Expenses With Buying a Home
Fixed closing costs when purchasing a home or condo
Land Transfer Tax is the largest expense when buying a home or condo. It applies to all properties, and it must be paid in cash on closing day, costs are included in the statement of adjustments. It cannot be added to the mortgage financing. Land transfer tax is a broken down calculation, different percent for different values in purchase price. Properties in Toronto are subject to a higher land transfer rate. See link below for tax calculations based on the purchase price value. (Note: Any city outside of Toronto will have only provincial tax, first box, left side. Toronto is subject to double tax, and the total is on the right side box)
First Time Buyers are entitled to a land transfer tax credit, that is applied on closing. It is directly deducted, it is not a rebate after closing. Buyers can only qualify for this rebate if they themselves, and their spouse or common law spouse, or purchasing partner (family member or friend) have never owned a property within Canada or anywhere in the world. The Credit amount is $4,000 off the Provincial tax. This means a full rebate for first-time buyers who purchased a home valued at $368,000 or less. If purchasing in Toronto, an additional $3,725 off the Toronto tax, totaling $7,725. This means a full rebate of Toronto tax for first-time buyers who purchased a home valued at $400,000 or less. See links below for further information.
Closing Lawyer Fees are paid in cash on closing day. Costs are included in the statement of adjustments. Fees vary depending on law firm, location, purchase price, financing or no financing, condo or free hold and other items. A safe estimated cost is approximately $1,400 - $1,800. This is a blanketed cost - covering most legal fees, government fees, title insurance etc.
Rebates to Sellers are paid on closing for any property tax pre-paid by the sellers for the current year, in which closing day falls in between. Condo fees are also rebated back to the seller if purchasing a condo unit. This is calculated per day. These cost are unknown until closer to closing day, but usually range in a few hundred dollars depending on the tax rate, condo fees and how much has been paid in advanced past the closing day. The closing lawyer will outline all these costs prior to closing on the statement of adjustments.
Contingency Funds are highly recommended for all buyers. Unexpected costs are very rare, but can happen. Better to be prepared and set aside additional funds.
NOTE: There are no additional costs that you must prepare for, to pay any real estate fees. The buyer's agent that works for you, is paid by the sellers on closing. The buying agent represents your best interests in the entire process, and will help negotiate on your behalf.
Miscellaneous closing costs when purchasing a home or condo
Home Inspections are an optional cost. The buyer has the option to hire a professional, or have a friend, family member or themselves inspect the property. Hiring a professional is recommended for most property types. Condo town houses and condo high-rise units have many items included in the condo fees, and the condo corp may be responsible for maintenance and repairs of these items. Example: Roof, Exterior walls, Foundation walls, etc. And may not require such a thorough inspection. Cost can vary greatly depending on type of home (condo building, detached house etc), size of home, type of inspection, and inspection company. Average costs for a professional to inspect a home is $400 - $1,000. Average cost to inspect a condo is $300 - $500. *Approximate costs.
Moving Arrangements can vary in cost. It is best to contact a few moving companies for quotes. Options can be as simple and inexpensive as renting a truck yourself, to hiring a company and moving team who handle all the details. Here are a few options for movers and storage. Click Here: Frog Box, Boxes, Storage Centers, Go-Mini, Pods, U-Haul, Budget, Enterprise, Discount, Campbell (recommended for long distance moves). There are many options available. Feel free to inquire about options for different situations, I can help direct you!
Other Optional Cost:
- Setting up utility accounts (internet, Cable etc)
- New furniture purchases
- Disposal of unwanted items and de cluttering
- Renovation and alteration costs
- Painting and decorating