Land Transfer Tax

When you buy land, or an interest in land then that purchase is liable for Land Transfer Tax.  The amount owing is dependent on the value of the property and for most purchases  (ie. land with a single family dwelling on it) is calculated according to:

0.5% on the first $55,000

1% from $55,000-250,000

1.5% from $250,000-$400,000

2% above $400,000.

So if the home you buy is priced at $450,000

The land transfer tax will be: $275+1950+2250+1000 = $5475*

If you are purchasing a home in Toronto then there is an additional Toronto Land Transfer Tax.  The rates for this tax, for a single family home, are calculated according to:

0.5% on the first $55,000

1% from $55,000-400,000

2% over $400,000

The Municipal Land Transfer Tax on the $450,000 single family home example would be:

$275+3450+1000 = $4725*

First Time home buyers are eligible for a rebate against both the Provincial and Municipal Land Transfer Tax, provided they meet the following criteria:

  • The purchaser is at least 18 years of age.
  • The purchaser must occupy the home as his/her principal residence no later than nine months after the date of the conveyance or disposition.
  • The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.
  • If the purchaser has a spouse, the spouse cannot have owned a home, nor had any ownership interest in a home, anywhere in the world while he/she was the purchaser’s spouse. If this is not the case, no rebate is available to either spouse.

The limit of the rebate for the Provincial Land Transfer Tax is $2000, and for the Municipal one it’s $3725.

The rebate can be claimed at the time of registering the sale and transferring title – ask your lawyer about this.  If you didn’t claim your rebate on closing and are eligible then details of how to claim along with more information on Land Transfer Tax can be found here.

Provincial Land Transfer Tax

Municipal Land Transfer Tax

Other municipalities are considering following Toronto’s example and introducing their own Municipal Land Transfer Tax as a means of increasing revenue.

*These examples are for purchases of single family homes, calculations may be different for other types of property.



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Oakville Real Estate – 2015 First Quarter Report

The first quarter of 2015 has followed on from 2014 with a strong Seller’s market in Oakville. Lack of inventory continues to drive prices up, with the average price of properties sold this quarter being $839,094, up 6.25% on the same quarter last year, median price is $727,000 which is an increase of 8.11% on last year’s figures.  A further indication of the strength of the Seller’s market is the number of properties that have sold above list price, a sure sign of multiple bids. Of the close to 600 units sold in Oakville via the Oakville and Milton Real Estate Board, approximately 24% of them reported a sale price greater than asking.

The most expensive home sold in the quarter is a 4 bedroom, 6 bath custom property located on a 130×150 foot lot in Old Oakville which sold at $4.3mi.   At the other end of the scale is a 3 bedroom, 2-storey condo apartment for $187k.  Older freehold homes, in need of some renovation can still be picked up for around the  $400-425k mark, but with only  21 freeholds selling for less than $470k, in the whole quarter, the options are limited.

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Multiple Offers

Multiple offers have long been a reality in the Toronto real estate market, with sellers holding offers until a certain day in an attempt to create a bidding war.  Over the past 12-18 months this situation has started to become more common in other markets, with properties in Oakville selling last spring at tens of thousands over list price due to multiple offers.

So if you have seen a home that you want to purchase and find yourself in a multiple bid situation, how should you handle it?

The answer to that question is very dependent on how risk averse you are.  The unfortunate reality of multiple bid situations is that an offer with no conditions is more likely to be accepted over one with conditions (even if the offer price is less).  This is leading to buyers removing all conditions in a desperate attempt to beat out the competition.  There are huge risks associated with this approach.

The risks associated with removing the home inspection condition are fairly obvious. It is possible to complete an inspection prior to offer date, or sometimes the seller already has an inspection ready for potential buyers to view. If the latter is the case, then make sure that the company who have completed the inspection are a well known, reputable company, not the Sellers brother in law!  The risk with the first approach is that, if you are unlucky in the bidding, then the money spent on the inspection is wasted. Repeat this a few times and you could pay out for a lot of inspections before you finally succeed in purchasing a house. Sometimes leaving the condition in, but shortening the time in which you have to meet the condition can be successful, particularly if the rest of your offer is strong.

