Planning to purchase a Toronto home or condo can be an exciting time. However, it is important to be aware of the closing costs you will be required to pay for in addition to the sale price of the property. CMHC (Canada Mortgage and Housing Corporation) suggests that buyers have at least 1.5% of the purchase price to cover the closing costs. However, it is usually best to play it safe and ensure that you have a little more than this available. Below is a breakdown of common closing costs that you can expect. In order to get a more accurate idea as to the closing costs for the type of property that you are considering, it is best to contact your real estate lawyer. If you do not currently have a real estate lawyer, I would be happy to put you in contact with several real estate lawyers that you can speak to in order to obtain more information.
Common Closing Costs To Expect:
Once you have found the right property and you have made your offer with your conditions, you can expect to pay the following closing costs.
Appraisal Fee: In some cases, your lender may want to have an appraisal completed for the property that you wish to purchase. This fee typically ranges between $100 – $200 but can cost more for unique properties such as large custom homes or estates.
Deposit: This is typically 5% of the purchase price. The deposit is due within 24 hours of your offer being accepted by the seller.
Home Inspection: $400 – $1000 depending on the size of the property, the home inspection company and how in-depth the inspection is.
Fire Insurance: All lenders will require you to have fire insurance in place before you take possession of the property. The cost can be anywhere between $200 – $600 depending on the property.
Title Insurance or Property Survey: Most lenders will require either a survey of the property or Title Insurance. If no survey exists, the cost for a new one can range anywhere between $600 – $900. A more cost effective option is to get Title Insurance which can cost around $200.
Legal Costs: Your real estate lawyer will complete several tasks and searches. In addition, there will be disbursements such as supplies, additional searches, etc. Each real estate lawyer will charge different fees but it is safe to expect to pay anywhere between $1,200 – $2,000 depending on what is involved and who your lawyer is. If you do not have a real estate lawyer, it is best to interview at least three in order to determine exactly what it will cost you for the specific property you are interested in. If you do not have a real estate lawyer, I would be happy to put you in contact with several real estate lawyers that you can speak to.
Land Transfer Tax: If you are purchasing property in the City of Toronto, you will be required to pay both provincial and municipal land transfer tax. Both taxes are due each time you purchase a property in Toronto. Click here to calculate how much land transfer tax you can expect to pay based on your budget or purchase price.
Mortgage Application & Processing Fee: Any mortgage that is more than 80% of the purchase price is considered a high-ratio mortgage. CMHC (Canada Mortgage and Housing Corporation) charges a fee of approximately $160 – $190 for the application fee and application processing.
Adjustments: All bills related to items such as property taxes, utilities and other costs are the buyer’s responsibility. If your closing takes place in the middle of the month, the seller would be responsible for the costs associated with the first half of the month and the buyer is responsible for the remainder. Your real estate lawyer will be able to assist you with determining the exact amount you should expect.
HST: HST is only due on newly constructed homes and condos when purchased directly from the builder. You do not pay HST as a buyer when purchasing a property that has been previously owned by someone other than the builder.
Contact me for more information about the closing costs you can expect or to learn how I can assist you with your specific real estate needs.