First Time Home and Condominium Buyers Costs in Toronto ON


Buying your first house or condominium can be a confusing as well as exciting experience. As a first time home buyer there are costs which you should be aware of before you sign on the dotted line of the agreement of purchase and sale. However there are also government incentives available to you as a first time home buyer. It is my hope to familiarize you with these costs and incentives on this page. To begin let’s talk about costs of buying.

Do I Have To Pay My Agent A Commission

When you hire your own Buyers Agent this will not cost you one cent. The seller of the home you ever purchase will pay the agents commission. In fact your Buyers Agent will not only cost you any money but will more than likely save you some money if he / she is doing their job properly.

Land Transfer Tax

Land Transfer Tax is a tax set up by the Provincial Government of Ontario and is paid by the buyer in every real estate transaction in Ontario. This would ordinarily be your largest expense in a home purchase, however as a first time home buyer you will be eligible for a rebate of up to $ 2000.00, an amount payable on a purchase price of $ 227,500.00. Any amount above this would be subject to the tax according to the rates as follows:

Up to $ 55,000 X 0.5%

$ 55,000 to $ 250,000 X 1%

$ 250,000 to $ 400,000 X 1.5%

$ 400,000 and up 2%

City of Toronto Land Transfer Tax

This is an additional tax levied by the City of Toronto. As a first time home buyer you are exempt from this tax up to a purchase price of $ 400,000. Above that or as a second time home buyer or more you will be subject to the tax at the following rates:

Up to $ 55,000 X 0.5%

$ 55,000 to $ 250,000 X 1%

$ 250,000 to $ 400,000 X 1.5%

$ 400,000 and up X 2%

This is pure and simple a tax grab and a complete RIP OFF by the City of Toronto. If you are not affected by this tax as a first time home buyer you likely will be when you decide to sell. Your buyer at that time, if they are not first time home buyers will have to pay the tax and where do you think they will get this extra money. They are going to take it directly off the top of your asking price.

The real estate community has bought this tax as an unfair burden to place on buyers but we remain dismissed by City politicians. You as a buyer need to let them know that this is not acceptable. Call your local City councilor or your member of Ontario Provincial Parliament (theyave the city this power to tax) and complain loudly.

Home Inspection

Whether you are buying new or resale you should budget for a home inspector to inspect the property and give you a full written report so that you do not have any big surprise expenses in the first couple of years. A home inspection will cost you between $ 300 and $ 350.

Legal Fees

You will need a lawyer to close the sale and register the deed and mortgage on the closing day. There are many real estate attorneys to choose from and their fees range from $ 1000 to $ 1500. If you do not know any real estate lawyers let me know and I will give you a couple of names to choose from.

Adjustments on Closing Day

The seller of the home you buy may have prepaid the property taxes or in the case of a condo the monthly maintenance fees beyond the date set for closing the sale. If so you will have to reimburse them on a pro rated basis.

Home Insurance

You will need to arrange home insurance on your new home before the closing date and provide proof to your lawyer which he / she will pass along to the Bank or Trust Company providing your mortgage. They will not advance funds necessary to pay off the seller without home insurance.This should be approximately $ 400 to $ 500.

Title Insurance

Sometimes problems or defects with the title to a property can happen and they are forgotten or neglected. Title Insurance insures you against the expense of having to fix these problems after the sale has closed. It will also safeguard against mortgage fraud. It does not cover every situation and your lawyer is the best person to explain these potential circumstances to you. Title Insurance for a typical home is in the area of ​​$ 200 plus taxes.


This is important when you buy a house rather than a condominium. Most agents these days tend to dismiss the absence of a survey by telling you Title Insurance will cover any problems ……… NOT TRUE. Title Insurance does not cover all potential problems. If the seller does not have an existing survey a new one will cost in the region of $ 1000. Sometimes this can be negotiated to be split between the buyer and the seller. If your Buyers Agent is really good he may be able to have the seller absorb the full cost. I have done this in the past.

Moving Expenses

This one is a personal decision as to whether you hire professional movers or rent a truck, get your friends and buy a case of beer and a couple of pizzas.

Source by John Lavin