When it comes to owning property in Canada, condos hold a great value. Money turns out to be one of the major driving factors to choose a condo over a single-house property. As per the Real Estate Journal, the condo prices are expected to rise at a slower rate as compared to single-family homes.
This makes them a more affordable choice for homebuyers. The real estate market price is on the rise, but you can readily take advantage of the lower costs of the condos.
There are many varied advantages of tax deductions included in the interests of the mortgage you take up. It can be said that not everything is based on money. Condos are known to offer an attractive and elegant lifestyle for homeowners.
Prospective investors and buyers are on a ramp towards the popular communities in and around the condos. Even retirees are taking advantage of the good socializing conditions provided by condo communities. You can permanently leave all your worries when it comes down to the facilities available in condominium developments.
Condos provide a range of services at communities. The usual chores of owning a house are not present for any extra maintenance. With added amenities like gym, pool, and sports clubs, there’s a lot to explore within a condo development.
Condos offer a less expensive alternative to big houses which require a lot of attention and maintenance on a regular basis. You don’t have to worry about someone having to watch your property when you’re away somewhere. You can also pay for a vacation time by renting out your condo at a given time. This opens you up for an extra source of income as well.
It’s no secret that a condo offers a lot of advantages over other alternatives. Let’s go over some of the things you have to keep in mind to manage the property taxes includes in condo developments. It’s important to have all the information at hand when it comes down to owning a condo property.
What to Expect in Property Taxes
When you get around buying a condo, you have to think far ahead. It’s not just the sales contract that you should be focusing on. Along with that, there’s an agreement or declaration to go over.
This is to make sure that you know all the details to the way condo purchases happen and how it is essentially governed. It’s important that before actually buying a condo, you go over the essential documents in order to know how to manage the entire complex.
You can request and read the documents as per your needs and requirements. The property tax involved in the case of condos varies a lot depending on the location of the condo. For the Greater Toronto Area, it can vary based on the exact place of the development.
It could range from the lowest cost in the city of Toronto which stands at 0.63551 percent. The Orangeville stands to be the highest at 1.40990 percent of the tax.
How Property Tax is Calculated
With higher home values, the costs of the property tax also decrease. The cities like Toronto, Markham, and even Richmond Hills have comparatively less rates.
In contrast to that, locations like Oshawa and Orangeville come with the lowest average home values. The tax rates here are very high owing to the developing communities.
The average home price in the city of Oshawa is about $585,000. It comes packed to have a tax rate at 1.40690 percent. The annual taxes here round up to $7,249. (1) The average cost of a house in Richmond Hills is twice as much. The rate stands to be $1,033,754 where the owner has to pay the same amount in terms of property taxes. The tax rate is much lower standing at 0.71760 percent.
The essential nature of the property taxes is that they are calculated on the basis of multiplying the assessed value of a property by the given tax rate. The tax rate can vary depending on land use. This could be based on residential use and several other uses depending on the provinces and cities.
There can be many significant differences among the regional tax rates. If you are trying to make a decision, you should keep in mind about which province and territory you are choosing.
You can also watch this informative video on how property taxes are calculated.
Benefits of a Owning a Condo
A condominium is essentially a multi-unit property that is sold as individual units. When you’re looking forward to buying a new home, you will be provided with a number of choices and a condo comes to be on top of it.
As compared to a single-home dwelling, you will have partial ownership in the common property. Basically, some parts of your residence will be owned collectively by many others. There are varied common areas for the use of the residents.
It’s basically an apartment space that you own. The shared complex of a condo makes up for an apartment kind of a thing. It’s a shared building that you will take part in sharing the costs with. There are many distinct challenges that condo owners can face based on it.
That’s why it is so important to know and set everything set before you can buy a condo for a new home. Get to learn a little more about what kind of a property a condo constitutes with all the information within.
You can find many large families dwelling in condos. It can essentially take space of an individual big home with the world coming to space shortage. Condos can develop a new form of home ownership with new groups of people to mix with.
There are many blissful communities around a condo development offering a range of facilities to residents. If you want to invest or buy a house, then a condo should be your first choice to consider given the cost ranges. It’s the best way to get inside the real-estate market in this day and age.
The land transfer tax is something that is paid by everyone who agrees to purchase a particular property. It is also paid up front when you are buying a house or a condo alike. It’s basically all about buying land and the marginal tax that you have to pay for the same. The land tax is supposed to be paid once you are done with the transaction or purchase of the condo. (2)
It can be paid up to 30 days after the purchase of the property. There are varied land transfer tax depending on the province that you are in. Along with that, there is also a separate transfer fee that you have to manage.
In cities like Toronto, the property taxes also include additional municipal land transfer tax. There’s a lot of things to consider when it comes down to property taxes on condos. The residential property tax in the case of Toronto stands close to 0.66 percent, according to the Bob Aaron firm.
The taxes are based on the assessed value of a home. It can be reassessed periodically over the years. The higher-end portions of the cities can have a large difference in terms of property taxes. Similarly, the tax rates along the periphery of the city limits also differs a lot.
Condo Property Tax: The Bottom Line
For a large city like Toronto, the taxes are comparatively very low. The other charges of the city that is expanding constantly make up for the difference of the real-estate prices.
Furthermore, there is a municipal land transfer tax along with large developmental charges. There’s even a garbage fee that fills up the gap when it comes to the difference of costs.
Toronto is the primary residence for many working individuals living outside of the city. The tax treatment for such individuals is also different based on the non-residency terms. If you are choosing to rent out your condo, the income will be taxed in the sector of personal income.
It would not be allowed for the use of principal residence exemption if you didn’t reside there. This particular exemption allows a resident of the country not to pay any capital gains on the increase in the value of the whole property.
Year-round residential condos are really something that you should consider as an investor or a new homebuyer. Before jumping on the wagon, look over all the details of the costs involved in making the purchase so you don’t have to deal with any hassles. It’s time to get aware of the functioning of property taxes when you’re buying a new condo.
If you have any questions, get in touch with the Precondo team. We’ll be happy to help you out.
1. Dave Flaherty, Strong outlook for Durham housing market, retrieved from https://oshawaexpress.ca/strong-outlook-for-durham-housing-market/
2. Ontario Ministry of Finance, Land Transfer Tax, retrieved from https://www.fin.gov.on.ca/en/tax/ltt/