One thing you may not have considered when it comes to budgeting for your new Bloor West Village real estate are the number of taxes you will have to pay both now and in the future. There are sales taxes, property taxes, and taxes on fees (lawyers' and so on) that will all add to the overall cost of the price you pay for that new home. While many people are aware of some of these taxes, most are not aware of all of them. One which might take you by surprise, particularly if you are new to owning property in Ontario, is the land transfer tax.
The land transfer tax is applied whenever a home built on land owned by the seller is sold. That's an important qualification, because it means that people who buy a condo from the Markham MLS don't have to pay this tax. The reason is because the land title is not transferred from one owner to another, only the unit within the building is transferred. It's a loophole that you can be sure the government will close soon enough, but for now condo ownership means you pay a bit less tax.
For all people buying land, though, the land transfer tax applies not only to the land itself but any and all buildings, partially or fully completed, on the land. It also applies to any fixtures on the land. That's a bit of a hard one to figure out, but it is mainly a legal clause put in so that improvements on luxury houses for sale in Toronto can also be accounted for under the tax. You can't say government isn't thorough when it comes to collecting revenue!
The land transfer tax is rated variably, depending on the price you pay for the property itself. For example, if you are buying a Muskoka cottage for sale for under $55,000, you only have to pay .5% of the property's value as a tax. If you are not an extremely lucky human being, on the other hand, you will likely have to pay 1% if the cost of your home exceeds $55,000 but is less than $250,000. That means you are actually paying two different rates; .5% on the first $55,000 of the home, and then 1% on the remaining amount up to $250,000.
From there, the amount of the tax goes up according to the price of the home for sale in Paris Ontario or any other location in the province. Most of us buying in the province will pay three different rates. The .5% and the 1% on the first $250,000, and then 1.5% on the value over $250,000. The good news is that if you are buying a home for the first time, you are exempt from this tax altogether!
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