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Land Transfer Tax Rate
 

The last Land Transfer Tax rate increases were announced by the Ontario Treasurer in his May 17, 1989.  The rates of tax are increased only where the value on consideration exceeds $250,000. In summary, the following rates will apply effective June 1, 1989:

     (A)    Amounts up to and including $55,000 -- 0.5%
(B)    Amounts exceeding $55,000 up to and including $250,000 -- 1.0%
(C)    Amounts exceeding $250,000 --1.5%
(D)    Amounts exceeding $400,000 where 1 or two single-family Residences exist (as defined in the Act) -- 2.0%

The following examples illustrate the application of the new rates:

(1)  Conveyance of property for $95,000
                       0.5% of first $55,000         = $275.00
                       1% of remaining $40,000   = $400.00      
                                                                $675.00

(2) Conveyance of commercial property for $350,000
                       0.5% of first $55,000                = $275.00
                       1% of next $195,000                = $1,950.00
                       1.5% of remaining $100,000      = $1,500.00
                                                                       $3,725.00

(3) Conveyance of property for $500,000  
                       5% of first $55,000                = $275.00
                       1% of next $195,000             = $1,950.00
                       1.5% of next $150,000          = $2,250.00
                       2% of remaining $100,000     =  $2,000.00       
                                                                     $6,475.00

The above information has been provided as a reference ONLY and should be verified in writing from the appropriate government agency.

 

Important Information When You Buy a Condominium Home

Protecting  any  investment in real estate is especially important for the first time Purchaser.

Your lawyer is there to help guide you to know  the legal issues involved in buying your home and make you feel secure …no less nor more then your accountant, mortgage broker, bank manager about financial matters and your real estate professional about the market value of the subject property. Do not under value  a professional real estate agent  product knowledge and the skill  to get an Agreement.  Unfortunately LAWYERS bill by the minute as do Chartered Accountant. Their advice is not free and not based on a sales commission. After all is said and done the fact remains Will I own my new home?  A good lawyer/accountant may be able to give advice about who should officially own the property, what kind of mortgage you should get and many other decisions that have to be made when buying real estate. Your real estate professional today is highly qualified, most holding one or more university degrees. The new Real Estate Council  Of  Ontario, a governing body set up by the provincial government (1999)  has established new minimal educational standards and a continuing educational program. Today most professions have  governing bodies to assure ethical standards are adhered to and protect the public, in real estate that means the Purchaser and Vendor.  All professionals involved in the process purpose is to assist your goal to help guide you through the buying process smoothly. Referral business is very IMPORTANT! The ultimate decision is always yours.  You hire the lawyer, the accountant and engage the real estate agent. Do not under value  a professional real estate agent  product knowledge and the skill  to get an Agreement. 

There are basically three (3) different ways in which your CAN protect your ownership interest in your  purchase of real estate. It is important that YOU takes the time to understand these options.  In the Purchase of a condominium the process is much easier because one does not need to concern themselves with either the heating , electrical or plumbing systems  or leakage of the roof etc. as buyers of traditional wood/brick frame homes. Access to the Condominium Corporation ‘s Estoppel  Certificate and by-laws for the most part are governed by the Condominium Act and therefore there is usually less risk in transferring Title.

An “Offer”   to purchase real estate is a contract that is binding on both you, the Purchaser and on the Vendor. Seeking professional assistance before you sign any “Offer” can help avoid difficulties later on, for example, your lawyer, bank manager or real estate professional  can advise you to:

  • Include an escape clause via a “condition” that will allow you to cancel your offer if you decide you do not wish to proceed with the purchase. For instance, you may want to cancel your offer if you discover that there is a “Special Assessment” pending by the Condominium Corporation 
  • you were not able to arrange the mortgage you need,
  • or you were unable to sell your present home.

You need to plan for extra costs such as “ land transfer” tax, document registration fees, search fees, your lawyer’s fees, and monies that you will have to pay the Vendor for, for example,  check the statement of adjustments to ensure that you are paying only your share of the taxes, maintenance fees, utility and other costs that have been pre-paid by the vendor– none of which are included in the purchase price not to mention the costs to make the property your home…. Painting etc.

