Archive for February, 2020

5 Reasons Why 2020 is The Year To Buy Real Estate

Saturday, February 29th, 2020

Lower mortgage rates, lower home prices, and the rise in buyer confidence means a busy year ahead for realtors

Catherine Musgrove

Thinking of buying a home? Well, 2020 could be your year! Real Estate experts across the country are optimistic this year will see an upswing in the market, and more first-time homebuyers will have the keys to their new front door.

Here’s what we know: 2018 and 2019 got off to a slow start, but 2020 has already proven to be a year with positive surprises.  Here are some market trends that may sway your opinion and have you headed to your favourite real estate agent.

1.  Lower Mortgage Rates

The Bank of Canada’s five-year benchmark qualifying rate dropped last year. Why is this important? Benchmark rates are interest rates set by the bank of Canada that are useful in financial contracts such as mortgages. Make sure you talk to your Real Estate Professional or Mortgage Broker to discuss your eligible rates.

When we see fast economic growth and higher inflation combined with low unemployment, mortgage rates tend to rise. When the economy is slowing down, inflation falling and unemployment increases, mortgage rates tend to decline. It gets tricky when these economic trends don’t co-exist.

Economists are forecasting a slower economy as the year progresses due to challenges in the export market and international trade. That’s actually good for mortgages. However, the national unemployment rate is low and expected to stay low as the demand for skilled trades continues to rise. Despite the discrepancy, the Canadian Real Estate Association remains optimistic.

2.  BC Assessment

In Vancouver, housing prices have experienced a slight dip in pricing in some areas due to the BC Assessments released in January. This lowering of assessed value in some regions bodes well for buyers who are trying desperately to find affordability in an area that boasts some of the most expensive homes in the country.

 3.  More Secure Long-term Investment

There are some great financial incentives only available to homeowners. If you currently own or are thinking about buying, make sure you take full advantage of things like possible tax breaks and incentives, building equity, new housing rebates and more.

4.  Millennials Looking for Good investment  

Now that Millennials are into their late 20s and 30s, they are moving away from rentals and entering the world of homeownership. Millennials now make up the single largest group of Canadian homebuyers.

With recent changes to the Stress Test, the BC Assessments causing prices to drop in that region, first-time homebuyers’ programs and incentives, and lower interest rates across the country, the planets are aligning in 2020 for millennials to break into the housing market.

In a recent interview with the Vancouver Sun Ashley Smith, president of the Real Estate Board of Vancouver says affordability is a critical factor for millennials when it comes to buying a home (especially) in the Vancouver region, adding that a condo may be an attractive option.

“While many people still dream of owning a detached house, others prioritize an urban setting over the traditional white picket fence. I do think there is a shift for many millennials more towards lifestyle rather than square footage,” Smith says.

In addition to price, Millennials are the driving force for technological advancements in the Real Estate industry and industry trends. Environmental footprint, electric car plug-ins, sustainability, and green space are all factors that come into play for millennials.

5.  Expand Your Search: Get More Bang for Your Buck

We all know the location of your home can have a significant effect on its price. By looking slightly outside of a popular neighbourhood but still within its reach, you can increase the affordability factor, get into your home sooner, and experience more bang for your buck.

Not only will you find more housing affordability, but you may also see a decrease in property taxes. In addition to the price, location is often close behind. Once all the musts are checked off your list, like schools and amenities, spreading your wings just slightly outside the preferred area may give you many benefits without sacrifice.

Most real estate professionals and economists agree that 2020 has a bright future for the industry. Convinced the timing is right for you to take the leap into homeownership?

© 2020 REW. A Division of Glacier Media

Commercial Activity Declined in 2019 Q4

Friday, February 28th, 2020

BCREA commercial indicator fell for second straight month


The BCREA Commercial Leading Indicator (CLI) fell forthe second straight month to 134.3 in the fourth quarter of 2019. Compared to the same time last year, the index is up by 0.3 per cent.

