Land Transfer Tax is a significant expense that cannot be overlooked when purchasing a home. Provincial Land Transfer Tax is based on a percentage of the home purchase price. In the City of Toronto, homebuyers must also pay the Municipal Land Transfer Tax in addition to the Provincial Land Transfer Tax.

There are several helpful Land Transfer Tax calculators available online which can be found through your preferred search engine.

For more information on the Provincial Land Transfer Tax calculation, it is recommended that you visit the Ontario Ministry of Finance – Land Transfer Tax website.

For more information on the Toronto Municipal Land Transfer Tax, it is recommended that you visit the following link to the City of Toronto – Land Transfer Tax website.

The Government of Ontario allows for a First-Time Homebuyer Land Transfer Tax refund if the purchaser(s) meet certain requirements. In order to be eligible for the refund of all or part of the tax, the purchaser(s) must meet the following criteria:

• You must be at least 18 years of age
• You must occupy the home as your principal residence within nine months of the date of transfer
• You cannot have ever owned an eligible home, or an interest in an eligible home, anywhere in the world, and
• If you entered into an agreement of purchase and sale before December 14, 2007, the eligible home, must be newly constructed and you must be eligible for the Tarion New Home Warranty.

If there are multiple purchasers, the refund will be reduced proportionately depending on the interest that is being acquired by the non-eligible purchaser.

The maximum allowable First Time Homebuyer Rebate is currently set at $4,000.00.

At Brutto Law, we assist our clients in determining their eligibility for the Ontario First-Time Homebuyer Refund, and will also assist in ensuring that the refund is immediately applied on closing.

For more information on the Ontario First-Time Homebuyer Refund, we recommend that you visit the following link to the Ontario Ministry of Finance – First Time HST Rebate website.

It is very important that you are able to obtain good title to your property. You must protect yourself from any claims to title that a third party may have. For example, a registered lien placed on title by a contractor, mortgagor, tenant, or spouse of the previous owner will make it very difficult to sell your property in the future. It may also cause you to incur financial expenditures in dealing with such an issue.

In Ontario, there are two prevalent ways to assuring good title to your new property: a lawyer’s opinion on title and title insurance.

It is important to note that although it is sometimes not a requirement, almost all financiers require Title Insurance as a condition of receiving mortgage financing. We generally recommend that our clients obtain a title insurance policy even if a lender does not require it. At Brutto Law, we facilitate the process of purchasing and applying for Title Insurance on your purchase.

A title insurance policy is generally more cost-effective than a solicitor’s opinion. In addition, title insurance provides coverage against title or mortgage fraud during the entire time you own the property. If title insurance is obtained, then a current survey is not required, and we are not required to obtain reports for zoning and building compliance or utility arrears. In the case of a condominium, if title insurance is obtained, then an updated status certificate may not be required prior to closing.

If a client is planning to alter the existing use of property some of the off-title searches not required by title insurance may be necessary and you may want to obtain a new survey in addition to obtaining title insurance. Additional searches may be required if the property contains more than one residential unit, or if your lawyer deems it necessary to assess if there are any encroachments, easements, liens, tenancy agreements, or work orders against the property.

At Brutto Law, we are happy to discuss Title Insurance and its various coverage options at length with clients. Our goal is to make sure our clients understand even some of the more complex aspects of their deal.

It is a requirement that your home is insured for fire damage. It is important that insurance is put in place before the closing date. At Brutto Law, we are adamant about reminding our clients of their needs so that closings occur smoothly.

If you are purchasing a condominium, you will likely not require fire insurance as the condominium corporation will be responsible for insuring the entire building. However, at Brutto Law, we recommend that clients make arrangements for contents insurance to protect themselves against any lost or stolen property.

When purchasing home insurance products, it is important to be aware of your deductibles and coverage amounts. At Brutto Law, we recommend contacting your insurance broker to discuss the various options available in order to make an informed and appropriate decision that best suits your needs.

Another cost consideration when purchasing a home is legal fees and disbursements for assisting you in this important process. At Brutto Law, we aim to ensure that our process is transparent by providing you with a detailed cost breakdown in advance of being retained. Our job during a typical purchase transaction will include the following services:

• A thorough review of the Agreement of Purchase and Sale
• If a condominium purchase, a thorough review of Status Certificate, Disclosure Statement, and all related documentation
• Conducting title searches and related searches/activities
• Arranging Title Insurance
• Review and preparation of all closing documents
• Coordination with your bank, mortgage specialist, realtor, and home insurance specialist
• Registration of your Mortgage and related correspondence
• Registration of your Deed and related correspondence
• Coordination of closing funds and payments, including Land Transfer Tax and registration fees
• Contacting City and/or municipality with respect to tax and water account changes
• Client advisory services

When purchasing a new-build condominium in Ontario, it is important to note that the Condominium Act allows a purchaser to have a 10-day Cooling-Off Period which begins immediately upon signing the Agreement of Purchase and Sale. This gives a purchaser 10 days to back out of the deal with no strings attached and with the return of their initial deposit.

It is highly recommended that you retain a lawyer to review the Agreement of Purchase and Sale within the 10-day Cooling-Off Period.

New condominiums have this statutory cooling-off period because there are many additional considerations in a new-build condominium, many of which are outside of the purchaser’s control. It is important for a purchaser to understand the dynamics of dealing with a condominium corporation and the additional by-laws and rules that all condo-owners must abide by. There are also many additional closing costs that a purchaser must be aware of when purchasing a new-build condominium.

