With Real Estate prices soaring high, home buyers are concerned how much money they need to have to cover their closing cost. In this crazy bidding war, home buyer is putting more money into buying real estate and often forget about money required to close the property which is significant amount. In this article we’ll try to simply for you to calculate closing costs.
Major cost contributors towards closing cost are:
- Land Transfer Tax
- Title Insurance Fee
- Lawyer Legal Fee
Below is the breakdown Land Transfer Tax in Ontario:
First $55,000 – 0.5%
$55,000.01 to $250,000.00 – 1%
$250,000.01 to $400,000.00 – 1.5%
$400,000.01 to $2,000,000.00 – 2%
Over $2,000,000 – 2.5%
Note: Homebuyers in Toronto, also incur an additional municipal tax on top of above land transfer tax.
First-time homebuyers qualify for additional rebate which is tax refund is equal to the full value of the land transfer tax up to a maximum of $4,000
Check government site to know more about rebates: https://www.fin.gov.on.ca/en/tax/ltt/
Lawyer Fee: Your lawyer will do all the backend work until you get your keys. Lawyers conduct a title search, get title insurance in place, register the home in your name, create statement of adjustments, facilitate the financial transactions on closing day and FINALLY arrange keys for you.
Title Insurance: Title insurance is an added closing cost on virtually all purchases and refinances. It is not a huge cost but certainly have great value, for a one-time premium of a few hundred dollars, the level of protection title insurance provides is extremely valuable. The buyer is covered for several property risks, including title fraud, lack of compliance with building permits etc.
I always recommend my clients to speak to their lawyer to get high level estimate on their closing cost.
To know more speak to our expert Vinny Soni @ 647 680 0777