You’ve found your dream home, the seller has accepted your offer, your loan has been approved and you’re eager to move into your new home. But before you get the keys, there’s one more step–the closing.
Closing is the process of passing ownership of property from a seller to a buyer – and it can be bewildering. As a real estate buyer, you will sign what seems like endless piles of documents and will have to present a sizeable cheque including various closing costs. It’s the fees associated with the closing that remain a mystery to many buyers who may simply hand over thousands of dollars without really knowing what they are paying for.
As a responsible and informed buyer, you should be familiar with these costs that are both mortgage-related and government imposed. Although many of the fees may vary by locality, here are some common fees:
When you purchase a property that is registered at the land titles office, a property transfer tax return (PTT), must be filed and property tax paid unless you qualify for an exemption
. A legal professional will typically prepare the transfer tax return for you. This tax is payable to the provincial government by the buyer. The general PTT rate is:
- 1% of the fair market value up to and including $200,000
- 2% of the fair market value greater than $200,000 and up to and including $2,000,000
- 3% of the fair market value greater than $2,000,000
- Properties that are valued over $3,000,000 are subject to another 2% for that amount over this threshold
*** I am not a tax professional – this is general information only. Please consult a tax professional for advice! ***
The conveyancing process is typically facilitated by a lawyer or notary public office. Fees can vary from firm to firm so make sure you find out your fee costs so there are no surprises and you can budget accordingly. Conveyancing can be complicated so trust the legal professionals to ensure a smooth close, but ask questions as you should know what you are paying for. If you need a referral, I would be happy to give you one.