There are many costs involved when buying a property. Anything from you Mortgage to Conveyance and Property Transfer Tax, were here to ensure you that you aren't paying any costs you shouldn't be, and that there aren't any suprise costs along the way. There are many ways to maximize your purchase and ownership of your property. Below is a comprehensive summary of the potential costs and ways to keep costs down through governemet incentives and creative accounting.

COSTS INVOLVED IN BUYING PROPERTY

Conveyance
Whether you are a buyer or a seller you will be responsible for paying the cost of conveying your property. Typically it will be around $800-$1000 on the buying side and approximately $450-650 depending on disbursements on the selling side.

Mortgage
As a buyer you will bear the costs of a mortgage unless of course you are paying all cash. We suggest finding a mortgage consultant who can secure the best interest rate and mortgage terms to suit your financial needs.

Appraisal
Your mortgage lending institution generally always pays for the appraisal of your property. They will not usually lend on a property without obtaining their independent appraisal advice. We suggest you ensure you do not bear this cost and that your mortgage specialist ensures that your lending institution will bear this cost.

Property Transfer Tax
Property Transfer Tax (PTT) is payable by the purchaser or transferee at the time the application to register a transfer is presented to the Land Title Office. PTT is calculated as follows:
1% of the first $200,000 of market value & 2% of the balance. Please see here for further information:

HST
HST is only applicable when you buy a newly constructed home, condominium, or townhouse. The entire purchase price, including land, is taxable. Co-operatives, mobile homes on land, and leases are also subject to HST. You may qualify for a partial or full HST rebate, depending on the purchase price and if you are a first time home buyer.
Here are some helpful links:

The Real Estate Association
HST Calculator
Clark Wilson LLP

Home Buyers Plan
The HBP is a Canada Customs and Revenue Agency program that allows each eligible purchaser to withdraw up to $20,000 from their RRSP, including a spousal plan to buy or build a qualifying home for yourself. Starting in 1999 you can withdraw funds from your RRSPs under the HBP to assist a related disabled person by either using the funds to acquire a home for them or by providing the withdrawn funds for them to acquire the home. The HBP applies to both new and existing houses, condominiums, co-operatives and lots on which the purchaser intends to build, which are located within Canada. The home must be occupied by the purchaser as a principal residence within 1 year from the completion of the purchase date.

The contract of purchase & sale must be entered into before the funds are withdrawn from the RRSP. The purchaser must acquire a home prior to October 1st of the year following the withdrawal. You do not have to include eligible withdrawals in your income, and your RRSP issuer will not withhold tax on these amounts. You can withdraw a single amount or make a series of withdrawals throughout the
same year, provided the total is not more than $20,000. If you buy the home with your spouse or other individual, each of you can withdraw up to $20,000.

You have to repay all withdrawals to your RRSP’s within a period of no more than 15 years. You will have to repay a minimum of 1/15th, to your RRSP’s each year until you have repaid all the amount you withdrew. If you do not repay the amount due for a year, it will be included in your income for that year. The HBP is not available if the buyer or their spouse has owned a home in the previous 5 years or they have previously participated in the HBP program and have not fully repaid it by the preceding years end.

The funds must have been invested in the RRSP for at least 89 days before they are withdrawn for use under the HBP.Mortgage underwriters will require proof that the funds have actually been withdrawn from the RRSP.

Capital Gains & Tax Advantages
If you buy a property to live in, called a principal residence, you do not have to pay taxes on the capital gain of your home. For Investment Properties where you do not reside, real estate profits are not taxed until you sell. If you purchased a property for $300,000 and it is appreciated up to $450,000, the $150,000 gain is protected from taxes until you sell. You benefit because your investment can grow tax-free year after year. Another option is to re-mortgage the house or get a line of credit against it to buy another one and again, it's tax-free. You are taxed at your personal tax rate on 50% of your capital gains, unlike income from your employment and interest income from Bonds, GICs, etc which are 100%. Investment Properties allow for many tax deductions. Your finance and operating costs such as mortgage interest, property management fees, property taxes, repair and maintenance, etc. can all be deducted from income.

Cost Benefits of Live/Work Designated Spaces
By owning a designated live/work space there are many tax advantages. Your finance and operating costs such as mortgage interest, property taxes, repair and maintenance can all be deducted from your income. You must however pay an initial GST payment on the property. For more information call us or your personal accountant.