For the first time condo buyer in GTA that is ready to move on with their life and purchase their first home, the task can be daunting. If you’re going into the process blindly, you probably have no idea where to start and especially do not know what to expect. Sure, it can be scary but you don’t have to go it alone either! LJM Tower is here to fill you in on what to expect as you go through the process of purchasing your first home. Below are a few of the best tips to know as you go forth on this new venture!

First time homebuyers tax credit

First time condo buyer in GTA? Then you will be eligible for a first time homebuyers tax credit! According to the Canada Revenue Agency (CRA), as long as the buyer intends to occupy the home no later than one calendar year after acquisition, the buyer is eligible for no more than $750 in tax credits. You don’t have to do anything extra either as it’s as simple as claiming the tax on your federal tax return.

Condo Buyer Tips

What are the condo fees?

You may also know these as maintenance fees, but they play the same role. Condo fees are typically billed to condo owners every month, and cover a plethora of items such as window washing, lawn care, repairs to common areas, snow removal in the winter, painting in the spring/summer, and so on. They don’t only play for making the property look nice, though. In the event that the building needs major repairs – such as major HVAC repair – the condo fees pay for these repairs so you don’t have to. Fees are calculated via the assessed value of your unit; National Bank of Canada notes that if your unit’s assessed value is 7%, you’ll contribute to 7% of the total condo fees.

Note that paying condo fees are not optional and are required by law. The continued prosperity of the condo and its tenants depends on everyone paying their fair share. Canadian law is so

serious about this that failure to pay condo fees could result in losing your unit. To ensure this does not happen, ask your real estate agent what your unit’s assessed value is and how much you can expect to pay in condo fees monthly.

Consider pre-construction to save money

If you do not need to move into your condo anytime soon yet still want to buy for the right price today, consider purchasing a pre-construction condo unit. You could actually save a lot of money buying a pre-construction rather than waiting until people move into the building. For example, if you buy a unit during pre-construction, the amount you’re going to pay on condo fees will be less since there will be less maintenance; Rate Hub suggests that you could save a lot in the first decade even. Some developers also offer exclusive offers and sign-on perks that resale buyers won’t get later down the road; most of the time, buyers can get away with paying for their down payment much later than if they purchased a resale. LJM Tower is actually in the pre-construction process right now, so if you’re looking for your first condo reach out to us to see if we’re a good fit for your first home.

Understand the mortgage stress tests

Can you handle the mortgage stress tests? Not sure what it is? It’s an important hurdle to overcome before deciding if now is the time to be a first time condo buyer in GTA. Qualifying for the stress test means proving that one can still pay for their mortgage and the costs of life at an inflated interest rate. This ensures lenders that if a borrower faces a financial dilemma, they are still going to be able to pay for their mortgage and continue maintaining their same quality of life. Fail the stress test? You may want to look for something that costs less.

Fees, taxes, fees

Did we mention you would have to pay fees? We joke, but the amount of extra costs associated with buying a unit surprises so many first time condo buyers. In addition to throwing down a down payment (5% of the purchase price for $500,000 or less), you will have to spend a land transfer tax (though first time homebuyers may be eligible to at least part of a refund), legal fees, home inspection fees, and closing costs just to name a few.

Is a first time condo unit right for you? Then we want to talk. Reach out to LJM Tower today, and let’s discuss whether we’re a right fit for your first home!