The occupancy period starts when your municipality declares the building as “fit for occupancy”. During the occupancy period, builders charge occupancy costs or interim occupancy fees, which are monthly payments to your developer.
Interim occupancy fee consists of three things:
- Interest on Outstanding balance due to builder
- Approximate Property Tax
- Approximate Maintenance Fee
To give you an example:
Imagine you purchase a property from builder for $500,000
Deposit paid to the builder is 20% which is $100,000
Remaining balance due to the builder= $500,000 – $100,000 = $400.000
So, during the interim occupancy you must pay interest to the builder for this remaining balance of $400,000. They normally take the 1-year Mortgage interest rate posted from Bank of Canada, which is currently is 2.75%.
So, $400.000 x 2.75% = $11000/12 = $916.66 monthly which is interest on outstanding balance due to builder.
On top of this you must pay estimated property tax (In recent years Approx. property tax rate for Toronto is 0.614770%, Mississauga .88%, and Brampton 1.03%)
So, in this case of scenario: 400000x0.61%=$2400 a year = $203.33 monthly
On top of that you must pay the condo fees which varies from .50-.62 cents per sq ft, let’s say $200 monthly in this case
Interim Occupancy Fee will be $916.66+$203.33+$200=$1320 monthly until final closing.
Note: Other costs you must pay are utilities and insurance
To know more speak to our expert Vinny Soni @ 647 680 0777