A number of costs are associated with buying a property. As a buyer, you are responsible for:
1. Your Legal Fees: real estate fees vary but the actual fee will depend on the purchase price and the particular transaction itself. In addition, HST must be added. Your real estate lawyer will provide you with details.
2. Provincial Land Transfer Tax: a tax imposed on real property typically calculated on the value of the property being registered in the land registration office.
The following formula applies for residential properties:
0.5% on the first $55,000 of the purchase price plus
1.0% on the amount exceeding $55,000 up to and including $250,000 plus
1.5% on the amount exceeding $250,000 up to and including $400,000 plus
2.0% on the amount over $400,000
3. Toronto Land Transfer Tax: In 2008, Toronto City Council approved a new municipal land transfer tax that will be levied on top of the provincial land transfer tax. This Toronto land transfer tax only applies to transactions within the City of Toronto.
The following formula applies for residential properties:
0.5% of the amount of the purchase price up to and including $55,000 plus
1% of the amount of the purchase price between $55,000 and $400,000 plus
2% of the amount of the purchase price above $400,000
Current Benefits to First Time Homebuyers:
First time buyers may be eligible for a rebate at both levels if they are at least 18 years old, occupy the home as a principal residence and have never owned or had any ownership interest in an home anywhere in the world or been married to anyone who has. A home buyer that qualifies can be eligible for a:
- Provincial Rebate up to a maximum of $2000
- City Maximum Rebate to First Time Homebuyers is $3725 (Equivalent to a $400,000 purchase)
|
Purchase Amount
|
Provincial LTT
|
City LTT
|
Total LTT
|
First Time Buyers Pay "Only"
|
|
$250,000
|
$2225
|
$2225
|
$4490
|
$225
|
|
$300,000
|
$2975
|
$2725
|
$5700
|
$975
|
|
$350,000
|
$3725
|
$3225
|
$6950
|
$1725
|
|
$400,000
|
$4475
|
$3725
|
$8200
|
$2475
|
For more information, consult your real estate lawyer.
4. Survey: in the case of a detached, semi, link and/or freehold property, the Seller sometimes has an existing survey and makes it available to the Buyer. For condos, a survey is not needed since condo plan surveys are always on file in the land registry system and are usually too bulky for dealing with copies for processing a sale transaction.
5. Title Insurance: a less expensive alternative to obtaining a new survey which is acceptable to most financial institutions is a product called title insurance which is arranged for by the Buyer's lawyer. This insurance policy insures both the lender and Buyer against any actual losses suffered by the lender or Buyer as a consequence of it being determined at some future date that the house and other structures in existence at the time of purchase are improperly located on the lot.
6. Adjustments: refers to those items requiring apportionment as of the date of closing of the transaction. These include: fuel, insurance, interest on assumed mortgages, rent, taxes/local improvements, and water/utilities.
7. Home Inspection: if an inspection is required, it will cost approximately $300 to $500.
8. Arranging a Mortgage: appraisal and administration fees that may be incurred depending on the lender, although the lender most often pays any related fees.
9. Your Move: the cost will vary based on the moving company and extent of service chosen.
10. Condominium: In the case of a condominium, the buyer may be responsible for the cost of obtaining a Status Certificate from the management company. The cost is $100 inclusive of GST.
