You may have purchased a pre-construction condo and are excited about closing so that you can finally get your keys. Before that happens, you will need to settle all of your closing costs and some of these may come as a surprise to you. These are the main items you should expect to see a bill for:
- Land Transfer Tax
- The City of Toronto has both a municipal and provincial taxes, while Mississauga, Brampton, and Vaughan have only the provincial tax.
- Development Charges
- This is another major bill that could run up to $20K or more and is subject to HST.
- HST (if you are an investor)
- Most developers include HST in their advertised price, which includes the government rebates that they received.
- If you are an investor, you no longer qualify for these rebates that the developer already claimed and thus, you must pay HST at closing.
- Legal Fees
- You will always need a real estate lawyer to deal with any real estate transaction.
- Expect to pay approximately $2,000 plus HST.
- Utilities
- There is a fee or approximately $1,500 to connect gas, hydro, and water to your unit.
- Warranty
- The Tarion Warranty you get with your purchase can cost up to $1000 plus HST.
- Other Fees
- Developer may charge you up to 2 years worth of property taxes as a prepayment.
I hope visibility to these costs better prepares you for closing and if you have not purchased a pre-construction unit yet, do keep them in mind. Remember to always consult a real estate agent before you enter a pre-construction sales centre.