Provincial economic activity continued to slow in the fourth quarter of 2019, with declines in wholesale trade and manufacturing sales more than offsetting a gain in retail. This left the economic activity component of the CLI negative for the sixth consecutive quarter. Office employment was up for the sixth consecutive quarter, but not enough to offset a decline in manufacturing employment, resulting in a negative change in the employment component of the CLI. The financial component of the CLI was also negative following three consecutive quarters of positive performance. The underlying trend in the CLI has been relatively flat over the past six quarters, suggesting a continued stable environment for commercial real estate activity in the province.

BC’s economy continued to slow in the fourth quarter of 2019. Weak manufacturing sales in durable goods, and lower wholesale trade sales in motor vehicles and machinery and equipment, put a drag on economic activity. Meanwhile, retail sales were positive after two consecutive quarters of negative growth. Despite this, retail sales ended 2019 with the lowest growth rate since the financial crisis in 2009.

Employment growth in key commercial real estate sectors such as finance, insurance, real estate and leasing continued to be positive, up by 1,600 jobs in the fourth quarter. In contrast, manufacturing employment fell by 6,700 jobs from the previous quarter. The CLI’s financial component was negative in the fourth quarter due to a decrease in benchmark Canadian REIT prices and an increase in short-term borrowing costs.

Q4 Highlights:

  • Economic activity continues to slow in BC, as declines werereported in manufacturing sales (-0.6%) and wholesales (-2.0%),more than offsetting a gain in retail sales (0.8%).
  • Employment growth in key commercial real estate sectorscontinues to be positive with the office sector gaining 1,600 jobs,while manufacturing employment reported a decline of 6,700 jobs.
  • Financial markets reported a 2 per cent decrease in thebenchmark index for Canadian REITs, while short-term riskspreads continue to expand.


Copyright © 2020 British Columbia Real Estate Association

What BCREA wants the government to do about money laundering

Friday, February 28th, 2020

BCREA – more cooperation between federal and provincial organizations

Steve Randall
Canadian Real Estate Wealth

The Cullen Commission inquiry into money laundering in British Columbia began this week as the provincial government seeks a solution to the use of real estate and gambling industries by tax evaders and organized crime gangs.

The British Columbia Real Estate Association made its opening statement to the inquiry and called for greater co-operation between federal and provincial organizations to tackle the problem.

“We are committed to working with government to better understand this issue and address any pre-existing vulnerabilities within our sector,” says BCREA CEO Darlene Hyde. “It is our hope that by working collaboratively we can steer a path forward that strengthens consumer protection measures and limits illicit impact on the housing market”.

Hyde says that she hopes the inquiry will result in a clear evidence-based assessment of the scale of money laundering in BC real estate.

BCREA has already stated several recommendations:

  • Accept only verified funds – For sectors of real estate that are not already required to do so, we recommend that they accept funds only in forms that are verifiable through Canadian financial institutions.
  • Mandatory anti-money laundering education – We recommend the introduction of mandatory anti-money laundering education for all real estate professionals subject to the reporting requirements administered by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to ensure that those professionals are trained in recognizing and reporting suspicious transactions. As a first step, we were pleased to see the Real Estate Council of British Columbia introduce mandatory training for real estate professionals in January. FINTRAC should work with sector organizations, regulators and the provincial government to improve existing resources so that they better reflect real-world situations and improve compliance.
  • Smart regulation – We recommend that the federal government amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to allow FINTRAC intelligence to be made available to additional regulatory authorities, including the BC Securities Commission and the BC Financial Services Authority. Optimally, the federal and provincial governments, as well as their respective agencies, should coordinate their actions, share information, such as the provincial assignment registry, and create a comprehensive, efficient enforcement regime.
  • Ongoing engagement – We recommend governments and regulatory agencies, including FINTRAC, better utilize on-the-ground experience of real estate professionals to develop compliance resources and test policy ideas. This will result in well-crafted, practical regulation and foster a culture of compliance to protect consumers and the economy.
  • Timely and transparent reporting – We recommend that FINTRAC implement a framework to identify and report trends on a regular basis and in language that is consistent and understandable to professionals, the public and media. This reporting system should also include consistency in examinations with immediate feedback designed to help industry professionals improve their compliance systems.

