2 Things You NEED To Know Before Buying A Home In Toronto
Thinking about buying your first property in Toronto?
Here are 2 things you should know before making that purchase.
The appeal of living in Toronto is no secret. It is the largest city in Canada, the most multicultural city in the world, and home to many global events.
So if you’re a first time buyer thinking about buying your first property in Toronto, there are 2 things you should know before getting your keys.
Cost of Living
First, is the cost of living in Toronto.
According to The toronto real estate board, as of June 2022 the average price of a home was sitting at just over 1.1Mil ($1,152,175) in Toronto. This includes all property types, from condos to detached homes. The average price of a condo in the GTA as of June was about 747k.
Now, this is an average and the exact price will vary depending on location.
As an example, let’s look at the scenario of a young couple buying an 800k condo in the GTA.
A downpayment of 20% on this property would be 160k, with the remaining 640k being covered by the mortgage. Going with a 25 year amortization and a 5 year fixed interest rate of 4.59%, you can expect a monthly mortgage payment of around $3500. Throw in $200/month for home insurance and $420/month for property taxes you’re looking at about $4120/month as an estimated average.
These numbers will fluctuate depending the location and age of your property, mortgage rates, and much more, but this will give you some idea of the cost and what costs to consider. Having a real estate agent, mortgage broker, and real estate lawyer will greatly help you through calculating exactly what you can expect in terms of costs and even help you keep them to a minimum.
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Land Transfer Tax
LTT is paid on every transaction, BUT Toronto has its own LTT. When buying in Toronto you’ll need to pay the provincial LTT and Toronto LTT. If you’re buying elsewhere in the GTA, you’ll only have to pay the provincial LTT.
LTT is a one time, lump sum payment at the time of title transfer, but this Toronto tax makes it effectively double. Using our example from before, the LTT on an 800k condo would be around $16475 after taking into account their first time home buyer rebate.
Toronto home values are generally higher than the rest of the GTA to begin with, so this payment can seem like quite a lot, especially with higher priced properties. However, it is only a one time payment, and if you plan to live in Toronto for quite a while and it provides you with the convenience of being closer to work, school, and your amenities while reducing your transportation costs, this may work to reduce the effect of the large initial LTT payment.
If you have any questions regarding the costs associated with buying a home in Toronto or would like to assemble your team of trusted real estate professionals please give me a call or send an email, we’d love to help.