Cottage and Recreational Property Fee Quote
Our closing costs for real estate closings as set out herein is provided to you as an estimate only. With third party service providers increasing their prices at short notice or with no notice, it has become quasi-impossible for us to give you the usual "all inclusive" pricing for a real estate closing. Nevertheless, as usual, we endeavor to work with you to keep closing costs as reasonable as possible.
We thank you for your understanding and cooperation.
CLOSING COSTS ON THE PURCHASE OF RECREATIONAL PROPERTY /COTTAGE IN RURAL AREA
PERSONAL USE PROPERTIES
Our legal fees for acting on the purchase of a recreational and/or cottage property is $1,495.00 plus H.S.T. However, a customized fee quote may be required. This fee is for our services for providing you with an experienced opinion on the agreement, examine the buyer’s expectations and making such recommendations as may be warranted, conducting on and off title searches, reviewing any Environmental Site Assessments reports, ordering specific inquiries for recreational acquisitions and ensuring that buyer takes title to the property free and clear of any liens and encumbrances save and except for those specifically assumed.
DISBURSEMENTS SPECIFIC TO COTTAGES
AND OTHER RECREATIONAL PROPERTY ACQUISITIONS
Each purchase transaction is different, and each buyer may have his/her own specific requirements that must be met. Depending on the type of due diligence you wish to conduct, a full title search is usually mandatory. If you have a survey, a thorough examination of the land survey may be mandated. Other due diligence includes, but is not limited to, inquiry into compliance of the property with the building and zoning by-laws regulations, the fire code compliance, the Health Act, the Environmental Act, the Electrical Act, the Conservation Act, etc. We also recommend that inquiries be conducted to ensure that the property is not subject to restrictions under the Heritage Act or the Conservation Act. If the property is serviced by a septic system, we recommend inquiries into permits for the system and where there is a well, securing a water potability/bacteriological analysis clearance. Where the property abuts water, it is recommended that one secures confirmation that the property is not subject to flood plains and that any structures erected on the water (diving decks or docking decks for leisure or fishing boats) were built with a permit and in compliance with the Waters Act, etc.
MORTGAGE REGISTRATION AND OTHER SECURITY REGISTRATION
Where a mortgage is required, additional legal fees of $495.00 plus H.S.T plus disbursements will apply. Any other additional security other than a charge, will trigger additional fees of $295.00 to $395.00 for each form of security to be registered exclusive of H.S.T and disbursements (e.g. notice of assignment of rents, notice of security interest, PPSA registrations, etc.)
Disbursements are out of pocket costs that are incurred by the law firm in order to ensure that you and your lender have good title. These normally include title search through Teraview, execution searches, large wire transfer fees and other banking charges, fax, photocopy, courier, etc. Other non-included charges are conveyancer fees or other processing fees.
NON-RESIDENT SPECULATION TAX
Effective October 25, 2022 the Ontario government imposed an additional 25% tax known as the non-resident speculation tax (NRST) for purchase of properties without any geographic limitation. This tax applies to foreign nationals or foreign corporations. We will be required to file appropriate information in this regard on your behalf: https://www.ontario.ca/document/land-transfer-tax/non-resident-speculation-tax
A fee of $95.00 inclusive of H.S.T will apply to file the Prescribed Information for Purposes of section 5.01 Form (the “PIPS”). Where a Buyer is a non-resident, kindly be advised that additional legal fees in the sum of $450.00+H.S.T will apply to process NRST applications.
BAN ON PURCHASE OF RESIDENTIAL PROPERTY BY NON-CANADIANS
The Prohibition on the Purchase of Residential Property by Non-Canadians Act (the “Act”) prevents non-Canadians from buying residential property in Canada for 2 years starting on January 1, 2023. The ban prohibits foreign buyers from purchasing land, condos, single-family homes, or very small buildings in metropolitan areas of at least 100,000 people. https://news2me.crea.ca/2022/september-2022/what-you-need-to-know-about-the-prohibition-on-the-purchase-of-residential-property-by-non-canadians/
VACANT LAND TAX – “UNDERUSED HOUSING TAX”
The Underused Housing Tax is an annual 1% tax on the ownership of vacant or underused housing in Canada that took effect on January 1, 2023. The tax usually applies to non-resident, non-Canadian owners. In some situations, however, it also applies to Canadian owners. It is important to be aware of the status of the property, if you are a purchaser. The tax is a “municipal property tax”. Just like unpaid property taxes, it follows the property not the previous owner. Our Legal Fee to secure a clearance in your favor on account of the Underused Housing Tax is $99.00 plus H.S.T
LAND TRANSFER TAX
Please note that the formula for calculation of land transfer tax is as follows. Generally, for property valued between $55,001 to $250,000.00 land transfer tax payable is calculated as 1% of the purchase price less $275.00. For property valued over $250,001.00 the tax will be 1.5% of the purchase price less 1,525.00. Property valued over $400,000.00 will be taxed at 2% less $3,525.00. You can also calculate the land transfer tax payable by heading over to the LTT calculator found on the NLCI website. If you are a first time Buyer, you are entitled to certain first time home buyer rebates*. A fee of $250.00 plus H.S.T shall apply for processing the applicable land transfer tax refund forms for first time home buyers to secure Ontario Rebates to a maximum of $4,000.00 and metro tax rebates up to $4,475.00.
REGISTRATION OF DOCUMENTS
The Ministry of Finance charges a fee for all document registration. In a standard Transaction, you will be registering a Transfer/Deed of Land and a Charge/Mortgage of Land. The fee for each document is $83.11. If a power of attorney will be used, please include an additional charge of $83.11 for registration of the power of attorney.
Please note that title insurance on a purchase or refinance is required to prevent fraud or to protect you and/or your lender from any title related issues such as undisclosed encroachments, easements or building and zoning violations.
Costs of title insurance varies depending on the purchase price and the title insurer preferred by your lender. It is one time fee and will cover you as long as you own the property. Examining Counsel Fee, as may be applicable will further apply on the placement of title insurance and such fee will depend on the title insurance company selected.
Where the property being purchased is a rental and there are tenants being assumed and your bank/lender requires the registration of additional security documents such as PPSA, notice of assignment of rents, additional charges will apply. Please feel free to speak with us for a customized quote.
THIRD PARTY SOFTWARE CHARGE
Please note that effective January 2021, as a result of sudden recent significant hikes in software levy charges, we are no longer including software costs in our closing costs.
A software levy charge of $249.00 plus tax is now payable on all real estate transactions.*
TRANSACTION SURCHARGE FEE
The above fees apply for purchase and sale of residential resale properties valued less than one million Canadian dollars. Where the purchase/sale price is over the one million dollars threshold, a fee surcharge of $99.00 + H.S.T shall apply for each extra $100,000.00.
E.&.O.E We hereby reserve our rights to amend any fee quotes provided to you or posted on our website without notice. We apologize for this inconvenience and appreciate your kind understanding in this regard.