Copyright © 2020 Key Media Pty Ltd

Destressing the 2020 Mortgage Stress Test

Friday, February 28th, 2020

Understanding the changes to Canada’s new Mortgage Stress Test, coming to a home near you in April 2020.

Catherine Musgrove

Agents and economists agree that the recently announced tweaks to Canada’s Mortgage Stress Test bring positive change to the housing industry. The new changes take effect on April 6, 2020, and will apply to insured mortgages. Let’s take a closer look. 

Introducing the April 2020 Stress Test

The new stress test will affect insured mortgages (those with less than 20% down payment). The rate will now be the weekly median five-year fixed insured mortgage rate plus 2%. If the new stress test changes took effect today, the rate would be 4.89%, says the Department of Finance or 30 basis points less than the current stress-test rate. (BTW, there are 100 basis points in 1%). So, a few percentage points can translate into thousands of dollars in savings for the borrower. 

The Benchmark Rate will be published on a Wednesday and come into effect the following Monday.

Critics of the current mortgage stress test say big banks have been keeping their five-year fixed posted rates artificially high. With mortgage rates falling since last year, the stress test has been increasingly out of sync with the actual contract rates consumers are receiving.

“For many middle-class Canadians, their home is the most important investment they will make in their lifetime. Our government has a responsibility to ensure that investment is protected and to support a stable housing market. The government will continue to monitor the housing market and make changes as appropriate. Reviewing the stress test ensures it is responsive to market conditions,” says Bill Morneau, Minister of Finance. 

The announcement comes following a review of the mortgage stress test ordered by Prime Minister Justin Trudeau in December 2019 to explore recommendations from financial institutions to make the stress test more “dynamic.”

Federal financial agencies conducted the review and concluded the minimum qualifying rate should reflect the evolution of market conditions. The stress test will be more representative of the mortgage rates offered by lenders and more responsive to what is happening in the market and economy.

The Office of the Superintendent of Financial Institutions (OSFI) also announced it is considering the same new benchmark rate to determine the minimum qualifying rate for uninsured mortgages.

How This Affects Buyers in 2020

Before this new change, Canada’s big six banks determined the benchmark rate, which was then adopted by the Bank of Canada and used as the stress test rate. The rate has been kept high, and this has affected borrowers from qualifying for the best possible mortgage. In some cases, they may not have been able to buy a home at all. The new test will allow more people to qualify, which is welcome news for the new home buyer.

As well, the new rate is more flexible, and this will, in turn, allow it to go with the ebb and flow of the economy.

In an email to BNN Bloomberg, Robert McLister, the founder of, says that “by unhinging the stress test from the big banks’ posted rates, regulators are fixing a glaring policy error.”

The six big banks should not have been allowed to dictate how easy it is – or is not –  to get approved for a mortgage. Unless there is some unlikely and unexpected shock or rate spike this spring, the new, easier stress test should be music to the ears of home sellers,  adds McLister.

Robert Kavcic, senior economist with BMO Capital Markets, in a note to clients last Tuesday, said the new changes would “…have an impact on the market… At least a modest one to start. First, keep in mind that Vancouver, Toronto, Ottawa, Montreal are all either hot or getting hotter, and these changes will hit right as the spring selling season gets underway…”  

Something else to consider: The federal government only regulates major banking institutions and must impose the laws set by the Bank of Canada. Private mortgage lenders, mortgage brokers and other mortgage-related lenders aren’t subject to the same regulations and have far more flexibility when it comes to approving mortgage loans without the ‘stress test’ involved.

© 2020 REW. A Division of Glacier Media

Berkshire Hathaway Home Services is coming to Canada

Thursday, February 27th, 2020

International real estate firm being established in Toronto

Steve Randall
Canadian Real Estate Wealth

The internationally-renowned real estate brand Berkshire Hathaway Home Services is coming to Canada next month as a Toronto-based firm joins the network.

