When it comes time to sign on the dotted line to buy your new condominium suite, just as with a single-family home, there will be closing costs that are above and beyond the purchase price.


The best thing to do is to be prepared by using a little forethought and doing some homework. Read all your condominium documents carefully, have them reviewed by a lawyer and when in doubt, ask questions. You don’t want financial surprises on the day you take possession of your suite.

The first major closing cost is the balance of your deposit. If you have arranged for a conventional mortgage, the remaining down payment that totals 25 per cent of the purchase price is due on interim closing. And if you are buying the suite as an investment rather than your principal residence, you will need to pay the entire GST amount up front. Many buyers don’t realize this. GST is usually included in the price (less the rebate), but investors need to top that up to the full six per cent. Once you have rented the property for a year, you can apply for the GST New Residential Rental Property Rebate.

Remember, there are many closing costs that do not come under the builder’s responsibility. The Land Transfer Tax, Law Society fee, Tarion enrolment fee and utility meter hookups are a few. You will be asked to make an upfront contribution to the condominium’s reserve fund, which pays off in the long run when you consider the years of maintenance-free living you will enjoy. You also may have to pay some development charges, which might not be included in your purchase price.

Regardless of when you move in, you don’t officially own your suite until the condominium is registered. Until that happens, you will be required to pay a monthly occupancy fee to the developer. You may hear this referred to as a phantom or ghost mortgage. After the condominium is registered, you will pay the mortgage company directly. This can make a big difference to those who purchase a suite as an investment, because they cannot rent it until they own it fully.

Avoiding financial surprises is as simple as asking. Find out from your sales representative what to expect. Ask your lawyer. Talk to other condominium suite owners. Call the government. Log on to the Internet and do some searching. In the end, it’s up to you to be an educated consumer.

Linda Mitchell is Vice-President of Marketing, Highrise for Monarch Corporation. In 2005, Linda was presented with the coveted OHBA SAMMY (Sales and Marketing Member of the Year) award. In 2003, she received the Riley Brethour Award acknowledging outstanding and consistent professional achievement in residential sales and marketing. She can be reached at lindam@monarchgroup.net.

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