Closing Costs

Buying a Home or Condo?

There are several items that need to be attended to prior to closing a Toronto real estate transaction. These include certain items imposed by the government, certain items that lending institutions require, as well as certain items that should be attended to in order to ensure clear title to the home or condo that you buy.

In general, we ask our clients to budget up to 3% to 4% of the purchase price of the Toronto home or condo to cover these various items. While these vary depending on the situation, typical costs include:

Survey

In most cases, the agreement of purchase and sale will have a clause asking for the vendor to provide a survey to the purchaser at their cost within a certain period of time. If the vendor does not provide you with an acceptable survey, you may need to obtain a new survey. Approximate cost: $1000 . In most cases however, the vendor provides the survey.

Title Insurance

Visit : http://www.titleplus.ca/ for more info

A title insurance policy can eliminate the requirement for a new survey. Title insurance is an insured statement of the condition of title or ownership of real property, at the time the policy is issued. Approximate cost: $250-275 (residential).

Land Transfer Tax

The Land Transfer Tax is payable on all purchases. The tax is calculated on the purchase price of a home according to a specific formula
The following chart illustrates Land Transfer Taxes for Ontario.

ONTARIO : Land Transfer Tax

Up to $55,000X .5 % of total property value
From $55,000 to $250,000 X 1 % of total property value
From $250,000 to $400,000 X 1.5 % of total property value
From $400,000 up X 2 % of total property value

See the calculator on my web site - www.spacelifts.ca


CITY OF TORONTO BUYERS ONLY

If you are a buyer within the boundries of City of Toronto , you will be subject to an additional City of Toronto land transfer tax for any real estate purchase. There is however, an exemption for first time buyers buying residential real estate up to a purchase price of $400,000. The additional City of Toronto tax is calculated as follows:
Up to $55,000 X .5 % of total property value
From $55,000 to $400,000 X 1 % of total property value
From $400,000 up X 2 % of total property value

Legal Fees

Legal fees will vary according to the lawyer. Approximate cost: $600 to $800 plus Disbursements.

Disbursements

Disbursements are costs that you lawyer will have to pay on your behalf, such as registration fees, photocopies, etc. Approximate cost: $400 to $600.

Statement of Adjustments

The purchaser and the vendor are each responsible for their share of taxes, fuel, and utilities. These costs will be reflected in the statement of adjustments, which the lawyer puts together. Approximate cost: Varies depending on type of property (condo vs. freehold) and time of year.

Home Insurance

Home insurance premiums will vary from one insurance company to another and according to your insurance needs. In a condominium, the building insurance is included in your maintenance fees and does not form part of the closing costs, unlike a house purchase. Approximate cost: Varies

Mortgage Application

Your lending institutionmay charge a fee for processing your mortgage application. Approximate cost: Varies

Mortgage Appraisal

Approximate cost: $200. This may be waived depending on how you negotiate.

Home Inspection

Prior to buying ahome, you should have a home inspection performed to identify any significant structural, electrical or plumbing problems with the home. Some lending institutions require that you have a home inspection completed before approving financing. Approximate cost: $200 - $450 plus tax.

Status Certificate

Prior to buying a condo, you should request a Status Certificate. This document provides details on the Condo Bylaws, Rules and Regulations, as well as Finances. Any In suite restrictions or common element restrictions are also detailed in the Status Certificate. Most importantly, it includes information on the condo's Reserve Fund, which is the amount the condo corporation has set aside to cover unexpected expenses. The seller usually pays for the Status Certificate. Approximate cost: $100.

CMHC Insurance Premium

This premium is only applicable if you are putting less than 20% of the purchase price as a down payment. Visit http://www.cmhc.ca/ for more information.