Blue Elephant Realty will begin operating as Berkshire Hathaway HomeServices Toronto Living Realty, marking the first Canadian franchise in a network of 50,000 real estate professionals, nearly 1,500 offices throughout the U.S., Europe and the Middle East, and more than $114 billion in real estate sales volume.  

“Establishing a franchise presence in Canada has been a major focus of our network’s global expansion,” said Gino Blefari, chairman of Berkshire Hathaway HomeServices. “Blue Elephant Realty is a well-respected company with outstanding leadership and we are very proud that they will be a part of our real estate brokerage network family.”

Blue Elephant has around 100 real estate professionals and its reach includes the Toronto and Durham markets.

“We are excited about this next stage in our evolution as industry leaders,” said Stephanie Newlands, senior VP of sales. “By joining the Berkshire Hathaway HomeServices network, which carries the name of one of the world’s most respected companies, we will have the capabilities for providing our clients with an unparalleled level of resources and personalized services.”

Copyright © 2020 Key Media Pty Ltd

Canada poised to break record for commercial property investment

Thursday, February 27th, 2020

Canada could potentially break the record for commercial real estate investment

Gerv Tacadena
Canadian Real Estate Wealth

Canada could potentially break the record for commercial real estate investment this year, hitting the $50bn mark, according to the latest market outlook by CBRE.

Paul Morassutti, vice chairman of CBRE Canada, said macroeconomic tailwinds, supportive immigration policies, and a bull market are three main factors that could help boost Canada’s commercial real estate market.

“There are challenges ahead, including rising rents, limited office and industrial space, new technologies and the all-important issue of climate change. But ingenuity across our industry has demonstrated that creative solutions and skilful management of these issues can ensure the real estate market’s ongoing success,” he said.

The CBRE market outlook said there is pressure to deploy capital to commercial real estate as yields on traditional investment vehicles start to moderate.

The construction of new commercial spaces will also attract more capital, allowing the sector to perform more strongly. In fact, CBRE said 70% of downtown office space and 50% of industrial space under construction are already pre-leased.

While major markets remain popular investment targets, domestic players competing with foreign capital are starting to unlock assets in smaller cities.

Mid-sized domestic players and private capital are expected to increase in regions such as Ottawa, Waterloo Region, Hamilton, the B.C. Interior, and Quebec.

CBRE said major markets appear to be facing oversaturation. In fact, office rental rates in these areas continue to climb amid record-low vacancy rates. This makes it a struggle for tenants to secure a space.

“A lack of desirable square footage in major centres threatens to thwart companies looking to enter or expand in Canada. Even after space is secured, the rapid growth of technology, changing demographics, and a shifting global economic environment are contributing to a sense of unpredictability,” CBRE said.

On the industrial front, the lack of extensive bay options makes it impossible for tenants to house all their operations in a single distribution centre in major markets.

CBRE identified structural issues that could further impact the investment in commercial real estate. The first is housing affordability, particularly in big cities like Toronto and Vancouver. The skyrocketing prices in these two cities might drive workers away from downtown cores.

Infrastructure is also going to be a problem. CBRE said under-investment in transit could hurt business growth, with commercial spaces competing for proximity to a limited number of transit hubs.

“Left unaddressed, these forces have the potential to not only slow commercial real estate momentum but worsen income-inequality and inflame societal tensions. We must rise to the new challenges and opportunities that lie ahead if Canada is to solidify its status as a primary global investment destination,” Morassutti said.

Copyright © 2020 Key Media Pty Ltd

Plan budget, contingency inputs to anticipate future risks

Thursday, February 27th, 2020

Is a strata corporation permitted to amend their budget part way through the fiscal year

Tony Gioventu
The Province

Dear Tony:

Our strata corporation is one of the properties where our deductible has gone from $25,000 to $100,000 dollars as a result of two claims last year.  We approved our annual budget in December and now are projecting a short fall of about $65,000 with the insurance increases.

A number of questions have arisen as a result. Are we permitted to call a special general meeting and amend our budget part way through the year? This would seem to be the easiest solution.

