Not sure whether to buy a new build home or resale property in the Greater Toronto Area? Here’s how to decide what’s important to you as a home buyer.

The New Home Experience

New home build contracts offer good value for your money and come with warranties for many, but not all, construction defects. You avoid paying for expensive upgrades to bring your new home up to contemporary building standards. You can design your home, with the help of a good architect, or choose from builder packages. Many developers allow you to pick your own finishes for free or, depending on the quality, a top up premium.

You could get lucky and find a new home close to downtown Toronto or an infill unit (filling in the vacant space between existing homes). More likely, your new home will be in an outlying suburb, where prices can be cheaper. On the downside, your commute could be longer and some community amenities, just like your home, may still be under development.

Buying a Resale Property

Resale homes have that lived-in feeling but are usually in established neighbourhoods closer to transit and services like malls, corner grocers, places of worship, and community centres for the kids or you. You may be able to walk to work and many of the services you’ll use regularly. A competent home inspector can tell you if major repairs are needed to a resale home or if your home will stand the test of time.

Purchasing a New Condo Assignment

You can get that new home experience with a condo assignment, buying a newly or nearly completed condo from an owner who has yet to move in. New condo buyers don’t own their unit until it is legally registered in Ontario, which can be weeks or months after construction is complete. They can’t sell an unregistered condo, but you can purchase their contract, called a condo assignment.

Condo assignments can be a smart move for new home buyers if sellers are anxious to negotiate. You may pay way less buying pre-registration than if you waited for completed units to come up for sale.

Be aware, though, that you are inheriting the contract’s original terms and conditions, including any construction delays or workmanship problems, and paying HST, new home (Tarion) warranty fees, and utility connection costs. A condo assignment can easily cost up to 3% more than a resale unit.

Choosing the First Home of Your Dreams

Which is better? If you can manage the months-long process of waiting for a developer to build your home or financing construction loans to build your own, a new home may be for you. If it’s all about reducing risk, consider a resale home first, then condo assignment. Having an experienced real estate agent at your side can help you weigh the pros and cons.

Budgeting to be First Time Buyer (Ontario)

Average closing costs for first time home buyers in Ontario are 1.5% to 4% of a home’s total value. You could pay between $10,000 and $20,000 or more to register a mortgage, for provincial (or in Toronto municipal) land transfer taxes, lawyer’s fees and costs, property title insurance and registering the property title and mortgage. Who pays land transfer tax.

Remember to budget for overnight stays in hotels while relocating, movers, new appliances, home upgrades like carpet replacements and necessities like a shed for your lawnmower and snow blower.

Axess Law recommends getting pre-approved for a mortgage by a reputable banker, credit union or private lender before you go home shopping. That keeps your expectations realistic.

Owning a new property

Help for First Time Home Buyers – Ontario

First Time Home Buyer’s Incentive

If a downpayment is keeping you from buying an Ontario home, the First-Time Home Buyer Incentive offers interest-free, federal housing loans of up to 10% of your home’s value. Buyers get incentive payments of 5% for resale homes (maximum $24,000), 5% or 10% (maximum $48,000) for new builds, or 5% for mobile or manufactured homes.

Exactly how does a First-time Home Buyers Program work in Ontario? You qualify if you have the minimum qualifying down payment, make under $120,000 and the mortgage is four times or less your annual income (maximum $480,000). You save mortgage interest, can increase your down payment and take up to 25 years to repay or pay the loan back when you sell (obligatory). The repayment amount drops when home prices go down, but increases with your home’s value.

If you don’t mind having less home equity because the government owns 5% to 10% of home or potentially getting less mortgage funding than banks or mortgage brokers would offer without income restrictions, consider applying. Getting in on the First-Time Home Buyer Incentive.

Low Down Payment Mortgages

Home buyers with 5% to 19% down payments qualify for high ratio mortgage loan insurance of up to $1 million through Canada Mortgage and Housing Corporation, Sagen™, or Canada Guaranty. You pay:

5% down for the first $500,000 of your home mortgage loan, and
10% down on the balance, up to $1 million.

For example, an $800,000 condo in Greater Toronto Area requires $70,000 down — $40,000 for the first $500,000 and $30,000 on the $300,000 balance.

You pay for the convenience with a one-time, lump sum, or monthly loan insurance premium. Premiums added to your monthly mortgage increase mortgage interest costs over time. Find interest costs with CMHC’s mortgage insurance calculator.

Home Buyers’ Plan

Have unused savings in a RRSP? Canada’s Home Buyers’ Plan lets you withdraw and defer taxes for up to 15 years on up to $35,000. As long as you or your spouse or common law partner have not owned a home in the past for years, you can each withdraw the maximum to buy or build a principal residence. You must pay back the full amount by the time limit, annually or in a lump sum amount. Apply to the federal Home Buyers’ Plan.

Home Buyers’ Amount Tax Credit

Help with legal fees, disbursements, and land transfer taxes is available through a $5,000 non-refundable income tax credit of up to $750.

Land Transfer Tax Refund for First Time Home Buyers

First time buyers in Ontario pay between 0.5% and 2.5% of their home’s value in provincial land transfer taxes (some exceptions apply). A first home purchase of $368,000 or more could make you eligible for the Ontario land transfer tax rebate, worth up to $4,000. Single family or duplex properties in Toronto proper are subject to an additional municipal land transfer tax of 0.5% to 2%, with rebates of up to $4,475 for first time buyers. Axess Law can explain if you qualify for exceptions or a rebate for all or part of transfer taxes.

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Why You Need a Real Estate Lawyer

Our lawyers arrange signatures for mortgage insurance and mortgage documents with your bank, trust account, credit union, or private lender. We answer your questions, like if a real estate deal falls through who gets the deposit and what is title insurance.

Buying and selling a home on the same day can leave you feeling harried. Your Axess Law real estate lawyer discharges your existing mortgage, and finalizes your new mortgage loan to get you into your next home quicker.

Can’t quite find a mortgage interest rate you like? Axess Law talks to the seller’s lawyer about extending the real estate transaction closing date. If the seller agrees, our professional legal team can make an amendment to the agreement of purchase and sale that gives you the extra time you need.

We search title to property for financial claims or construction liens before registering it in your name. You can add names to title, such as a common law or legally married spouse, when you buy or after. Adding spouses to house title in Ontario.

Only a lawyer licensed with the Law Society of Ontario can prepare closing documents for real estate sales or mortgages. Axess Law makes it easy and affordable.

Affordable Legal Services, Anywhere in Ontario

Access lawyers for less in the Greater Toronto Area, Ottawa, or anywhere in Ontario when you buy, sell, or transfer property. Axess Law’s flat fee real estate lawyers are affordable, and our rates are all inclusive (excluding taxes, disbursements, and third-party charges). Axess Law offers you only the legal services you absolutely need. Your final invoice includes no surprises or hidden charges. Your itemized statement of adjustments is explained when we deliver it, and we answer any questions you have about it.

Use a virtual real estate lawyer.

Book Online or In-person Appointments Quickly and Easily

Want to know more? Axess Law has an affordable flat fee real estate lawyer near you, online or in person. We close real estate transactions quickly and for less than you might expect. Call our 647-479-0118 lawyer line in Toronto (toll free to 1-877-402-4207) or use our easy online booking form to arrange a videoconference appointment anywhere in Ontario. Meet in person with a lawyer at our conveniently located Ottawa or Greater Toronto Area law offices.