Probably the most common condition in offers to purchase is the financing condition.  Buyers often feel that as they are pre-approved for more than their offer amount then they will be sure to get their mortgage on this property and are safe to remove the financing condition.  Not so, the pre-approval is an assurance that, given your income and debt load then the financial institution will be prepared to lend you up to a certain amount, but it is no assurance that they will lend that amount on the property you are offering for.  The lender needs to approve the property that their money is being spent on, not just the borrower.  It is this process that the financing condition covers.

If you do not have the financing condition, and then pay way over the asking price then there is a definite possibility that the lender will refuse the loan based on appraisal value of the property. If that happens, and you cannot find another lender prepared to advance you the cash then the deal will not close and you are in big trouble.  This situation is not helpful for either the buyer or the seller, and is something that listing agents should be advising their clients about before they accept an offer at massively over the list price with no financing condition.  This situation can be mitigated if the buyer has a large down payment, as the risk to the lender is reduced.

So, if you are planning on taking out your financing condition, then speak to your lender about the property before you put in the offer. I have had clients who have managed to obtain a lenders agreement for a loan up to a set amount for a specific property before the offer was prepared.

Having decided what you are going do about your conditions, you then have to decide how much to offer. You want to beat the competition but not overpay for the house. Its a tough call, the other offers are invisible to you, although the listing agent has to inform all interested parties of the number of offers they have received, they cannot reveal the details.  This is the part where you need to park your emotions.  Have a good hard look at the recent sales and decide on a price that you think would be a fair price for this home.  Then decide how much above this fair price you would be prepared to go to, and that is your offer price.

Ideally it should be a price where, if you miss out by even a small amount, you are OK with it because you really would not have paid more. AND the price where, if you get it, you don’t lose sleep for the next year worrying that you paid too much.

If you can’t find a price that is true for these two statements (particularly the second one) then you are in a no win situation and it may be better to save yourself the stress of putting in the offer and move on to the next house.


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hockey photo

Here is my second post on the subject of sporting activities available for children in the Oakville, Burlington and Milton areas.  All three towns offer both house league and rep options.  To explain briefly, the house league system allows every child to play at a level with other players with similar skills. All you need to do to play is register with the organisation before all the spots are taken.  Depending on the age group, Oakville offers up to three levels of house league ranging from kids that can barely skate up to players that can put together a very entertaining game, with teams that can compete at the lower rep level. Burlington and Milton have one league per age group.

The rep teams are travel teams and players need to try out for a spot, and it can be very competitive and disappointing for those that don’t make a team.  Oakville and Burlington each have a full rep programme (the Oakville Rangers and the Burlington Eagles) with teams at AAA (top level), AA, A and AE. Milton (Milton Winterhawks) offers teams at the AA, A and AE level, with AAA caliber players joining with players from Georgetown and Orangeville to form Halton Hurricanes. Burlington has a second rep organisation (Burlington Bulldogs) that ices one team per age group at either the A or AA level.

Rep level hockey can be a huge commitment in terms of time and money. The teams practice several times a week, combined with a home and away game most weeks. Add in up to five tournaments a season with hotel and meal bills etc. plus time off work and school as most run Friday – Sunday then it adds up very quickly.  It can be a lot of fun though and is a great way to meet other people.

Links to the associations are give below:

Minor Oaks Hockey Association (MOHA) – Oakville House League and Oakville Rangers

Burlington Lions Optimist Minor Hockey Association (BLOMHA) – Burlington House League and Bulldogs

Burlington Eagles

Milton Winterhawks

Although girls can (and do) play in these leagues, there are also dedicated girls leagues available in each of the three areas.  Both house league and rep options are offered to girls through the Oakville Hornets, Burlington Barracudas and North Halton Girls Hockey Association.

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What to look for when viewing a home.

Top Ten Tips.

