4 Hidden Costs When Buying A Home
Thursday May 30th, 2019Share
What we're talking about some of the hidden costs related to home ownership, and these expenses are costs you may be unaware of. Most purchasers are already familiar with your monthly mortgage and interest payments, but we're going to disclose some of the payments you may be unaware of in relation to moving in and maintaining the home.
These costs are living expenses necessary for the everyday operations of the home. These costs cover electricity, gas, water, waste disposal, lawn maintenance and more now. Because weather conditions alter quite dramatically here in Toronto, your utility bills will accordingly increase or decrease so this can really catch you off guard. I would recommend that before purchasing a home, obtaining a 12 month statement of all utility bills will provide you with sufficient information to understand the associated costs.
Property taxes can increase or decrease each year, but the change is usually negligible. I’ve noticed that some of the properties we've sold this year have property tax bills upwards of $10,000 plus per year. LOOK AT THE PROPERTY TAXES BEFORE BUYING!
Land Transfer Tax
When you purchase a home, you are required to pay a land transfer tax which is somewhere around 3% of the purchase price of the property and this amount of money is due at the time you move into the property. This calculator (below) https://www.ratehub.ca/land-transfer-tax , will calculate your land transfer tax that would be due. In Toronto, a $500,000 home requires a land transfer tax payment about $13,000 and a $1,000,000 home purchase requires a land transfer tax payment of about $33,000. If you're a first time home buyer however, you are eligible for a refund on the land transfer tax which is something you can discuss with me or a representative of your bank.
It may be a good idea to speak to several lawyers as their costs can slightly vary. Beyond that, have $300 or $400 set aside to pay to your lawyer in the event that they need to make any searches relevant to the property or to do any additional due diligence that may be required.