Buying or Selling a Home in Ontario?
Ontario is a great place to be buying or selling a home for a number of reasons:
1. Ontario has one of the most advanced land registration systems in the world, so
titles are relatively easy to search and transfer. Many of the title transfers are done
electronically, although some areas have not yet been converted to the electronic system.
2. Title Insurance is available in Ontario through at least 4 separate insurers in addition to
the old method of solicitor certification. For the most part title insurance provides broader
protection at lower costs, and is especially useful in protecting against title fraud.
3. Ontario has competent, well regulated professionals including lawyers, bankers,
mortgage brokers, and home inspectors that service the home sector. Of course there are
always unscrupulous professionals, so take care in selecting the professional that you will
4. The costs of buying, selling and owning a home in Ontario are very reasonable.
Mortgage rates have been at near record lows for the last three years; mortgage brokers
are usually paid by the lender for finding the best mortgage rate for the buyer, and legal
fees and disbursements are reasonable in most areas due to competition.
5. Ontario has a protection plan for new home buyers to protect against unscrupulous
vendors called Tarion. It provides warranties to new home buyers that protect them
against certain problems that might arise in the future.
6. Ontario has mortgage insurance programs designed to help people with little or no
down payment when buying homes, by allowing them to qualify for mortgage loans they
would not otherwise qualify for. Zero to 5% down payments are possible.
7. For U.S. residents and other non-residents of Canada, there are no penalties or hidden
taxes when buying, but there may be capital gains taxes that must be paid on the sale if
you have not become a resident of Canada.
If you are buying a home for the first time in Ontario, you’re probably more than a little nervous.
Don’t be; thousands have done it and survived. You can too!!
The process is as simple as 1,2,3. First, find a house in your price range. Second, sign an offer
that protects you and that is acceptable to the vendor. Third, close the purchase and move in.
We recommend that you get informed about the process and surround yourself with a good team
who can deal with all of the issues and problems that may arise in the case of finding and buying
the right home for you. In other words:
1. Get informed. Canada Mortgages and Housing (CMHC) has a great website for new
home buyers called Homebuying Step-by-Step: A Consumer Guide and Workbook,
which is highly recommended.
2. Get a good Real Estate Agent who will take the pain out of finding the right house in
the right location at the right price for you. Make sure you know who the agent is
working for (you, the seller, or both).
3. Get a good Mortgage Broker who will “shop” your financial information to get you the
best mortgage with the best rate, without any cost to you. They can pre-qualify you for a
mortgage so you will know how much you can afford.
4. Get a good Home Inspector who will inspect the home you wish to buy and provide you
with a report of any defects, difficulties or problems. Understand that most home
inspectors do not provide any opinion about things they cannot see such as piping or
wiring behind walls.
5. Get a good Lawyer who will “quarterback” your purchase and coordinate you and your
team to a smooth closing. He or she will also provide you with assurance of good title (by
way of his/her opinion or title insurance). If asked, the lawyer will review or prepare
offers to purchase and will ensure that clauses designed to protect you are included (such
as conditions for financing, home inspection, etc.).
Things to Watch Out for
Home buyers in Ontario should be aware of the following:
1. “Buyers Beware” is still the law in Ontario, with certain expectations, so be sure to
check the home you are planning to buy very carefully. Also insist on the Vendor
delivering a completed and signed Vendor Disclosure Statement before you offer to buy.
In other words, be sure to do your due diligence investigations.
2. Land Transfer Tax (“LTT”) is payable by the buyer on registration of the transfer.
LTT is a percentage of the purchase price for the home: One-half of a percent on the first
$55,000, one percent thereafter to $250,000 and 1.5 percent thereafter, and an additional
tax of one half of a percent for lands value at more than $400,000 if it contains one or two
single family residents.
3. In Ontario, agreement respecting land must be in writing, signed and witnessed to be
enforceable. Be sure the written offer includes terms, conditions and warranties
respecting everything that is important to you.
4. Fixtures and Chattels. Fixtures are attached to the lands; chattels are not, but there is
confusing case law on the issue, so “when in doubt, spell it out” in the contract. For
example, a dishwasher may appear to be a fixture, but it may not be, so stipulate in the
Agreement that it is a fixture that is included in the purchase.