TEN EXPENSES TO PLAN FOR WHEN BUYING A HOME

 

There are a few fees that we tend to overlook when buying a property! Here are ten essential expenses that you shouldn't underestimate.

To have a cozy nest to your liking, build an asset for retirement, be surrounded by two dogs and three cats, there is no lack of reasons for abandoning life as a tenant, and the sprint of July 1 accompanies it. And even if everyone thinks about the down payment that the purchase of a first home requires, there are some costs that we all tend. To forget.

We've rounded up the 10 Essential Expenses you shouldn't underestimate, which amount to 2-3% of the union complex's property value.

01 Inspection, to avoid unpleasant surprises

Before signing the deed of sale for a house or condo, an inspection is required. A building inspection specialist will be able to explain the strengths and weaknesses of the property to you, in addition to identifying the renovations to be planned and the additional costs to come. It is a protection against unpleasant surprises.

02 Evaluation, to pay the right price

The real estate appraiser will be able to give you the market value of the house you want to buy, taking into account the materials used, the year of construction, the location, the maintenance and renovations carried out, etc. The bank may also require an appraisal visit as a condition of the mortgage loan.

Cost: Varies depending on the property and its location. Count between $ 500 and $ 800. Banks normally absorb the cost of valuation when required as a condition of funding.

03 The notary, to complete the purchase

For any real estate transaction, you must use the services of a notary. No lawyer, no house. It's that simple! His role is to protect you throughout the purchase process; he will ensure, among other things, that your title deeds are free from irregularities. The notary is also responsible for preparing many documents, including the deed of sale, the mortgage deed, and the property's registration in the Land Register.

04 The welcome tax, to mark your arrival

Also known as the property transfer tax, the municipality's welcome tax is collected where your new home is located. This is a single payment, which is made following the conclusion of the sale at the notary.

Cost: The welcome tax is calculated according to the price of your property, by value bracket added to each other:

·         0.5% for the first $ 0 to $ 51,700 of the home's value;

·         1% for the portion of $ 51,701 to $ 258,600;

·         1.5% for the slice of $ 258,601 and over.

05 Tax adjustment, to participate in life in your municipality

As a homeowner, you will have to pay your fair share of municipal and school taxes as well as utilities each year. At the time of the sale, the notary will calculate your share for the current year based on the date you purchased your home.

If you go to the notary on July 1, in the middle of the year, you and the seller will each pay half the taxes. If the seller has already paid all taxes for the year, you will have to reimburse him for your share at the notary. This share will be calculated pro-rata for the days of possession of the property and separately for municipal and school taxes.

Cost: Varies depending on the municipality. For a property valued at $ 250,000 located in Montreal, school taxes represent approximately $ 350 and municipal taxes $ 1,750

06 Co-ownership fees for a well-maintained building

Some call them condo fees, other common charges ... These expenses apply only in the context of a co-ownership and allow you to pay the costs related to your building's maintenance. It can, for example, be heating or plumbing, as long as these installations are common.

It should be noted that a recent bill was tabled to modify the rules governing divided co-ownership and thus better protect condo owners. If it is adopted, you can then know from the contingency fund's valuation whether it is large enough to cover future work. You will also know if you should anticipate a hike in your condominium fees to replenish the contingency fund and you will also be able to see the work done in the past and if any are to be expected.

Cost: Varies according to the buildings and the services offered. It is advisable to compare the fees with other buildings in the same area offering similar services.

07 Sales taxes, to boost life

sales tax and the goods and services tax (GST) applies to the sale price if it is a new house or if a business owns the property. However, there are different conditions for an exemption or partial reimbursement, for example, for luxury apartments in Lahore involving the property's value.

08 Mortgage insurance, to protect the borrower and the lender

When buying, if your down payment is less than 20% of your property's value, you will need to take out mortgage default insurance. A possible cost to be avoided with a sufficient down payment.

Cost: Varies depending on your situation, your professional status, your credit report, etc. but also, depending on your down payment. The greater the gap between your loan and your property's value, the greater your mortgage insurance cost. Please note, this link will open a new tab. It will be high.

09 The move, for a successful transition

Cost: Count between $ 500 and $ 1,000 for a moving company and around $ 250 for a truck rental, not to mention pizzas and beer for the friends who will help you out.

10 Related expenses, to feel good at home

It's no secret: who says new home, says renovation and decoration expenses! From buying a mower to buying new curtains, it's almost tempting to say that being at home, for real, is priceless. And this is all the more true when you move away from an urban center and you have to buy a second car and drive a few more kilometers each day.

Despite these unavoidable expenses, some municipalities are trying to promote homeownership access by setting up various subsidies. Families wishing to settle in downtown Montreal can, for example, benefit from the assistance of up to $ 15,000. You can also take advantage of the Home Buyers' Plan, which allows you to withdraw up to $ 35,000 from your RRSP without paying taxes or penalties on the withdrawal. It's a great way to keep a few extra dollars in your bank account.

Bonus! A respite from the repayment of the HBP

If you use the Home Buyers' Plan to buy your property, you don't have to start paying it off right away. Indeed, your repayments will not begin until the second year following your purchase, and the annual amounts payable will be spread evenly over 15 years. In other words, before you have the keys to the house of your dreams, you will have to do some calculations ... but you are now better equipped to do it!