Is the council permitted to draw the extra funds from the contingency fund as a loan to pay the amount, which we have already done? Our property manager has suggested we pass a special levy for the extra insurance cost and for one potential claim of $100,000 so we have enough funds in our cash flow in the event we have a claim. We had a very large contingency as we scheduled the replacement of our piping in 2019, as a result we are in a low cycle of our contingency balance.

Claire W.  Burnaby

Dear Claire: 

I am often asked whether a strata corporation is permitted to amend their budget part way through the fiscal year. For a variety of reasons, the Strata Property Act did not contemplate or permit this as an option.  At an “annual” general meeting (AGM), the proposed budget for the next fiscal year may be amended by majority vote before the budget is approved.

There are two cycles where this may occur.  At the routine AGM of an established strata corporation, and at a meeting required to implement a phase in a strata plan, where the new phase must hold its meeting, often referred to as the AGM of the phase. Because a phase meeting often occurs between the routine AGM’s of a strata corporation, the budget may be amended only at a phased AGM to incorporate the changes to accommodate the new phase(s).

Another reason the budget cannot be amended, is that the integrity of disclosure on an Information Certificate would be affected, because buyers are informed of the strata fees for the current fiscal year. If budgets were to change throughout the year, it would create unpredictable financial reporting for buyers, financial institutions and taxation filing.

In the short term it is important that the insurance premium is paid. While the strata corporation may borrow from the contingency for cash flow, it must be paid back within the same fiscal year. If there is room in your budget to accommodate the additional $65,000 in your current budget, without being in a deficit, your strata corporation could manage the CRF loan; however, if this places you in a deficit the deficit must be paid back within the next fiscal year. While deferring the inevitable debt to a future year seems appealing, it always results in dramatic increases in strata fees the following year because your strata will then compound a deficit with further increases.

You could also approve the additional contingency insurance expense by three-quarter vote at a general meeting. Special levies are also an option; however, there is no need to approve a special levy for a potential claim in advance. A strata corporation does not require a three-quarter vote at a general meeting to issue a special levy for an insurance deductible. If there is a claim, the strata council approves a special levy for an insurance deductible that includes the amount, purpose, method of calculation and date of payment.

It is difficult to comply with the reporting and refund requirements of a special levy for a potential deductible. If the funds are not used for the purpose intended, the strata corporation must refund the levy to the owners if any owner is entitled to $100 or more.

If your strata corporation does not have a claim this year that requires the payment of the $100,000 deductible, how do you intend to hold the funds? Any seller will demand the levy be refunded and create a potential Tribunal claim against your strata.

Important to note is the issue of a special levy to each owner for a specified claim. This may permit each owner to file that claim against their homeowner insurance for the levied insurance deductible. That is not possible if you pass a special levy for a potential claim.

Your best option? Always to plan your budget and contingency contributions to anticipate future risks. It is only a majority vote at your AGM to approve the budget and any contribution to your contingency fund.

© 2020 Postmedia Network Inc.

Aristotle 20203 84 Avenue Langley 173 homes in a 6-storey building by ML Emporio Properties

Thursday, February 27th, 2020

Aristotle development from ML Emporio Properties puts the focus on families in Langley

Simon Briault
The Province

If you bought at the right time, it’s no secret that there has been money to be made from owning — and then selling — a residential property in the Lower Mainland. Developers know this well and have been on a building spree to meet unprecedented demand in recent years.

But in a real estate market that has often seemed preoccupied with investment value, it’s refreshing to find developments that are genuinely focused on liveability. ML Emporio Properties’ Aristotle, a new multi-family residential development in Langley, is all about end-users – the people who will actually be living in one of the forthcoming project’s 173 homes.

Sim Brar, vice president of construction at ML Emporio Properties, says the project’s liveability is the result of a long process at the company to deliver the best possible end product for homebuyers.

