When do I get my Keys?

If you’ve got a ton of questions about buying your first home, you’re not alone. Join @RBC_Canada and a panel of 5 experts (including myself, @DavidLFeld!) for the #FirstHome Twitter chat, on June 26 from 9-10 pm. Get answers to your most complicated questions and a chance to win RBC Visa Gift Cards!

 

I am lucky because I get to meet a lot of people in a day.  A lot.  From nervous first time home buyers to ballin’ international investors in Lambos, we always get the same simple question – when do I get my keys?

 

There are legal answers and practical answers to this question.  The practical answer is that for 95% of the time, for resale properties, you can expect to pick up your keys at your lawyer’s office “some time” between 3:30 and 5:00 p.m. ON THE DAY of closing.  So make your MOVING PLANS ACCORDINGLY.

 

Legally, Agreements of Purchase and Sale say that vacant possession must be given to you by 6:00 p.m.  This is why we always give both answers.  So, the legal answer is that you have until 6:00 p.m. to receive your keys (and your new castle should be vacant at that time), but in reality you usually get them around 3:30 to 5:00 pm and can expect that the seller’s MIGHT still be in the property as you arrive.  To avoid the awkward OH SO YOU’RE THE NEW OWNER, OH SO YOU ARE THE GUYS THAT LIVED HERE moment you might want to SHOW UP ON THE LATER SIDE OF 5:00 P.M. AND BOOK MOVERS AND ELEVATORS ACCORDINGLY.

 

This post content is sponsored by Royal Bank of Canada, however the views and opinions expressed herein represent my own and not those of Royal Bank of Canada or any other party and do not constitute financial, legal or other advice.

What is a First Time Home Buyer?

If you’ve got a ton of questions about buying your first home, you’re not alone. Join @RBC_Canada and a panel of 5 experts (including myself, @DavidLFeld!) for the #FirstHome Twitter chat, on June 26 from 9-10 pm. Get answers to your most complicated questions and a chance to win RBC Visa Gift Cards!

 

 

One would think the term “First Time Home Buyer” (FTHB) can be simply defined.  Unfortunately, it is not.  The FTHB definition differs according to the program, CCRA HBP or Toronto Land Transfer Tax (LTT).

 

When discussing financing options with their mortgage specialist, buyers may consider withdrawing funds from their RRSP to put toward their down payment.  This can be done tax free under the Canada Revenue Agency Home Buyers’ Plan (HBP) so long as certain conditions are met, including the requirement for the buyer to be a FTHB.  For the purposes of the HBP, a FTHB is a person who has NOT:

-          At any time during the period beginning January 1 of the fourth year before the year of the withdrawal and ending 31 days before the date of withdrawal, you or your spouse or common-law partner owned a home that you occupied as your principal place of residence.”

This means for the HBP, one can potentially be considered to be a FTHB every five years.  FTHBs under the HBP often take this to mean they are also eligible for the FTHB land transfer tax (LTT) rebates, which gives Toronto FTHBs an instant rebate of up to $5,725 off the LTT(MLTT + Provincial Land Transfer Tax PLTT combined).  That is not so.  In order to qualify for the LTT rebates, a FTHB is a person:

-          who has never owned a home ANYWHERE IN THE WORLD; and

-          whose spouse has not owned a home anywhere in the world while being the spouse of the FTHB 

o   The term “spouse” means married or in a common law relationship (continuously lived together for at least 3 years – or shorter if parents of a child).

See the difference?  For LTT rebate purposes, your FTHB status will never reset.  Also, for LTT rebate purposes, you will not be considered to be a FTHB if your spouse (married or common law) owned a home while being your spouse. 

It is entirely possible for one to be considered a FTHB for the purposes of the HBP, but not a FTHB for the purposes of LTT rebates.  Buyers are urged to consult an experienced mortgage specialist and real estate lawyer, lest they be shocked by having to pay more than anticipated. 

For more information on the Home Buyers’ Plan, including spousal eligibility, you can visit theCRA website. For more information on LTT, please visit the City of Toronto City of Toronto.

This post content is sponsored by Royal Bank of Canada, however the views and opinions expressed herein represent my own and not those of Royal Bank of Canada or any other party and do not constitute financial, legal or other advice.

 

Useful Phone Numbers to Help You Out.

