It’s a big occasion when you have finally decided to buy condo in Brampton. You have started to envision yourself in a new home and your family living happily in it. You can call it your own. Beyond that excitement what keeps your mind anxious is probably the associated costs. Although you have saved enough for a down payment and have arranged a mortgage. But that’s not enough. At least to close the deal. It could be discouraging to think about closing costs at the beginning of your purchase. But it’s an important step to ensure your homeownership plans go smoothly. In this blog, we will talk about closing costs when you are looking for condos in Brampton. It’s a strategic location in Ontario and you wouldn’t want to miss the details.
Closing costs are the fees paid when finalizing a real estate transaction. For condos, they often include:
- Lender fees – loan origination, underwriting, etc.
- Title charges – insurance, searches, etc.
- Condo corporation fees
- Moving expenses and insurance
Average around 1.5% to 4% of the purchase price. But how much precisely? That depends on:
- The condo’s fees and rules
- The lender’s specific charges
- Local taxes and transfer fees
What are the Closing Costs for a Condo?
Closing on a condo involves more than just the purchase price. There are additional fees and expenses, collectively called closing costs, that buyers have to pay. What do closing costs cover exactly? They can include lender fees, title company charges, taxes, homeowners association move-in fees, and more. The total amount varies based on factors like your loan details, the condo building’s HOA dues, and the area you’re buying in. But you’re typically looking at 1.5% to 4% of the purchase price. They are additional expenses you need to pay beyond the purchase price whether you are looking for resale or pre-construction properties. Here you are looking to buy condo in Brampton so the closing costs may differ from other regions.
Land Transfer Tax in Brampton
The land transfer tax in Brampton can vary depending on the municipality where your condo is. Who pays the Land Transfer Tax (LTT) when buying a property? It’s the buyer and it’s based on the property’s purchase price. How’s it calculated? Each province (and sometimes municipality) has its own formula.
The applicable tax rates for the provincial land transfer tax in Ontario are:
- For properties valued up to $55,000: 0.5%
- For properties valued between $55,000 and $250,000: 1.0%
- For properties valued between $250,000 and $400,000: 1.5%
- For properties valued over $400,000: 2.0%
- For properties over $2 million: 2.5%
Let’s say you’re purchasing a property in Ontario for $350,000. To calculate the Land Transfer
Tax (LTT), you would apply the following formula:
For the first $55,000: 0.5% x $55,000 = $275
For the portion between $55,000 and $250,000: 1.0% x ($250,000 – $55,000) = $1,950
For the portion between $250,000 and $400,000: 1.5% x ($350,000 – $250,000) = $1,500
Now, add up the results:
$275 + $1,950 + $1,500 = $3,725
So, the Land Transfer Tax (LTT) for a property valued at $350,000 in Ontario would be $3,725.
For first-time homebuyers in Ontario, there is also a rebate of up to $4,000 on land transfer tax. You can rely on your realtor who will work with your mortgage agent to do the calculations. They provide the necessary detailed guidance. Individual situations vary so it’s not possible to give a definite number when it comes to land transfer tax. So if you are about to buy condo in Brampton, discuss land transfer tax with your agent.
Legal Fees and Disbursements
Legal fees and disbursements – what exactly do they cover? Your real estate lawyer’s services don’t come for free, unfortunately. They’ll charge legal fees to review all the paperwork. The fee may also involve registration of the property title. They are professionals who will ensure the transaction meets all legal requirements for you. Fair enough, right? Then there are disbursements. Disbursements are out-of-pocket expenses your lawyer incurs on your behalf. Title searches, document registration fees, courier costs…they can really add up. Law is a clever profession. Make sure you are clear about costs when working with a lawyer and looking for condos in Brampton.
Title Insurance and Home Inspection Costs
Closing costs when buying a condo in Brampton can also include title insurance and home inspection fees. Sometimes buyers don’t know about these costs and feel surprised at the closing. Let’s break them down:
Title Insurance – This protects your ownership rights. It means if any title defects or issues pop up down the road, title insurance will cover them. Most lenders in Brampton require it to approve your mortgage. The title insurance premium is a one-time cost and is usually $250 in Canada.
Home Inspection – Even for condos getting a professional inspection is highly recommended. It usually involves assessing the unit’s condition and flagging any repair needs. Condo inspection fees can range from $300-$600. If you are about to buy condo in Brampton then this is important. Consult with your real estate agent as well.
Prepaid Property Taxes and Utility Bills
You need to pay property taxes as well when you own a condominium. It is based on your property value. In Brampton, property taxes are based on a property’s Municipal Assessment Corporation (MPAC) value and annual tax rate. To get your final property tax, multiply Brampton’s annual tax rate by the MPAC-assessed property value.
Don’t overlook utility bills when budgeting for closing. Sellers often require buyers to reimburse prepaid taxes and utilities from their ownership period. Seems fair, right? These prepaid amounts get calculated and added to your closing costs. They are not huge amounts but they can still catch you off-guard if not considered in advance.
Condo Corporation Fees and Special Assessments
When you buy condo in Brampton you are also joining the condo corporation and expected to pay a fee. It is paid by all the homeowners in a condominium complex. The fee is charged for the purpose of maintenance, repairs and other common expenses. But what about special assessments? Some condo units may have larger or more expensive repairs than others. These improvements are not covered by reglar condo corporation fees. And these unexpected repair costs get passed to owners. Did you budget for a new roof or balcony repairs? No? Better find out before closing.
Moving Expenses and Insurance Costs
Don’t forget the literal cost of moving into your new condo! Hiring movers, renting a truck, storage fees – it’s not cheap to relocate. And you’ll need condo insurance too. Policies are sometimes mandatory and premiums get paid upfront at closing. It can range between $300 to $600 for a basic policy. Affordable protection against the unexpected.
Be Prepared for Closing Costs When Buying a Condo
You can easily overlook closing costs but they add up quickly. Brampton is a growing city with several exciting condo projects. There is no scarcity of luxury and convenient condos in Brampton. So if you have decided to buy a condo in Brampton, make sure you remember about the closing costs. They are beyond purchase price and they really bite if you are are not prepared for them.
If you need any help in buying properties in Brampton or anywhere in Ontario, feel free to connect with Condos2Home.