 “We take a lot of pride in being a locally based company with a team of dedicated young professionals that is always looking for new ways to make great homes,” said Brar. “A lot of us come from humble beginnings. I’ve lived in condos and townhouses for many years, so I really understand these types of homes. Just because somebody tells you it’s 1,000 square feet, that doesn’t always mean all of that is functional space. We spend a lot of time and energy making sure our layouts are super functional.”

Aristotle homes will have one, two or three bedrooms. They will range in size from 650 to 965 square feet and are priced from the mid-$300,000 range. The project website lists no fewer than 19 different plans to choose from and Brar says the company is expecting buyers from a wide range of demographics, including young families as well as downsizers who no longer want the responsibility of looking after a single-family home.

“We expect to have many end-users buying homes at Aristotle,” said Brar. “When you look at the layouts you can really plan your living space — how you would configure your couches, where you could put your TVs and so on.”

“With the state of the real estate market these days it’s so important to make sure you get the best value for our buyers’ dollars, which is why we’re also very strategic with the project sites that we choose,” Brar added. “There’s a bus exchange just north of the property offering express buses to the SkyTrain station or we’re only a couple of minutes by car from the highway.”

Aristotle provides easy access to three local parks, a wide variety of eateries, two golf courses, multiple retail options and several schools. The development will comprise two residential buildings in the community of Willoughby in the Township of Langley on 84 Avenue and 200 Street.

“We had an opportunity to have just one tower on the site and, frankly, from a construction point of view we would have saved a buck or two if we had gone with that,” said Bar. “But we really wanted people to be excited about coming home to this development and our vision began to form around the idea of having complementary structures.”

The homes at Aristotle will feature balconies and/or patios, expansive windows that maximize natural light, nine-foot ceilings and Shaw Welcome Packages: free internet service for the first year with the option to renew for a discounted rate. There is wide-plank vinyl flooring throughout kitchen, living and dining areas, plush carpet in all bedrooms, and energy efficient front-loading Whirlpool washers and dryers.

“We give homebuyers options that you might not get in other developments — things like electric vehicle charging, air conditioning, smart programmable thermostats, and heated floors in the bathrooms,” said Brar.

Bathrooms at Aristotle feature solid quartz countertops, flat panel cabinets with soft-close hardware and large-format polished and matte tile flooring. Ensuite or main bathrooms come with mirrored medicine cabinets for added storage. Second bathrooms include large format tiles for floors and white chevron patterned tiles for walls. There are soaker-style bathtubs in main bathrooms, chrome Grohe faucets and accessories throughout and quiet-close toilets.

Kitchens feature full-height, custom cabinetry with under-cabinet lighting, soft-close drawers, quartz countertops, tiled backsplashes and stainless-steel appliance packages by Samsung. There are double-bowl, under mounted stainless steel sinks, Grohe chrome faucets with pull-out sprays and USB charging ports.

On-site amenities include a fitness centre, a yoga studio, a business centre, a workshop and hobby room, and a games room equipped with a TV, billiards and games table.

“We’re really excited about getting this done,” said Brar. “We’re not too far away from breaking ground and we’re looking at the third or fourth quarter of 2022 for completion. We really manage the construction process carefully so that people are genuinely excited to move in. It’s about eliminating buyers’ remorse and people feeling they’re not just buying a real estate asset; they’re buying a home.


Project location: 20203 84 Avenue, Langley

Project size: 173 homes with one, two or three bedrooms, ranging in size from 650 to 965 square feet and priced from the mid-$300,000 range.

Developer: ML Emporio Properties

Architect: Wilson Chang Architect

Interior designer: Creative Spaces by Janet Hardy

Sales centre: 4-8948 202 Street, Langley

Sales phone: 604.239.1559


© 2020 Postmedia Network Inc. All rights reserved

Here’s What First-Time Home Buyers Will Pay in Closing Costs Across Ontario

Thursday, February 27th, 2020

First-time home buyers – how much money you need on closing day

Penelope Graham

The closing date of a real estate transaction is typically much anticipated – not only is the ownership of the property officially legally transferred from the seller to the buyer, but it brings an end to what can be an anxious period for buyers, who’ve had to satisfy a number of conditions, such as securing mortgage financing and insurance, in order to make the deal whole.

