The ultimate guide on buying a home In Toronto
One of everyone’s dreams is to own a home in a thriving environment, whether it be a yurt or a contemporary mansion, and Canada offers that. Within this country is the city of Toronto, the capital of the province of Ontario, and an amazing city that boasts of a vibrant expat culture, which is unsurprising, considering the country’s many attractions. The Great White North, as it is fondly called, is a wonderful place to live, work, and raise a family. Here, you can enjoy the home-away-from-home experience and even harness new business opportunities. It is no surprise that housing demand is on the rise. Both foreigners and locals are rushing to take advantage of open deals. Get important information on buying a home in Toronto.
Are Property Deals in Toronto Available to Foreigners?
The Canadian real estate sector is friendly to everyone, foreigners inclusive. Anyone can own any property of choice in any city here, including Toronto. However, the real estate market for buyers in some provinces come with specific regulations worth noting.
- Foreigners in Canada who do not have a permanent residence but intend to purchase residential property in the Greater Golden Horseshoe region of Toronto would have to pay the Non-Resident Speculation Tax (NRST) – a 15% tax introduced by the Government of Ontario in April 2017.
- Non-residency applies to foreigners who intend to live in Canada for, at most, six months. However, if the intention of stay exceeds six months, such an individual would have to apply for permanent residence.
- For foreigners living outside Canada currently, consulting a lawyer for assistance with the necessary paperwork requested by Canadian banks and realtors would be a step in the right direction.
Why Toronto Canada?
Toronto is one of the world’s most vibrant cities with diverse cultures. It is renowned for a variety of festivals, cultures, cuisines, and weather patterns. It has a low rate of violent crimes, compared to Los Angeles and New York. Other factors make this city a number one choice for both locals and foreigners:
- Toronto is rated North America’s safest city
- It provides a business-friendly environment
- The cost of living is relatively low, compared to other big North American cities
- It scores high on The Economist’s “Liveability Index” for health, education, and stability
- Both locals and foreigners can enjoy Canada’s world-class food safety system
- Access to political rights and freedom
Purchasing a Home as a Non-Resident
For Canadian residents, buying a property in Toronto comes with the following steps:
Get a Realtor
Realtors are responsible for the purchase and sales of properties. If the property owner puts a house up for sale using a realtor, the individual pays the realtor’s fees and that of the buyer, otherwise, the buyer may have to negotiate with the seller on such payments.
Procure a Pre-Qualified Mortgage
When purchasing a home in Toronto, the following guideline comes into play. The housing expenses, including mortgage fees, electricity, and many more, should not surpass 30% of the total monthly revenue. Likewise, the total monthly debt, including mortgage, should not exceed 40% of the gross monthly income.
Find a Property
In Toronto, there are a variety of properties available, including detached homes and apartments. In the real estate industry, budget is one of the most important determinants. Obtaining a mortgage from a foreign bank can be difficult for foreigners. As a result, speaking with a Canadian Mortgage Broker is key.
Having a budget in mind makes real estate shopping easier. Several sites display available homes on sale, including Justo.ca. A realtor can preview selected homes of choice to determine the best fit.
Contact a Real Estate Lawyer
It is worth noting that a real estate lawyer’s role encapsulates conducting a title search, reviewing records, registering deeds, overseeing money transfers, and assisting the buyer in avoiding pitfalls. Hiring one on time can save a lot of stress and drama associated with real estate.
Procuring a Mortgage in Canada
Purchasing a home comes with a 5% minimum down payment. Buyers with a down payment of less than 20% would need mortgage default insurance, procured from a private insurer or the Canadian Mortgage and Housing Corporation (CMHC). The buyer must assure the insurer that the mortgage repayments are serviceable.
For non-residents, a minimum down payment of 35% is required. They have to use a local bank as foreign financial entities cannot register mortgages. Such registrations do not come without series of requests and interviews for tons of paperwork and records.
Sourcing a Mortgage in Toronto
Canadian mortgage brokers and banks provide mortgages, making it easy for anyone to purchase and own a home in Toronto, Canada. With the former, finding the best deal is a walk in the park as they understand the real estate market, in and out. Buyers can access competitive deals. Foreigners should hire mortgage brokers that are inclined to foreign demands for properties.
Real Purchase Price of a Home in Toronto
The real cost of a home in Toronto revolves around the following factors:
- The cost of purchase
- Land or property transfer tax, which varies by province
- Home inspection costs
- Potential bank appraisal fees
- Legal fees
- Home insurance
- Closing fees
- Costs associated with international money transfers
- Harmonized Sales Tax (HST) or Goods and Service Tax (GST) on new-build homes
- Non-Resident Speculation Tax (NRST) – a 15% tax for non-residents/citizens purchasing properties in Ontario’s Greater Golden Horseshoe Region.
Making an Offer on a Home in Toronto
Having found an ideal home in Toronto for a reasonable cost with the help of a realtor, the individual will compile an offer-to-purchase and deliver it to the seller. Entailed in the offer includes:
- The initial deposit
- The offer’s validity time
- The agreed purchase cost
- Any home features or fixtures to be included
- The contractual terms with any mortgage to be taken
- Date by when the transaction must be completed; generally, between 60-90 days
- Other conditions, including household repairs of drainage pipes, windows, or floor panels
Purchasing a home in Toronto, is one of the smartest investments a buyer can make, as it is a prime area with potential returns. Such an individual may have to deposit an amount not exceeding 10% of the property cost. However, this money is refundable should the property sale fall through. The market is already competitive. As such, avoid over bargaining with the seller.
Photo: Warren Wong, Unsplash