Real Estate Investing In The Greater Toronto Area

Toronto is a city that has majority of the Canadian immigration population settling in. As much as 85% of all the immigrants come here in Toronto. As the potential in investing in Toronto is pretty high, one can always rely on making a return on investment from this city. However, there some things one must be always vary of when buying properties in the city of Toronto, either for investing or just merely buying property as an Asset to live or do business in.

The first thing one must know is the taxes involved in purchasing properties in Ontario. The first one is the LTT (Land Transfer Tax) which is charged in almost every transaction across the province of Ontario, where property is transferred from one owner to another. This tax does not apply to new properties. The total breakdown of the amount charged is in the chart below:

* $0 to $55,000: X 0.5 % of total property value
* $55,000 to $250,000: X 1 % of total property value - $275
* $250,000 to $400,000: X 1.5 % of total property value - $1525
* $400,000 and up: X 2 % of total property value - $3525

Home buyers in Toronto itself (excluding the other districts in the Greater Toronto Area) may need to pay additional taxes when transferring properties. The breakdown is stated below:

* 0.5% on first $55,000,
* 1% on next $345,000, and
* 2% on portion over $400,000 (For first time buyers, there is no need to pay the LTT if the purchase amount is or above $400,000)

Land Transfer Tax rebate is a program allowing a rebate of "all land transfers in the province of Ontario, payable up to $2000 (assuming the property purchased is a $227,500 home).

In order to be eligible, buyers must meet the following conditions:

* must be at least 18 years old
* must be first time home buyers and lived in the home needed to be transferred for at least 9 months after the date of the preferred selling and transfer.
* must never have owned, or had any ownership interest in, an eligible home anywhere in the world while he/she was a purchaser's spouse or same sex partner

The following properties are eligible for the LST credit:

* must be newly constructed
* builder of the home must be registered by TARION warranty corporation

Here are some restrictions on amount claimed:

* Between non-spouses, refund is reduced to the proportion of the qualified individual in the couple.
* Between spouses,it it would be the following: If one spouse is first time home buyer and the other owned a home before, but not since becoming a spouse of the first time home buyer, then the spouse who is the first time home buyer would claim the whole rebate

Other conditions for the LTT rebate are:

* Rebate can be received on day of registration at land registry office
* There is an 18 month deadline from the date that the transfer deal is registered, if applying for refund directly from Land Transfer Tax office.
* Qualifying tax payer or their solicitors can claim the refund immediately at the time of registration.

Then there are property taxes that would apply that one must pay yearly. The property tax really depends on where the property is located and thus it's market value. For a house that may cost about $500,000, the property tax could be around 1% to 2%. In this case the property taxes would be around $4,000 to $5000. These taxes must be paid yearly to the city where the property is located. The assessment of how much an owner must pay on his/her property is done by a government agency called the The Municipal Property Assessment Corporation (MPAC), which does it for the entire province of Ontario.

The second thing one must know are conditions in which properties are bought or sold. If you are going to apply for a mortgage, a good credit rating is crucial if you want to get the lowest interest rates on a mortgage. You will also find sellers, usually companies, that would sell properties on a lease to own basis. There are some companies would allow you obtain properties on a "lease to own" term even with bad or no credit. Besides the usual purchase mortgage, there is another type of mortgage which would be extremely easy for any individual with bad or no credit. It is called the "automatic assumable mortgage". In this type of mortgage, the seller can transfer the unpaid amount of the mortgage directly to you, thus then making you the owner and payer of the mortgage. This type of mortgage is usually popular with investors.

A property owner can also claim rebates on their property taxes at the end of each fiscal year. The PTC (Property Tax Credit) has been initially put in place for low or medium property owners and tenants. One can go to the Ontario's Ministry Of Revenue's website to get further information

Finally, you must know that prices in the heart of Toronto are extremely expensive as compared to properties on the outskirts of the city (or the Greater Toronto Area). The suburbs would be slightly cheaper. However, due to the demand of properties, the city is among the highest ranking in property prices. But it also an enjoyable city to live with lots of life and opportunities, and thus creating a huge demand on property purchase.