Before the keys can be handed over, however, there are still a few expenses buyers need to shell out for. These closing costs must be paid upfront in cash, unlike the mortgage which is amortized and paid in installments over time.

A number of cash outlays are required on the day the home transaction closes including the down payment, PST on your mortgage loan insurance premium, land transfer tax, legal fees, title insurance and other miscellaneous costs.

Down Payment

While your lender will provide your mortgage funds to your real estate lawyer on closing day to pass along to the seller, the buyer must have the cash down payment ready to go, minus any amount that has already been paid as part of their initial deposit. Buyers must pay a minimum of 5% for homes priced at $500,000 and below, and 10% for any portion of the purchase price between $500,000 and $999,999. Homes priced at $1 million or more require a minimum 20% down payment.

Mortgage Loan Insurance, Insurance PST

Home buyers paying less than 20% down on their home purchase are required to take out mortgage loan insurance, which protects their lender from financial loss should the homeowner default on their home loan. The premium for this insurance can be paid in a lump sum upon closing, though it is far more common for the cost to be rolled up in with the mortgage.

Buyers should also be aware that the PST of 8% is charged on this insurance coverage and is due at closing.

Land Transfer Tax (LTT)

Home purchases in Ontario are subject to a provincial land transfer tax. Outside of the down payment, this is likely the largest outlay to be paid at the time of closing. The Ontario land transfer tax is calculated based on increments of the home’s purchase price:

  • First $55,000: 0.5%
  • Amounts over $55,000, up to and including $250,000: 1.0%
  • Amounts over $250,000, up to and including $400,000: 1.5%
  • Amounts over $400,000, up to and including $2,000,000: 2.0%
  • Amounts exceeding $2,000,000: 2.5%

Home buyers in the City of Toronto pay municipal land transfer tax (MLTT) in addition to the Ontario LTT. The MLTT follows the same rate structure as the provincial tax.

Fortunately for first-time home buyers, there are hefty LTT rebates available at both the provincial and municipal level. First-time buyers in Ontario can receive a rebate of up to $4,000, which means purchasers of homes prices below $368,333 will not have to pay the provincial LTT. First-time buyers in the City of Toronto can receive a rebate of up to $4,475 off their MLTT, in addition to the provincial rebate.

Legal Fees, Disbursements, Title Insurance

Legal costs include a number of services, such as registering the transfer of the property and registering the mortgage. Your lawyer will also facilitate the purchase of title insurance, which protects the buyer from any other claims made toward the property. It can also include the ordering of the property survey, should the buyer wish to obtain one.

Other Costs

If building a brand-new home, buyers will need to pay 13% in HST, though they can receive provincial rebates depending on the end value of the home.

How Much Will Buyers Pay on Closing Day Across Ontario?

As housing markets and home prices range widely across the province, so too does the amount buyers can expect to pay upon closing. To find out how these costs range, Zoocasa compiled estimates based on average home prices in 25 major markets across the province. Calculations assume the minimum down payment is made (and includes the initial deposit amount), that all LTT rebates for first-time home buyers have been applied, and that mortgage default insurance costs have been rolled into the mortgage, and hence do not need to be paid on closing day.

According to the study, home buyers can expect to pay the most on closing day for Oakville real estate, as the local average home price is comparatively higher than in other Ontario markets at $1,104,796, requiring the full 20% down payment of $220,959. Although no mortgage loan insurance premium is required due to the 20% minimum down payment, buyers will still pay $237,530 to close their home transaction.

The second most expensive market is Richmond Hill, where the average home price comes to $1,094,091. That requires a down payment of $218,818,and a final closing bill of $235,175. Vaughan ranks as the third most expensive for closing costs; here, the average home price also comes above $1 million at $1,054681, requiring a minimum 20% down payment, but removing the need for mortgage default insurance and the associated PST. Buyers can expect to pay a down payment of $210,936, leading to a total closing cost bill of $226,505. The 416 comes in fourth place with the average price for homes for sale in Toronto hitting $884,385, which requires a minimum down payment of $63,439. However, City of Toronto buyers are also subject to municipal land transfer tax. Meaning – even with first-time home buyer rebates factored in – they face the highest total LTT bill of anyone in the province, at $19,850, contributing to a closing outlay of $87,916.