Navigating and understanding an often lengthy Agreement of Purchase and Sale can be very difficult for a purchaser. A lawyer will be able to show you what to look for, and may even be able to save you a considerable amount in closing costs by negotiating certain terms of the agreement or by arming you with the knowledge to ask the builders for certain revisions.

At Brutto Law, we charge a flat rate for an Agreement of Purchase and Sale Review, and we often end up saving our clients up to thousands of dollars in closing costs! This not only pays for our review fee but also saves our clients a considerable amount of money.

Condominium development in Toronto and in the Greater Toronto Area is at unprecedented levels. As such, many home buyers are opting to purchase condominium units based on builder’s unit plans, well before construction is complete.

A common procedure with new-build condominiums is a two-stage closing. Most condo builders structure a condominium purchase deal using an Interim Occupancy Closing and a Final Closing.

An Interim Occupancy Closing occurs when the builder has received permission from the municipality allowing for the unit to be safely occupied by a purchaser. However, at this stage, the condominium has not likely been registered which means that the units do not yet have individual Property Identification Numbers, and the title cannot yet be transferred to the purchaser. There will therefore be a period of time where the purchaser may live in the unit but is not yet the registered owner. This period of time is referred to as the Interim Occupancy Period.

During the Interim Occupancy Period, a purchaser is contractually obligated to pay a monthly occupancy fee to the builder which typically comprised of: a) the purchaser’s common expense fee based on the unit’s square footage, b) estimated realty taxes, and c) interest on the deferred portion of the purchase price. The monthly occupancy fee can be roughly equivalent to what your mortgage payment would be, less the principal payment towards the equity portion. The Interim Occupancy Period will vary depending on how long it takes for the condominium to be registered with the municipality.

Every condominium corporation must maintain a document called a Status Certificate. This is a report which provides pertinent information about the status of the condominium corporation which can include financial statements, insurance policy, the size of the reserve fund for repairs and maintenance of the building, a list of any work that needs to be performed to maintain the building, any increases or arrears in common expenses, and even any current or past claims against the condominium corporation. The Status Certificate and its supporting documentation also include the corporation’s bylaws and declaration, and budget.

The information provided in the Status Certificate is extremely important as it will allow your lawyer to assess the likelihood of any impending increases in the common expenses.

Should you choose to contact Brutto Law before your deal goes firm, we will provide you with a free consultation to review your status certificate. This will allow you to make a more informed decision about a potential purchase. It will also allow you to have a discussion with your lawyer about any “deal-breaking” bylaws that are important to you. For example, many home purchasers have pets that may not be allowed by a condominium corporation’s bylaws.

A Reserve Fund is the accumulation of common expenses paid by each unit owner which then becomes pooled into a fund. This fund is used to pay for major projects and repairs that the condominium building may need from time to time. When purchasing a re-sale condominium, it is important to anticipate any major expenses and consider whether the Reserve Fund is large enough to pay for them. If the Reserve Fund is insufficient, this may translate into higher monthly condo fees for unit owners. As discussed in the section above, it is important to review the Status Certificate and condominium disclosure information to make this determination.

A good condominium corporation will conduct routine assessments of the building to ensure that monthly common expense fees are sufficient to maintain the building in a pristine manner. Sometimes it is a good idea for a prospective purchaser to speak with other unit owners about whether they are satisfied with the current practices of the condominium corporation.

As a condominium owner, you will be obligated to pay a monthly maintenance fee. This fee varies depending on the size of your unit and is equivalent to your proportionate share of the building maintenance, management, insurance, and utilities. A portion of these fees is also set aside for the Reserve Fund, as discussed in the section above.

In many cases, your monthly maintenance fees take the place of other expenses you would incur in having to perform the property maintenance yourself. For example, if you lived in a freehold home, you would be responsible for snow removal, grass cutting, all utilities, etc. You may also be paying for a fitness club membership, which could be unnecessary if your condominium building contains a full gym and/or a swimming pool.

One advantage to purchasing a new home from a builder is the Ontario New Home Warranties Plan Act (ONWPA). The ONWPA, which is enforced by an organization called Tarion Warranty Corporation mandates that builders provide a variety of warranty coverages to protect homebuyers.

For more information on the ONWPA and Tarion, we recommend that you visit the following link to the Tarion Warranty Corporation – Homeowners website.

A qualifying purchaser may be eligible for a New Home HST Rebate for the provincial and/or the federal portion of the HST paid on a new home purchase. To find out if you are eligible, we recommend that you visit the following link to the Canada Revenue Agency – GST/HST New Housing Rebate website.

It is important to note that in today’s market, it has become very common for builders to factor the HST Rebate into the purchase price stated on the Agreement of Purchase and Sale. Therefore, the purchase price assumes that the purchaser is eligible for the HST Rebate, and the purchaser is contractually obligated in the Agreement of Purchase and Sale to assign the rebate back to the builder. In these cases, if the purchaser does not qualify for the rebate, the builder will contractually require the purchaser to pay a sum to the builder that is equivalent to the money they would have anticipated receiving as if the purchaser had qualified. There is, however, an application that can be made to the Canada Revenue Agency to recuperate this expense should the purchaser qualify.

This is a consideration that you should discuss with your lawyer, as it could result in thousands of dollars that you may not have anticipated paying on the final closing date. At Brutto Law, this is a point of discussion in our recommended Agreement of Purchase and Sale Review as discussed above when purchasing a new-build condominium.