Cash to Close

Cash to Close is the total amount a buyer must deliver to their conveyancing lawyer or notary by the completion date so that the transaction can be funded and title can transfer. It encompasses the remaining down payment balance after the deposit already paid, Property Transfer Tax under the BC Property Transfer Tax Act, GST if applicable, legal fees, title insurance premiums, and financial adjustments for items such as prepaid property taxes or strata fees. The conveyancing lawyer or notary prepares a Statement of Adjustments that itemizes every component and provides the precise figure, typically several business days before completion.

The deposit is an initial payment made shortly after offer acceptance — usually held in trust by the listing brokerage in accordance with the Real Estate Services Act (RESA) and BCFSA trust-account rules — and it forms part of the down payment. Cash to Close is the remaining balance owed at completion: it equals the full down payment minus the deposit already held, plus all closing costs such as Property Transfer Tax, legal fees, and adjustments. In other words, the deposit is an advance credit that reduces, but does not eliminate, what the buyer must bring on completion day.

Property Transfer Tax is a provincial tax imposed under the BC Property Transfer Tax Act on every taxable transfer of real property in British Columbia, and it is always a component of Cash to Close. The general rate structure is 1% on the first $200,000 of fair market value, 2% on the portion from $200,001 to $2,000,000, 3% on the portion from $2,000,001 to $3,000,000, and an additional 2% on the residential portion exceeding $3,000,000. Certain exemptions — such as the First-Time Home Buyers' Program (full exemption on eligible properties up to $835,000) and the Newly Built Home Exemption (up to $1,100,000) — can significantly reduce or eliminate this component of Cash to Close for qualifying buyers.

Under the federal Excise Tax Act, GST generally does not apply to the purchase of a used residential property in BC, so for most resale transactions GST will not appear in the Cash to Close calculation. However, GST at the current federal rate does apply to purchases of newly constructed or substantially renovated homes, and buyers of qualifying new homes may be eligible for a partial GST New Housing Rebate that reduces the net amount owing. Buyers should confirm the GST status of any property with their conveyancing lawyer or notary, as an incorrect assumption could significantly alter the Cash to Close figure.

A Statement of Adjustments is the document prepared by the buyer's and seller's conveyancing lawyers or notaries that allocates shared property expenses — such as prepaid property taxes, strata fees under the Strata Property Act (SBC 1998, c. 43), and utility charges — between buyer and seller as of the completion date. Credits and debits flowing from those adjustments directly change the Cash to Close figure; for example, if the seller has prepaid the year's property taxes, the buyer reimburses a proportionate share, increasing Cash to Close. The Statement of Adjustments is typically delivered several business days before completion so that the buyer can arrange the correct bank draft or wire transfer.

When buying a strata lot governed by the Strata Property Act (SBC 1998, c. 43), the buyer's conveyancing lawyer or notary will adjust for any strata fees the seller has prepaid beyond the completion date, and the proportionate amount will appear as a credit to the seller — and therefore an additional cost to the buyer — within Cash to Close. The buyer should also review the Form B Information Certificate and Form F Certificate of Payment (both issued under the Strata Property Act) to confirm no outstanding strata levies or special assessments are owing that could affect the final figures. Any unpaid special levies may become a charge the buyer ultimately bears, further influencing Cash to Close.

In British Columbia, conveyancing lawyers and notaries universally require Cash to Close funds to be delivered by certified bank draft or wire transfer directly to their trust account before or on the completion date, because personal cheques cannot be verified as cleared funds in time. The conveyancing professional holds these funds in trust and releases them to the seller only upon successful registration of the title transfer at the BC Land Title and Survey Authority. Buyers should confirm their financial institution's wire transfer or bank draft processing times well in advance, as delays can put the completion date at risk.

A licensed real estate professional regulated by the BCFSA under the Real Estate Services Act (RESA) can provide a general estimate of closing costs to help a buyer budget, but only the buyer's conveyancing lawyer or notary can calculate and confirm the precise Cash to Close amount through the formal Statement of Adjustments. RESA licensees are prohibited from providing legal advice, and the legal and tax components of Cash to Close — including exact PTT calculations and adjustments — fall within the scope of the conveyancing professional's role. Buyers should engage a lawyer or notary early in the process to obtain an accurate Cash to Close estimate.

Any agreed amendment to the purchase price — whether due to a renegotiation, repair credit, or other agreed adjustment — will flow through to the Statement of Adjustments and change the Cash to Close figure accordingly. A lower purchase price reduces the outstanding balance owed to the seller and may also reduce Property Transfer Tax under the BC Property Transfer Tax Act, while a higher price does the opposite. The conveyancing lawyer or notary will issue a revised Statement of Adjustments reflecting any such changes, and the buyer must ensure their funding arrangements match the updated Cash to Close amount before completion.

Yes — the BC Property Transfer Tax Act imposes an Additional Property Transfer Tax (commonly called the Foreign Buyer Tax) on transfers of residential property in designated areas of British Columbia to foreign entities, which can substantially increase Cash to Close beyond the standard PTT tiers. Buyers should consult the current BC Ministry of Finance guidance or a conveyancing professional for the applicable rate and designated regions, as these rules have been subject to legislative amendment. Canadian citizens and permanent residents are generally exempt from this additional tax, but eligibility must be confirmed based on the buyer's specific circumstances.