  1. Take a quick look at the roofs of other houses as you approach the house you are viewing. A typical asphalt shingle roof needs reshingling every 15 years or so. Are the shingles curling or missing? Note especially the south and west sides.
  2. Is the property neat and tidy? Maintenance is key to keeping your house in good condition over the long haul.
  3. If you poured a bucket of water on the ground, where would it flow? Water should drain away from the house.
  4. Look at any painted surfaces. Are they peeling and exposed or smooth? Good paint jobs done regularly will protect wood from the elements.
  5. Look at any brickwork – especially around the top of the chimney and at ground level. Salt stains (efflorescence) and broken bricks (spalling) often mean moisture. While not always a problem, further investigation may be called for.
  6. Take a quick peek at the air conditioner – level? Clean? Air conditioners last for about 12-15 years if properly maintained. Significantly less if they aren’t.
  7. As you go into the basement, take a good smell. A wet, damp basement has a distinct odour – and it is usually not nice.
  8. Cracks in the floor are usually cosmetic as are most wall cracks. If the parts on either side of the crack don’t line up with each other there is a cause for concern. Likewise if there is a pool of water anywhere in the basement. Look for water stains around the cracks.
  9. Old furnaces are big. Really old furnaces are even bigger and the duct work is big. Modern furnaces are much smaller and usually have a condensate line coming out of the side of the cabinet. Note that this is separate from the A/C condensate line, which comes out the side of the duct directly above the furnace cabinet.
  10. A quick look at the electrical panel – don’t touch it! It should be easy to get at, the wires should be secured within the first couple of inches and there should be no water sources nearby.

Thanks to Tom Lesnick from Tom Lesnick Home Inspections for the information.

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Renting while saving downpayment to buy?

There are many reasons to rent. If you are renting because you are new to an area and want to check out the different neighbourhoods before purchasing your home, or perhaps you are in a job that has a short contract and then will be moving elsewhere, or even a retiree who has downsized and wants to use their capital for other things, then this information is probably not for you. However, if you are renting because you don’t have 5% to put as a downpayment on a purchase then read on.

Did you know that there are mortgage products out there that allow you to buy even without a downpayment*.  The lender advances you an additional 5% as a downpayment and then takes it back by charging a slightly higher interest rate over the first five years of the mortgage term.  Examples, based on current interest rates, show that for a home costing $300,000, a 5% deposit would be $15000, the difference in interest paid back over 5 years between the standard rate and the elevated rate with this product is $15,360. The $15,000 is the downpayment which you are just paying back and so the actual additional cost of taking this product is $360 over five years.  For a $400,000 home the cost is $520.

So if you have had enough of renting and watching the property prices increase every year you wait, then this may be the product for you.  Call or email for more information  or to schedule an appointment to start checking out available properties right now.

Thanks to Chris Maxwell-Smith from Meridian Credit Union for the example data.

*Conditions Apply

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Roller Hockey

I get a lot of my ideas for posts from chat sites and forums, particularly ones for people looking to immigrate to Canada.  One frequently asked question is about sporting opportunities for children.  So I thought I would do a series of posts on some of the available sporting activities in the Oakville area.

I am going to start with my own personal favourite – Roller Hockey. This game can be played pretty much anywhere, but competitive games are played on a standard rink with ice removed and roller hockey flooring applied. The game is played 4 on 4 (plus goalie), there is no icing and no offsides so its great for perfecting passing techniques to quickly move the puck from the defensive to offensive zones.

There are options to play, whatever your skill level.  There are a limited number of travel teams who compete throughout Canada and US. The NARCH (North American Roller Hockey Championships) hold a number of qualifying events throughout the States and Canada and then the finals are held in places like San Jose, California and Fort Myers, Florida, so opportunities for combining with family vacations.  For players who don’t want to commit to that level of play, there are local leagues that cater for all abilities from beginners through to top level players.

And the absolutely best thing about Roller – the rinks are warm!


Roller Hockey is non checking, but most definitely not non contact.

Here we have the First Star Hockey Ducks showing our neighbours to the south how the game should be played.

Here we have the First Star Hockey Ducks showing our neighbours to the south how the game should be played.

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Downpayment for a Mortgage

A question I am regularly asked is “How much money do I need to put down?” This article from the Globe and Mail does a great job explaining the issues and the options available to potential home buyers with limited cash.

