Pre-construction
condos:
There are several costs involved with a pre-construction
condo:
Usually when you buy a pre-construction condo you put down
an initial deposit of 5% which goes into lawyer’s trust account. You could also
pay 5-10% on occupancy date. And a normal of 20-25% in the span of couple of
years until occupancy date. Here’s an example: say you buy a condo for
$300,000. You must pay out 20% in deposits over the next couple of years. 20%
of $300,000 is $60,000. That leaves $240,000 in unaccounted for funds for which
you need to get a mortgage pre-approval.
But one must not forget the following costs that crop up on
the day of your closing (ie. Possession date)
·
HST
·
Land transfer tax
·
Tarion enrollment fee
·
Property if pre-paid by developers
·
Development charges ( for development that
requires the passing of a zoning by-law
·
Occupancy fee (which is basically like your rent
because it is not added to your mortgage)
·
With condos, unlike houses, there are two
"closings". The first is called the "Interim Closing" which
occurs at Occupancy (when the Municipality authorizes people to actually occupy
the premises). The final closing is when you acquire title for the property and
you start your mortgage payments.
·
3 months common elements fee
·
Water and gas hook up fees
·
Disbursement, mortgage registration fees
·
Development fees, Tarion enrollment fees, and
water/gas hook up fees are all examples of costs that buyers incur when buying
pre-construction instead of going resale.
Please call/email me for more questions.
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