{"id":9818,"date":"2021-03-04T04:55:44","date_gmt":"2021-03-04T04:55:44","guid":{"rendered":"https:\/\/diamondlaw.ca\/?p=9818"},"modified":"2021-05-13T14:03:17","modified_gmt":"2021-05-13T14:03:17","slug":"taxes-and-fees-to-expect-when-buying-real-estate-in-toronto","status":"publish","type":"post","link":"https:\/\/diamondlaw.ca\/real-estate\/taxes-and-fees-to-expect-when-buying-real-estate-in-toronto\/","title":{"rendered":"Taxes and Fees to Expect When Buying Real Estate in Toronto"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][vc_column_text]<\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">People invest in real estate for various reasons. One of them is that the value often appreciates over time. Long-term gains in Canada\u2019s property market have historically been substantial. But one thing you need to consider is how much <a href=\"https:\/\/diamondlaw.ca\/real-estate\/closing-cost-calculator\/\">taxes and fees<\/a> you can expect to pay.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Long-term gains in Canada\u2019s property market have historically been substantial. This is a bonus for existing <a href=\"https:\/\/diamondlaw.ca\/tag\/homeowners\/\">homeowners<\/a> and those not thinking of selling for a long time.\u00a0<\/span><\/p>\n<p dir=\"ltr\"><a href=\"https:\/\/diamondlaw.ca\/real-estate\/home-buyers-guide\/\"><span style=\"font-weight: 400;\">Buying or investing<\/span><\/a><span style=\"font-weight: 400;\"> in real estate can be a significant milestone for anyone. However, purchasing property isn\u2019t a straightforward transaction. You need to understand the taxes and fees involved when planning on buying <a href=\"https:\/\/diamondlaw.ca\/real-estate\/\">real estate in Toronto<\/a>.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Knowing all the costs involved can help you plan your budget successfully ahead of time.<\/span><\/p>\n<h2 dir=\"ltr\"><b>Harmonized Sales Tax (HST)<\/b><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Whether you\u2019re buying a house or a condo, you are liable for Harmonized Sales Tax or HST.<\/span><\/p>\n<ul>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Harmonized Sales Tax is paid by both businesses and consumers.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">There is a 13% HST levied on most goods and services purchased. This is split with 5% federal tax and 8% provincial tax. (On invoices, it is listed only as 13%.)<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This tax is then paid to the Canada Revenue Agency, a federal government division. They later pay the provincial government their portion.\u00a0<\/span><\/li>\n<\/ul>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Although the resale of a <a href=\"https:\/\/diamondlaw.ca\/real-estate\/residential-closings\/\">residential property<\/a> isn\u2019t liable for HST, tax is associated with other services relating to the transaction, which the buyer and seller both need to pay. These services include moving costs, <\/span><a href=\"https:\/\/diamondlaw.ca\/importance-of-getting-a-home-inspection\/)\"><span style=\"font-weight: 400;\">home inspection fees,<\/span><\/a><span style=\"font-weight: 400;\"> legal fees, and commissions.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">As a seller, you have to pay a 13% tax on the commission and legal fees. As a buyer, you\u2019ll be responsible for tax on the home inspection fee, moving costs, and legal fees.<\/span><\/p>\n<h2 dir=\"ltr\"><b>Land Transfer Taxes (LTT)<\/b><\/h2>\n<p dir=\"ltr\"><a href=\"https:\/\/diamondlaw.ca\/tag\/land-transfer-tax\/\"><span style=\"font-weight: 400;\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/diamondlaw.ca\/wp-content\/uploads\/sites\/8\/2021\/03\/Land-Transfer-Taxes-LTT.jpg\" alt=\"Land Transfer Taxes (LTT)\" width=\"868\" height=\"275\" class=\"size-full wp-image-9821 alignleft\" \/>Land Transfer Taxes (LTT) are payable<\/span><\/a><span style=\"font-weight: 400;\"> by any buyer purchasing a condo or a house. This tax is payable on the closing day of sale. The amount is usually a percentage of the property\u2019s price and the outstanding amount of the mortgage or debt assumed as part of the sales agreement.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">When purchasing a home in Toronto, you\u2019ll also be levied with an additional tax, which in effect is the same amount as the Ontario Land Transfer Tax.\u00a0<\/span><\/p>\n<h2 dir=\"ltr\"><b>Mortgage and Property Insurance<\/b><\/h2>\n<h3 dir=\"ltr\"><b>Mortgage Insurance<\/b><\/h3>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">This is a policy protecting the bank or loan company if the borrower can\u2019t make a payment or dies unexpectedly. It\u2019s also a requirement when the prepayment is less than 20% of the purchase price.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">If you\u2019re the borrower and your deposit was 20% of the total price, your lender might still request mortgage insurance if you are unemployed or have a low credit score.<\/span><\/p>\n<h3 dir=\"ltr\"><b>Property Insurance<\/b><\/h3>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">This insurance includes a few policies, such as homeowners insurance, coverage for flood and earthquake damage, and renter\u2019s insurance.