What is Land Transfer Tax and when is it paid?
Whenever you purchase Land in the Province of Ontario, you have to pay a tax referred to as Land Transfer Tax.
Land Transfer Tax is payable on every resale home purchase and can be thousands of dollars. To find out how much check with your lawyer or see my article online at www.schwarzgillen.com.
If you are over 18, have never owned a home at any time, anywhere in the world, are not married to or have a same sex partner that owned a home at any time while they were your spouse or same sex partner you may have your lawyer get you the Land Transfer Tax exemption/rebate which means you will receive an exemption on the first $2,000 of Land Transfer Tax payable. If you are purchasing in Toronto you have to pay a Toronto Land Transfer Tax as well. It also carries a first time home buyers’ exemption.
How does the HST thing work on a home purchase?
I you are buying a resale home, except in special circumstances there will be no GST issue because you are purchasing a used residential premise.
If a new home, virtually all builders include HST in the purchase price. The Builders also get an assignment of the GST rebate that you qualify for as long as you are a Canadian resident and your settled intention is for you or immediate family to reside in the home after Closing. You will simply sign the forms and the issue will have no effect on your purchase. It is only if you are buying for investment purposes or through a holding company that you will run into issues that will require advice, because then you may have to pay the lost rebate to the Builder. This does not mean that you cannot get the money back or be exempt but this gets complex and here is where you need to speak to your accountant or lawyer.
What is Title Insurance and do I need it?
When a lawyer closes your deal he certifies you properly own your home. He is covered by his Law Society insurance if he makes a mistake. If however he dies or otherwise stops being a lawyer his insurance stops as well. To fix this we now use Title Insurance.
A title insurance policy should provide insurance for certain title-related risks associated with home buying. It should insure against defects in title. It should cover issues like work orders, permit violations, fences, boundaries, tenancies, rights of way, and more. It is supposed to be in force so long as the purchaser or his heirs own the property. Your lawyer should help you decide which Company and policy is best for you. It should also save you $2-300 in expenses.
For more information ask your lawyer or read my articles at www.schwarzlaw.ca. Remember only a lawyer can provide legal advice, that’s the law. When you select a lawyer find one who knows real estate and wants a long-term relationship.