently and reduces the risk of last-minute financial stress.
Ask your mortgage professional for an estimate of your total cash required to close before beginning your home search.
08 How are property taxes calculated in New Brunswick?
Property taxes are calculated using the property’s assessed value and the applicable provincial and municipal tax rates.
The total amount can vary depending on:
- Property location
- Assessment value
- Municipal tax rates
- Whether the property qualifies for owner-occupied tax rates
Property taxes are reviewed annually and may change over time.
Two similar homes in different communities may have different annual property taxes because municipal tax rates vary throughout New Brunswick.
Do not compare homes using only their asking prices. Always consider annual property taxes when determining your monthly housing budget.
09 Why do some homes have lower property taxes?
Property taxes can differ for several reasons, including:
- Municipal tax rates
- Property assessments
- Owner-occupied status
- Property classification
It is common to see neighbouring communities with different tax rates even when home prices are similar.
When comparing homes in Moncton, Dieppe, Riverview, or nearby communities, I will help you understand how property taxes affect your total ownership costs.
A lower purchase price does not always mean a lower monthly cost. Compare both the mortgage payment and annual property taxes.
10 What is the owner-occupied tax credit?
The owner-occupied tax credit is available to qualifying homeowners who occupy their property as their principal residence.
When approved, this credit helps reduce the annual property tax bill compared with a non-owner-occupied property.
If you are purchasing a primary residence, it is important to confirm that the owner-occupied status has been properly updated after closing.
If you are unsure whether the property qualifies, ask your lawyer or contact Service New Brunswick after closing to confirm its status.
11 How can I estimate my annual property taxes?
Property tax information is publicly available for most properties and can usually be reviewed before you purchase a home.
I will also help you understand the current annual property taxes for any property you are considering so you can budget more accurately.
Property taxes should be considered alongside your mortgage payment, insurance, and utilities when evaluating overall affordability.
Never estimate your monthly housing costs using only the mortgage payment. Property taxes can make a noticeable difference in your budget.
12 Are property taxes included in my mortgage?
Sometimes.
Some lenders collect property taxes as part of the monthly mortgage payment and remit them on the homeowner’s behalf. Others require homeowners to pay their property taxes directly to the municipality.
Your mortgage professional will explain which option applies to your mortgage.
Neither option is necessarily better. The right arrangement depends on your lender and your preference for managing monthly expenses.
If you pay property taxes directly, consider setting aside a small amount each month so you are prepared when the bill is due.
13 Can property taxes increase every year?
Yes.
Property taxes may change from year to year because of changes in the property’s assessed value, municipal tax rates, or provincial tax policies.
Not every property experiences the same changes, which is why it is important to review your annual property tax notice each year.
As Greater Moncton continues to grow and develop, property assessments and municipal budgets may change over time, which can affect annual property taxes.
When planning your long-term housing budget, allow for modest increases in property taxes over time. Building that flexibility into your budget helps prevent future surprises.
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