<\/span><\/p>\n<p dir=\"ltr\"><a href=\"https:\/\/diamondlaw.ca\/7-things-insurance-companies-do-not-want-you-to-know\/\"><span style=\"font-weight: 400;\">Property insurance provides<\/span><\/a><span style=\"font-weight: 400;\"> the owner with coverage for property protection and in the case of any liabilities. The owner or tenant will be reimbursed in the case of theft or damage. Compensation could also be awarded to a third party if injured on the premises<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">In <a href=\"https:\/\/diamondlaw.ca\/tag\/ontario-real-estate-lawyers\/\">Ontario<\/a>, the average cost for homeowners insurance is $1,250 per year, whereas tenants pay only $210 per year and condo owners pay about $345 per year. These costs, however, are dependent on variables such as location, size of the property, etc.<\/span><\/p>\n<div dir=\"ltr\" align=\"left\">\n<table>\n<colgroup>\n<col \/>\n<col \/><\/colgroup>\n<tbody>\n<tr>\n<td colspan=\"2\">\n<p dir=\"ltr\" style=\"text-align: center;\"><b>More Helpful Info on Real Estate<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Tips for First Time Home-Buyers\u00a0<\/span><\/p>\n<\/td>\n<td>\n<ul>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Save towards your down payment. The bigger it is, the less your mortgage will be.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Get a pre-approved mortgage from a broker.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Don\u2019t settle for the first house you see. Shop around.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Canada has a few rebates available for first-time buyers; ask about them.<\/span><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Benefits of Investing in Real Estate\u00a0<\/span><\/p>\n<\/td>\n<td>\n<ul>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It appreciates over time.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">There are some tax benefits available.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">There\u2019s a continuous cash flow.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You\u2019re able to use leverage to acquire more property.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It allows you to grow your equity.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You have more control over your investment.<\/span><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Questions to Ask When Hiring a Real Estate Lawyer<\/span><\/p>\n<\/td>\n<td>\n<ul>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Do you specialize in real estate?<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Do you have experience in real estate investments?<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Will you be available when I need you?<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">What are your fees?<\/span><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<h4 dir=\"ltr\"><i><span style=\"font-weight: 400;\">Handling a real estate transaction on your own can be risky, as there are many taxes and fees that you need to be aware of before you start. Consult an experienced real estate lawyer in Toronto &#8212; call Diamond and Diamond Law at 1-888-INFO LAW or 1-888-463-6529!<\/span><\/i><\/h4>\n<div dir=\"ltr\" align=\"left\">\n\t\n\t\t\t<section class=\"h-protip-sec\">\n\t\t\t\t<div class=\"container\">\n\t\t\t\t\t<div class=\"row\">\n\t\t\t\t\t\t<div class=\"col-md-2\">\n\t\t\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"63\" height=\"64\" src=\"https:\/\/diamondlaw.ca\/wp-content\/uploads\/sites\/8\/2021\/02\/Screenshot_1-1.png\" class=\"attachment-post-thumbnail size-post-thumbnail wp-post-image\" alt=\"pro tip icon\" sizes=\"auto, (max-width: 34.9rem) calc(100vw - 2rem), (max-width: 53rem) calc(8 * (100vw \/ 12)), (min-width: 53rem) calc(6 * (100vw \/ 12)), 100vw\" \/>\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"col-md-10\">\n\t\t\t\t\t\t\t<h3>PRO Tip <\/h3>\n\t\t\t\t\t\t\t<p><p><span style=\"font-weight: 400;\">\u201cGetting a home inspection can be a wise idea if you\u2019re planning to buy a house in Toronto. An inspection can give you <\/span><span style=\"font-weight: 400;\">information about a home\u2019s condition so you can make better-informed decisions and help the seller determine the value of the home.\u201d &#8211; Company Owner.<\/span><\/p>\n<\/p>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t<\/section>\n\t\t\n<\/div>\n<p>[\/vc_column_text][vc_column_text]<\/p>\n<h2 dir=\"ltr\"><b>Other Expenses and Closing Costs<\/b><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/diamondlaw.ca\/wp-content\/uploads\/sites\/8\/2021\/03\/Other-Expenses-and-Closing-Costs.jpg\" alt=\"Other Expenses and Closing Costs\" width=\"868\" height=\"275\" class=\"size-full wp-image-9822 alignleft\" \/>When closing a property sale, there are expenses that both the buyer and seller need to pay besides the actual price. The closing costs and other fees applicable in Toronto are:<\/span><\/p>\n<ul>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><b>Balance of Purchase Price<\/b><span style=\"font-weight: 400;\"> &#8211; This is the purchase price you\u2019ve agreed on, less the deposit.