When Buying My First Toronto Condo, What Financial Costs AND Incentives apply to my Purchase?

Published: 07th April 2008
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When Buying My First Toronto Condo, What Financial Costs AND Incentives apply to my Purchase?





First time home buyers are consistently surprised by the "extra" costs involved in buying their first house or condo - usually when the buyer decides not to use a Realtor - or worse, their Realtor or Real Estate Lawyer has not properly informed them of all the costs involved. Your Realtor should inform you of all the possible costs involved in the purchase so that you are not left holding an unexpected load of expenses come closing time. The good news is that in Toronto, first time buyers are also offered a ton of incentives to make it more feasible for them to finally get that beautiful Toronto house or condo of their own.



Incentives:

1) First time Toronto House OR Condo Buyers are entirely EXEMPT from having to pay the new Toronto Land Transfer Tax on any amount below $400,000!

2) First time Toronto House OR Condo Buyers are given a REBATE on the Ontario Land Transfer Tax up to $2000. Ask your MyCondoNewtork.com rep for more info on the details of obtaining this rebate.

3) On a new House or Condo, GST is included in the price, but as a first time buyer you may apply for a REFUND of that GST on any house or condo purchase priced at $450,000 or less.

http://www.cra-arc.gc.ca/tax/individuals/topics/gst-hst-rebate/menu-e.html

4) The RRSP Home Buyer Plan allows each first time purchaser to withdraw up to $20,000 from their RRSP towards the purchase of their first house or condo. But why would you want to do that you ask? The Government is allowing you to take it out tax free. You have to put it back in within 15 years, which is a good idea regardless.



Closing Costs: (other than the actual purchase price):

1) The expert services of your specialized MyCondoNetwork.com Buyer Agent = $0, as buyer agents are paid for you by the seller's/builder's side of things. You are actually likely to SAVE money buy using Buyer Agency services because of the sound expert advice you receive all the way through the buying transaction.

2) Toronto Land Transfer Tax on purchase price amounts over $400,000 (First time buyer TLTT calculation is apx. 1.5% of the amount over 400,000. e.g. $425,000 purchase price = 25,000 x 1.5% = $375 in TLT tax payable.

3) Real Estate Lawyer fees & Disbursements. These usually total anywhere from $1200 to $2000 depending on the nature of the purchase and are usually due on Closing. While this seems like a major cost, it is an essential one as far bigger costs can occur without the expert handling and examination of all documents, transferring of ownership and many other details that make hiring your lawyer a cost you just can't afford to avoid. MyCondoNetwork.com reps have a select few they have used in the past who are always extremely helpful and reasonably priced. Contact us for more info.

4) "Development & Education Levy". This is often payable by the NEW homebuyer on closing. Development charges include things such as the collective cost of various neighbouhood features such as damaged sidewalks, installing new roads or street signs. Education Levy is sometimes imposed to help with the costs of neighbourhood schools, etc. These costs can range from $0 to upwards of $10,000, depending on the project. Be sure to consult with your lawyer to be sure these are "capped" at a specific amount to ensure a builder or the city does not unexpectedly raise it before closing. Another good reason to have a good real estate lawyer! ;)



The closing costs and incentives when buying your first place may not include all of the above and are certainly not limited to these. Your MyCondoNetwork.com buyer agent will help you feel comfortable and knowledgeable, as many peoples' first Condo purchase can be a daunting experience if not well informed. Being in the Network ensures that you are well connected and that your interests are being cared for. See you soon!



MyCondoNetwork.com

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