Buyers should keep in mind that beyond the purchase price there are additional costs involved which should be taking into cosideration and funds should be prepared to avoid unpleasant surprises on the closing date.
Resale residentail properties are typically exempt from HST, and unlike in Newly Constrcuted properties this should not be applicable in your purchase.
You should budget for a real estate solicitor who has the time and expertise to walk you through the transaction. Fees vary, but make sure you are aware of the legal disbursments which go beyond the legal fees. Also, your fees will depend on whether you are using a power of attorney and whether you take a mortgage or not. We suggest you budget in and around $2000 for such cost, however we strongly suggest discussing this with your solicitor in advance.
Land Transfer Tax - this is tax you will be paying to the Province of Ontario and to the City of Toronto. There is a progressive formula that will apply based on your purchase price. Nonresidents are typically ineligible for the first time home buyer tax credit, but if you are first time home buyers and qualify for this credit consult with your solicitor for the applicable amount.
Adjustments - Condominiums pay monthly maintenance fees. Sometimes when closing takes place in the middle of the month the seller has already prepaid the month's worth of fees, therefore the buyer should credit the seller for the portion prepaid after closing date. The same practice takes place for property taxes and pre paid or last month's rent and interest on last month's rent if the property is rented. In the case where the property taxes are not known, the solicitors will agree on some hold back amount. and when the tax bill becomes available, the adjustment will take place. Note, adjustmetns will take place on your statement of adjustment and will be added or deducted from the final price.
New Construction Property:
Solicitor and Land Transfer Tax will be the same in RESALE PROPERTY
New construction property has its own unique items such as:
HST Rebate to be paid on closing and then if qualified can file for full rebate (ask us how)
Development Charges based on city of Toronto's fee as agreed with the developer
Education Levies based on city of Toronto's fee as agreed with the developer
TARION Fee for New Home Owner Warranty
Various other fees as per your agreement of purchase
For example, on an average condo that purchased for $415,000 closing costs can be as high as $50,000!!! Out of which we can claim back about $27,000!! in a short time.
Make sure you use an experienced Realtor who can point out the various costs and how you can save substantial amounts
We are always here should you need help with your purchase, HST Rebates and more