After the Vendor accepts your offer to purchase  your lawyer starts his work with a series of legal inquiries(fact-checking), such as, that it is correctly described in official documents and property registered, confirming that the present use of the property is legal, other legal acts include the · prepare (and check) mortgages documents and explain the terms of your mortgage; · explain the different between being joint tenants and tenants-in-common; · searches of records · to have all future bills addressed to you; · ensure that you have home insurance in place as of the closing date; · hold in trust your closing funds · arrange for you to receive the keys to your home as soon as possible after closing  and to make sure that, on closing you really will own the property and be able to live there with good and clear title.

Facilitating the buying process to assure GOOD TITLE:

·  Provide your lawyer with as much information about the property as you know .  One of the more important parts of your lawyer’s job is to make sure that you have good title.  Good title ensures that you really own the property, clear and free from any  previous claim or a lien to it that you do not know about and  Good title is essential for you to be able to sell your home in the future.

A  part of  your lawyer’s responsibility is to assure good title, which includes

· Checking that the person  selling you the condominium has a right to sell the property and that no one else has a claim to it or a lien on it; · consider survey-related issues; property encroaches (intrudes) on neighboring properties(not usually an issue with Condominium purchases,· contact the municipality to make sure that there are no work orders( again not usually  an issue in the purchase of a condominium) or any  problems that could affect the clear transfer of title to you. If the problem cannot be corrected, your lawyer  should explain to you the risks of taking title without it being “ clear and free”  and possible consequences. · Your lawyer will always be bound by professional rules that require him/her to act in your best interests.

There are 3 methods to assure you good title & it’s up to you and your lawyer to decide the ‘most appropriate’one in your situation.

OPTION 1: LAWYER’S OPINION ON TITLE

If you select this option, your lawyer will provide you with a Letter of Opinion which states your lawyer’s view of whether or not you have good and marketable title to your property. As well, your lawyer will provide you with a description of the results of the searches and inquiries conducted on your behalf, and will inform you in writing of any outstanding issues that may affect your title to the property in the future.

If a problem is identified after you have closed, you can only seek compensation from your lawyer if you can prove that he or she failed to do something that was legally required or provided legal services that did not meet the standards set by the legal profession. You may have to hire another lawyer to help you sue the lawyer and get compensation from the lawyer’s malpractice insurance plan.

OPTION 2: TITLE INSURANCE

Title insurance is an insurance policy that you can buy to protect your purchase if there is a problem with title.  The title insurance policy protects you against the loss that you suffer because of many title-related problems. Most title policies also cover your legal costs if your title is challenged.

OPTION 3: TitlePLUS

TitlePLUS* is a new system that includes both an insurance policy and an electronic process that collects information from lawyers who apply for a TitlePLUS policy as they proceed through the steps in a residential real estate transaction.

The TitlePLUS insurnace policy provides protection for both the title-related aspects of  buying a condominum/home and the legal services provided by your lawyer. It also automatically provides both you and the lender with coverage.

·  Read your insurance policy in full to understand the insurance protection that you are buying. Your lawyer can provide you with a draft of the policy. · Ask your lawyer about any items that are not covered (exclusions) by the title insurance or TitlePLUS policy before you make any  decisions. · Your lawyer may will ask you to sign an  Acknowledgement and Direction just before your  purchase actually closes.

BEFORE YOU HIRE A LAWYER TO DO ANY UNDERTAKING ON YOUR BEHALF GET YOUR INSTRUCTIONS TO HIM IN WRITING.! Your lawyer may will ask you to sign an  Acknowledgement and Direction just before your  purchase actually closes.  I suggest you sign IT and include the specific duties and specific information about your purchase you are requiring of the lawyer and the fees before any work is undertaken and that if the dollar (fee) amount is exceeded approval of the new fee amount must also be approved in writing prior to it’s expenditure.  Such a document will confirm your instructions to your lawyer and  protect both parties.

                                                                                                                                                                                                                                                                                                                                   
 
 
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