Buying Real Estate – What is Title Insurance?

When we quote our all inclusive fee to a real estate purchaser and list the various items included – search fees, transfer fee, registration fee, title insurance, disbursements and HST – we are often asked ‘what is title insurance?’.  While title insurance is not a requirement in Ontario, as a firm, we purchase title insurance for every buyer as part of our services.  Here is a short summary of what title insurance is:

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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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