Should there be any separate utility meters on the property being purchased, the appropriate departments must be advised to read the meters on closing so that there will be no interruption of services so that the purchaser will only be billed after the closing date with the vendor being billed for the period prior to the closing date. Hydro prefers that purchasers and vendors make direct arrangements for meter readings by contacting Hydro. It is also ADVISABLE that purchasers should also contact any applicable utility department to arrange to have utility accounts set up in the purchaser’s name to avoid any misunderstandings.

 

For your convenience, some telephone numbers are:

City Water Hydro Gas Property Taxes
AJAX (905) 619-0500 (905) 686-2311 (877) 362–7434 (905) 683-4550
Ext. 22
AURORA (905) 727-4612 (905) 727-1375 (877) 362–7434 (905) 727-1375
BRAMPTON (905) 840-6300 (905) 791-9400 (877) 362–7434 (905) 874-2000
MARKHAM (905) 477-3810 (905) 477-3810 (877) 362–7434 (905) 477-7000
MILTON (705) 739-5130 (416) 876-4611 (877) 362–7434 (905) 878-7211
MISSISSAUGA (905) 279-9050 (905) 791-9400 (877) 362–7434 (905) 896-5575
NEWMARKET (905) 895-2309 (905) 895-5193 (877) 362–7434 (905) 895-5193
OAKVILLE (905) 825-9400 (905) 825-9400 (877) 362–7434 (905) 845-6601
OSHAWA (800) 372-1102 (877) 997-2899 (877) 362–7434 (905) 725-7351
PICKERING (905) 427-0791 (800) 465-6611 (877) 362–7434 (905) 420-4614
RICHMOND
HILL
(905) 884-4466 (905) 771-8800 (877) 362–7434 (905) 771-8800
TORONTO (416) 338-4829 (416) 542-8000 (877) 362–7434 (416) 338-4829
VAUGHAN (905) 832-8371
Ext. 8779
(905) 832-8371
Ext. 8779
(877) 362–7434 (905) 832-2281
WHITBY (905) 668-5878 (905) 571-6611 (877) 362–7434 (905) 668-5803

 

Purchasing a Property; some things to note

I know this is a crazy time in your life and so I have summarized below some of the important things you will need to remember about the purchase or sale of your property.

 

Agreement of Purchase and Sale (commonly called Offer to Purchase)

Understanding the Agreement of Purchase and Sale (for use in the Province of Ontario, which is sometimes commonly referred to the Offer to Purchase) is essential once your house hunting expedition is a success! You have finally found the perfect home, one that satisfies your needs, most of your wants and best of all, fits your budget. Now comes one of the most important phases of your home-buying experience: making an offer to purchase the home.

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Calculating Land Transfer Taxes

NEW! City of Toronto Land Transfer Tax

 

On October 22, 2007, Toronto City Council approved a new land transfer tax which takes effect on February 1, 2008.

 

(a) ½ of 1% (or $5 per $1000) to $55,000, and
(b) 1% (or $10 per $1000) over $55,000 to $400,000 and
(c) 2% (or $20 per $1000) over $400,000

 

Use our on-line tool to help calculate land transfer tax for your purchase.

 

Land Transfer Tax (LTT) is a tax charged by Ontario to buyers of real estate at the time a deed is tendered for registration with the Land Titles Office. It is sometimes called the “Welcome Tax”.

 

LTT is calculated as a percentage of the purchase price of the property as follows:

 

(a) ½ of 1% (or .05% or $5 per $1000) to $55,000, and
(b) 1% (or /1% or $10 per $1000) over $55,000 to $250,000 and
(c) an additional .5% for all values over $150,000 but under $450,000

 

An easy rule of thumb for properties under $250,000 is to take 1% of the value of the property and substract $275 (to account for the .5% reduction in tax for the first $55,000 of value). For example, if the property is worth $100,00 the tax would be calculated as follows:
$100,00 x .01 = $1,000
less (275)
equals LTT of $725

 

Use our on-line tool to help calculate land transfer tax for your purchase.

 

There are some situations that involve different calculations, so be sure to consult with your legal advisor to get the proper calculation.

 

First Time Home Buyers

If you’re a first time home buyer, you’re probably a little nervous about the prospects of buying a new home. You’re not alone. Thousands of people have done it and survived. You can too! The process is actually not that complicated, and if you get organized and make some good decisions at the outset, it should be a positive and happy experience.

 

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