There are several hidden costs that home buyers in Toronto should be aware of when purchasing a home. These costs can add significantly to the overall cost of the home and should be taken into account when budgeting for a home purchase.
Land Transfer Tax: This tax is a fee that is paid to the government when transferring ownership of a property from one person to another. The tax is based on the value of the property and can be significant, especially for higher-priced homes. In Toronto, Ontario, the land transfer tax is a fee that is paid to the government when transferring ownership of a property from one person to another. The tax is based on the value of the property and is calculated as follows:
- Up to $55,000: 0.5%
- $55,000 to $250,000: 1.0%
- $250,000 to $400,000: 1.5%
- Over $400,000: 2.0%
In addition to the land transfer tax, there is also a municipal land transfer tax that is levied by the City of Toronto. This tax is calculated as follows:
- Up to $55,000: 0.5%
- $55,000 to $400,000: 1.0%
- Over $400,000: 2.0%
There are some exemptions and rebates available for first-time home buyers and certain other circumstances, so it is important to consult with a lawyer or closing agent to determine if you are eligible for any exemptions or rebates.
It’s also worth noting that the land transfer tax and municipal land transfer tax are in addition to any closing costs or other fees that may be incurred when purchasing a home. These costs can add significantly to the overall cost of the home and should be taken into account when budgeting for a home purchase.
- Closing Costs: These are costs that are incurred when completing the sale of a home and include legal fees, title insurance, and other miscellaneous costs. These costs can vary widely, so it’s important to get an estimate from a lawyer or closing agent in advance.
- Home Inspection: A home inspection is a thorough examination of a home to identify any problems or deficiencies that may not be immediately apparent. This can be a significant cost, but it is important to have a home inspection to ensure that you are aware of any issues that may need to be addressed before closing on the home.
- Mortgage Default Insurance: If you are putting down less than 20% of the purchase price as a down payment, you will be required to purchase mortgage default insurance. This insurance protects the lender in the event that you default on your mortgage.
- Moving Costs: Don’t forget to budget for the cost of moving your belongings from your old home to your new one. This can include the cost of hiring a moving company, renting a truck, or paying for storage.
By taking these hidden costs into account, you can better prepare for the full cost of purchasing a home in Toronto.
