When this reporter's family moved into its current home two years ago, the listed price was $250,000. Within months however, we had accumulated debts of more than $8,500 on basement renovations, $300 per month in property taxes, and $3,500 for new carpeting — victims of what real estate analysts call hidden costs.

The rule of thumb is to put aside one and a half percent of your purchase price to cover hidden costs, says Giovanni Tino, senior business development officer with the Canada Mortgage and Housing Corporation (CMHC). “By doing your research,” he says, “a lot of those hidden costs will not be hidden.”

Examples include service hookup fees, cleaning, renovation and moving costs, and whether certain appliances come with the property, says Mary Stergiadis, principal of business development with CMHC. Older houses may require basement, roofing or window repair work, while couples who purchase new homes are often unprepared for the number of amenities they need to buy.

“I remember some friends of mine had moved into a new home, and once they got in they realized ‘geez, there’s no window covers, we have absolutely no privacy,’” Stergiadis says.

Then there's taxes. Toronto homeowners need to worry about three: property, which can be paid out monthly, annually, or bi-annually; Ontario land transfer; and Toronto land transfer, which came into effect in February.

“Typically a $312,000, 700-square foot condominium, at 446 dollars per square foot — that was the average price per square foot in the city of Toronto at the end of 2007 — is looking at $6,000 in land transfer taxes,” says Jane Renwick, executive vice president of Urbanation, a real estate market research company that specializes in high-rise.

Condo owners also have to pay maintenance fees (typically around 43 cents per square foot per month) which for newer condos doesn't include hydro.

Homeowners of all stripes need to keep in mind closing costs, which Renwick says typically run between $1,600 and $1,800.

Finally, banks can only cover up to 80 per cent of a home’s mortgage. If you can’t put at least 20 per cent down, CMHC offers homeowner’s insurance which, CMHC’s Tino notes, is separate from life insurance and carries its own fee.

>> For more information, check out cmhc.ca.

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