\u00a0<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><b>Legal Fees<\/b><span style=\"font-weight: 400;\"> &#8211; These will vary based on the selling price.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><b>Title Insurance<\/b><span style=\"font-weight: 400;\"> &#8211; Usually part of your legal fees and range from $250 to $400.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><b>Mortgage Broker Commission<\/b><span style=\"font-weight: 400;\"> &#8211; The lender is usually liable for this.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><b>Property Survey<\/b><span style=\"font-weight: 400;\"> &#8211; Not always required; if so, it could be between $1,000 and $2,000.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><b>Ontario Land Transfer Tax<\/b><span style=\"font-weight: 400;\"> &#8211; This is dependent on the purchase price.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><b>Toronto Land Transfer Tax<\/b><span style=\"font-weight: 400;\"> &#8211; Also reliant on the selling price.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><b>Property Tax Adjustment <\/b><span style=\"font-weight: 400;\">&#8211;\u00a0 To be reimbursed to the seller if they paid it after the closing date.\u00a0<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><b>Tarion Warranty Fees<\/b><span style=\"font-weight: 400;\"> &#8211; This is a warranty on new homes.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><b>Provincial Sales Tax<\/b><span style=\"font-weight: 400;\"> &#8211; This amount will vary.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><b>Adjustments for Utilities\/Condo fees\/etc.<\/b><span style=\"font-weight: 400;\"> &#8211; If the seller paid any utilities after the closing date, the buyer has to refund them.<\/span><\/li>\n<\/ul>\n<h2 dir=\"ltr\"><b>Contact Real Estate Lawyers from Diamond and Diamond<\/b><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">To have someone assist you when buying or selling a property in Toronto is a huge benefit. You\u2019ll need people who are knowledgeable and have your best interests at heart. Look no further than the proactive <\/span><a href=\"https:\/\/diamondlaw.ca\/real-estate\/\"><span style=\"font-weight: 400;\">real estate lawyers<\/span><\/a><span style=\"font-weight: 400;\"> from Diamond and Diamond.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">We have a dedicated team focussing on real estate who will keep you informed as your transaction unfolds. Call Diamond and Diamond at 1-888-463-6529 and schedule an appointment with a Toronto real estate lawyer today!<\/span><\/p>\n<h2 dir=\"ltr\"><b>Taxes and Fees to Expect When Buying Real Estate in Toronto FAQs<\/b><\/h2>\n<p>[\/vc_column_text][vc_toggle title=&#8221;Can I buy a house in Toronto without home insurance?&#8221; style=&#8221;round&#8221; color=&#8221;blue&#8221; el_id=&#8221;1610080524707-d830ee54-dfbd&#8221;]<\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">It\u2019s not unlawful to have no home insurance, but it isn\u2019t wise to go without it. You need to be prepared in the event of theft, fire, or other disasters. Also, some lenders might not grant you a mortgage without insurance.<\/span><\/p>\n<p>[\/vc_toggle][vc_toggle title=&#8221;Can I buy a house in Canada as a non-resident?&#8221; style=&#8221;round&#8221; color=&#8221;blue&#8221; el_id=&#8221;1610080546599-e1ba23d2-5ca0&#8243;]<span style=\"font-weight: 400;\">There are no restrictions in certain provinces, while others might restrict purchasing land belonging to the British Crown.<\/span>[\/vc_toggle][vc_toggle title=&#8221;Do I need a lawyer to buy a house in Ontario?&#8221; style=&#8221;round&#8221; color=&#8221;blue&#8221; el_id=&#8221;1610080574612-96286418-5cfa&#8221;]<\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">It\u2019s advisable to consult a lawyer to assist with the contracts and negotiate on your behalf. They can also do a title search and file real estate deeds faster and with more accuracy.<\/span><\/p>\n<p>[\/vc_toggle][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][vc_column_text] People invest in real estate for various reasons. One of them is that the value often appreciates over time. Long-term gains in Canada\u2019s property market have historically been substantial. But one thing you need to consider is how much taxes and fees you can expect to pay. Long-term gains in Canada\u2019s property market have&hellip;<\/p>\n","protected":false},"author":1,"featured_media":9820,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"ngg_post_thumbnail":0,"footnotes":""},"categories":[812],"tags":[],"class_list":["post-9818","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal-needs","entry"],"_links":{"self":[{"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/posts\/9818","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/comments?post=9818"}],"version-history":[{"count":0,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/posts\/9818\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/media\/9820"}],"wp:attachment":[{"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/media?parent=9818"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/categories?post=9818"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/tags?post=9818"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}