Hidden taxes
 

Hi all,

Ive just come back from my recce trip of GTA and Whitby and so far no real red flags for coming (but not many super green ones either) one thing got me thinking when I found out that tax (our vat) is not shown in selling prices will this happen on anything you buy. So the question is if i see a house advertised for say 400,000CAN what extra costs are involved in this transaction eg taxes, payments to lawyers, agents etc .

Just a side line


On a secondary note if I have to wait 3 years to get in with 20 years experience as an electrical engineer and an engineering degree how do all these people who can just about string 3 words of english together who work in all the hotels and shops get in. :confused:

Re: Hidden taxes
 

Let's deal with your secondary first. Many of them come on family class.

The VAT thing you will get used to. It's not really hidden because people know that stuff they buy will cost X% more than it says on the label.

If you buy a house you should not pay a fee to the agent. They are paid by the sellers. There will be legal fees but they won't be huge because lawyers don't do much of the process. Taxes will vary from province to province.

Re: Hidden taxes
 

Annual property taxes (think council tax) is usually about 1 to 2% of the assessed value of a house, and is often part of the mortgage payment...the tax is then paid to the township by the mortgage company, after all they dont want their co-lateral taken by the township for non payment of property taxes. So that could be a few hundred on your calculated payment every month. Other wise its quarterly or annual lump sums to account for.

When you buy the house there is a land transfer tax, like stamp duty, but not nearly as much. So many% of the first $X, and so many % of the next $Y type deal. Varies from province to province.http://www.relocate-canada.com/landtax.htm

You may or may not need a new survey to satisfy the mortgage company...probably not, and lawyers will take $500 to $1000 for their services during the transaction.

Thats all I can think off

A report from a home inspector is money well spent...as long as you get the right inspector. Thats usually less than $500, and could be worth it in reducing the selling price on waivers, as well as for peace of mind..

Realtor for the buyer is paid by the sellers agent, so that wont cost you, but when you put an offer in you will have to pay a nominal deposit to show good faith. Usually less than a grand.Once under offer you cant be gazumped.As a qualified engineer you should be able to land a job and come on the work permit route and then leverage that to PR with a bit of effort. Only a small proportion of immigrants are skilled worker (<40%?), many are family class. Many "second generation" immigrants born here, are raised in largely non-english speaking environments too, which doesnt help the communication barrier, but thats part of the "charm" of the GTA for you, they were not necessarily immigrants, could well have been the children of immigrants, or refugees. If you dont like it its a great big country. Bare in mind as a skilled worker, hopefully you will be earning a lot more than minimum wage hotel workers, and hopefully have a rather more opulent lifestyle as a result.


You get used to the whole tax on top thing. If anything its less of a hidden tax because you think about it everytime you go to buy something. At least at 14% in Ontario its less than VAT in the UK, even if its perhaps more widely applied to a few things VAT is not. In my experience overall tax burden in Canada is a fair bit less than in the UK.

Re: Hidden taxes
 

You assume they're immigrants. I don't think that's necessarily the case.

Buying a second-hand house in the GTA cost me about $8,000 in various fees. I think new ones are subject to GST so that'd be $8,000 + 6%.

Re: Hidden taxes
 

The GST on new houses is usually hidden in the sticker price though isnt it? At least thats what an eminent realtor who posts here told me...I think?

Re: Hidden taxes
 

I'm not sure. I've never bought one.

Re: Hidden taxes
 

Not all, obviously. I'm prepared to believe that there are people born in the GTA who speak little or no English but they must be in a tiny minority.

Wanna sofa for the new house?

Re: Hidden taxes
 

I, otoh, can't believe that most of the people I meet are immigrants.

Bring the sofa around and I'll take a butcher's.

Re: Hidden taxes
 

Me neither, so I suppose its worth asking if you are in the market for a new house I guess.

Having said that new houses in the GTA are all God awful cookie cutter things standing shoulder to shoulder 18" apart with no yard, so why you would want on is beyond me. Either that or at the country club / gated community end of the scale they are so expensive that another 8% will make no difference in the great scheme of things, ...if you have to ask you cant afford it anyway.

Re: Hidden taxes
 

Appropriate choice of word. Butchery was certainly on my mind last night.

Re: Hidden taxes
 

When we bought our house we paid an additional $850 for lawyers bits and pieces, no realtor costs as the seller pays. We also have to pay the equivalent of council tax which for our house is just over $3k per year, payable in three installments. Obviously there is also the house insurance on top of this.

Re: Hidden taxes
 

But insurance is cheap/negligable. I think I pay about $500 per year, while the property tax is about $6000.

(Allstate Insurance)

Re: Hidden taxes
 

I generally tell people to allow 3-4% of the house value for closing costs.

New homes are subject to GST, most home it is included, but always check as it is not a hard and fast rule.

Deposits, if you are not in competition on a house, and it is a slow market you can get away with a small deposit, with the way the market is here in Winnipeg in the sub $200,000 price range, a deposit cheque of less than 5% of the house value will normally be rejected or countered.