The housing market in Toronto is hot, and first-time buyers may be looking elsewhere in Ontario to purchase a home. Anyone looking to buy real estate in the city can expect to pay between $700,000 and $800,000 for a condo or single-family home. A detached home can run over $1 million. While the province is doing what it can to encourage first-time homeowners, recent actions by major banks may seem counterproductive.
Recently the province offered a generous refund on land transfer tax. Anyone paying over $368,000 for a home would receive a rebate of $4,000 instead of the previous $2,000. The refund was intended to help those who may be struggling to make that first purchase. However, just days later, two major banks raised their mortgage interest rates. While interest rates are still generally low, the hike in rates may feel demoralizing to some house hunters.
Currently, prospective homeowners need a 5 percent down payment on the first $500,000 of the price of a home, then another 10 percent down for the amount over that. On a typical house, a buyer may need over $50,000 down. Nevertheless, the land transfer tax refund is viewed by many as a nice gesture, and that even a small amount of money saved can make a difference. However, they suggest that real help for a new homeowner might come in the form of reduced electrical bills or home taxes to allow a comfortable cash flow.
A person may feel overwhelmed with the complexities of purchasing a home in Ontario. The process can be long and frustrating, involving details that may seem foreign and confusing. Having a dedicated real estate lawyer can make all the difference for a first-time buyer.
Source: metronews.ca, “First-time home buyers in Toronto face stressful economics”, Nov. 15, 2016