Average home prices for Jan 2020 were sourced from each city’s regional real estate board or and the Canadian Real Estate Association.

The minimum down payment is due on closing day and is calculated as follows:

  • Purchase price of $500,000 or less: 5% of the purchase price
  • Purchase price of $500,000 to $999,999: 5% of the first $500,000 of the purchase price, 10% for the portion of the purchase price above $500,000
  • Purchase price of $1 million or more: 20% of the purchase price

The mortgage loan insurance premium can be paid on closing day, or added to a the home’s mortgage amount. The mortgage insurance premium for a loan based on a 5% down payment (i.e. loan-to-value ratio of 95%) is 4% of the total loan, i.e. 4% x (home value – down payment). The PST on the mortgage insurance premium in Ontario is 8% and is due on closing day.

Ontario land transfer tax (LTT), excluding the rebate for first-time home buyers of up to $4,000, is calculated as:

  • Amounts up to and including $55,000: 0.5% 
  • Amounts from $55,000.01 to $250,000: 1.0% 
  • Amounts from $250,000.01 to $400,000: 1.5% 
  • Amounts from $400,000.01 to $2,000,000: 2.0% 
  • Amounts over $2,000,000: 2.5%

Eligible first-time buyers in Ontario can receive a LTT rebate of up to $4,000.

Home buyers in the City of Toronto are also subject to a Municipal Land Transfer Tax (MLTT). Rates follow the same structure as the Ontario LTT. Eligible first-time buyers in the City of Toronto can receive a LTT rebate of up to $4,000. (edited) 

Check out the infographic below to see how estimated closing costs range across Ontario for first-time home buyers if they were purchasing the average-priced home in each city.

© 2015 – 2020 Zoocasa Realty Inc., Brokerage

Stress test adjustment will have a minor impact at best – CIBC?s Tal

Wednesday, February 26th, 2020

Mortgage qualification rules increased by 3%

Ephraim Vecina
Mortgage Broker News

The latest changes to mortgage qualification rules increased Canadians’ home purchasing power by a mere 3%, according to CIBC’s deputy chief economist.

In a client note late last week, Benjamin Tal wrote that the recent adjustment to the stress test means that average-income Canadians will be able to buy an extra $13,500 in real estate.

This is a miniscule addition considering the sky-high price points in the country’s most desirable housing markets – underscoring the dire need for policy adjustments that actually address the lack of units in the first place.

“It’s becoming more and more apparent that, short of drastic measures, it’s impossible to fight supply issues with demand tools,” Tal stated in his note, as quoted by the Financial Post. “Increased supply (rental or otherwise) is the only reasonable solution to the housing affordability crisis that many Canadians are facing.”

Scotiabank president and CEO Brian Porter mirrored these sentiments.

“I don’t think a lot of tinkering is necessary on the stress test,” Porter said in a separate Financial Post interview. “But we have to make sure that these housing markets are in balance.”

“You can’t have single-family homes in densely populated cities running right up to [Southern Ontario’s] Greenbelt,” he added. “You have to have multi-use facilities, you have to have rental units, you have to have condominiums of some sort. Each of these cities has to rethink their zoning, or application for zoning, policies.”

An essential starting point would be to cut down as much red tape as possible, Centurion Asset Management CEO Greg Romundt told BNN Bloomberg earlier this month.

“In the 1960s and ‘70s, Canada was building 60,000 to 70,000 apartments a year. When [the government] brought in rent control in the ‘70s, it absolutely cratered new apartment construction; it kind of just petered out to around 1,000 to 2,000 a year,” Romundt explained.

“About 40,000 new apartments were built across Canada over the last decade – absolutely nothing compared to population growth and new demand of around 500,000 units per year.”

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