Getting to that place in your life where you’re looking to purchase a piece of property can be very exciting but also, very expensive!
Whether this is going to be your first or tenth condo purchase, buyers should always be looking into how they can save on one of the biggest buys of their lives.
In this post, we’ll go over some of the most popular savings routes in the purchase of a condo in Toronto, no matter if its pre-construction or resale.
Decide on pre-construction or resale
If you can afford to wait or delay your purchase, a pre-construction unit could be the best route to savings. Usually, developers offer early bird buyers discounts on units in order to help finance the beginning or ongoing phases of construction.
There are some catches with pre-construction, including the wait and a larger down payment, which can be spread out along the building phases depending on your developer.
Generally, however, your unit will cost less than it would at the building’s grand or interim opening; you’ll be able to really set some savings goals with the three to four-year wait; and you'll get a larger portion of your property paid off before your mortgage kicks in.
Buying a resale unit will have a lower down payment with a higher price tag, overall.
Selling a pre-construction unit once the building is open for dwelling can show nearly automatic profits.
Location will inform your price
Next, you have to choose the location of both your building and the unit within the building.
You’ll find the most expensive properties wherever the housing demand is highest in your city. As a rule of thumb, units downtown will be $10k to $100k more expensive than comparable units in quieter neighbourhoods. In Toronto, this means that an average unit in the Downtown Core will cost you just shy of $1M, while a comparable unit in an area just west of that, in Liberty Village, will cost you around $300k less.
For the additional cost of living downtown, you can sometimes add another bedroom or a higher floor uptown.
Next, the location of your unit inside the building will change the purchase price as well. Generally, even if another condo has the same square footage, the unit will be cheaper if it’s on a lower floor, and doubly so if the view is obstructed.
Can you forgo the extras?
Though its recommended for the resale value of your property, forgoing a parking space and/or storage locker combo will save you money on the overall cost of your condo.
Forgoing the extras and going the route of bare bones ownership isn’t always advised by real estate experts who would point to certain investments that pay off come resale time, such as unit upgrades, parking spaces, and additional storage.
Do you qualify for any rebates?
Within the tax year of your purchase (and even before your purchase), you need to consult a tax or real estate professional and find out if you qualify for some government rebates. Combining rebates can get you a sizeable return on your taxes, thus cutting down expenses.
The following tax credits and rebates can save you on your closing costs or land transfer taxes, if you qualify, in Toronto:
- First Time Home Buyer Tax Credit
- GST/HST New Housing Rebate
- Land transfer tax refund
- City and provincial land transfer tax rebate
Many of these discounts will vary by municipality, so look into the specifics of your region for more accurate details.