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Title Insurance

Title insurance is usually an afterthought for people getting a mortgage. But it’s becoming more of a decision point since so many lenders now require it.

The purpose of title insurance is to protect you if there’s a problem with your title. Those problems can turn into expensive nightmares in the small chance that you encounter them. Examples include ownership disputes on your property, title fraud, un-discharged liens, encroachments, zoning issues, survey problems, property tax arrears and so on.

Real estate lawyer Bob Aaron wrote a recent overview of title insurance here. He says, “Most real estate lawyers today regard title insurance as a critical component…and will usually not close a purchase without it.”

And no, lawyers don’t get big kickbacks for pushing title insurance. Aarons says lawyers “are not permitted to get referral fees/commissions” on title insurance. Lawyers recommend it because it protects the homeowner, limits the lawyer’s liability and makes closing more efficient.

There are two broad types of title insurance:

  1. Homeowner policies, which:
    • Cover the homeowner
    • Last as long as you own the property
    • Are priced based on the property value
  2. Lender policies, which:
    • Protect the lender’s interest in your mortgage
    • Last as long as you have your mortgage
    • Are priced based on the mortgage size

The cost of title insurance varies widely depending on the location, type and value of the transaction. It starts at roughly $150-$350, but can climb from there. Here’s a calculator to estimate policy cost from FCT (First Canadian Title), Canada’s top provider of title insurance.

Once you pay for title insurance, you can often avoid paying for it again. Here are some cases where that’s true:

  • You purchase a homeowner policy and stay in your home (Homeowner policies generally cover your property for as long as you own it.)
  • You pick a lender that doesn’t require a lender title policy (Many do, but some don’t.)
  • You refinance and choose a lender that pays for its own mortgage-only title policy (A broker can tell you which lenders do this. Keep in mind, a lender-only policy doesn’t protect you.)
  • You switch lenders and your existing policy is “ported” to the new lender (If it can’t be ported, many lenders will pay the new title insurance premium for you on a straightforward switch.)

Title insurance can be switched to a new lender only under certain conditions, says Reta Coburn, president of FNF Canada, the Canadian division of the world’s largest title insurance organization. “Loan policies for lenders are transferable when the original mortgage is not being discharged from title and is simply being transferred by way of a registered assignment of mortgage,” she says.

The stipulations are that, “The original mortgage security must remain unchanged and no additional funds can be advanced, unless provided for under the original mortgage terms and conditions. The date of policy is the date of registration of the original mortgage, so the new lender assumes the coverage under the policy of the original lender at the date of that mortgage registration.”

Two related notes:

  • The loan-to-value cannot increase if a title policy is being transferred to a new lender.
  • Lenders don’t usually accept assignments of collateral charges, so for practical purposes a title policy on a collateral charge mortgage isn’t generally transferrable.

Eric Haslett, LLB, VP Residential Title Insurance at FCT, adds that: “Provided the new lender agrees to take an assignment of the existing mortgage, the…title insurance policy will follow the mortgage to the new lender and no additional title insurance premium is charged.”

But lenders don’t always accept a mortgage that a prior lender has registered. That’s because, as Haslett puts it, “The new lender is stuck with whatever the language is in the existing lender’s mortgage documents.”

And here’s an interesting side note:

Haslett says, “New lenders often don’t request assignments from an existing lender because (doing so) provides that lender an opportunity to…retain the borrower.”  If the old mortgage is discharged and a new mortgage is registered, however, “The existing lender often doesn’t know about the borrower moving until it’s too late.”

In addition, when clients change lenders using a refinance instead of an assignment, the party requesting the discharge statement (from the existing lender) doesn’t need to disclose the new lender’s name. As a result, the existing lender cannot see who they are competing against.

Haslett adds that, “If a lender wants the old mortgage discharged and a new mortgage registered, it will attract a new title insurance policy in the name of the new lender and result in a title insurance premium

Thanks to Tom and Mandy Szucs

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Higher Mortgage Rates?

TD Economics published a Special Report on the Canadian mortgage market last month (September 2012). TD says that higher mortgage rates will be necessary to ensure sustainability for the housing market. Click here to read the report.

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