In most provinces the tax is calculated as a % of property value, using asking price as a close estimate. Homebuyers in Montreal, however, also incur an additional municipal tax.
To help offset the unwelcome cost, Ontario, British Columbia, Prince Edward Island offer land transfer tax rebates for first-time homebuyers
When shopping for a new home, the first step is to figure out how much you can afford. Affordability is based on the household income of the applicants purchasing the house, the personal monthly expenses of those applicants (car payments, credit expenses, etc.), and the expenses associated with owning a home (property taxes, condo fees, and heating costs). The calculator below will show you the maximum purchase price that you can afford.
You also need to determine if you have enough cash resources to purchase a home. The cash required is derived from the down payment put towards the purchase price, as well as the closing costs that must be incurred to complete the purchase.
Mortgage default insurance, commonly referred to as CMHC insurance, is mandatory in Canada for down payments between 5% (the minimum in Canada) and 19.99%. Mortgage default insurance protects lenders if a homeowner defaults on their mortgage.
Although mortgage default insurance costs homebuyers 1.75% – 2.75%1 of their mortgage amount, it is actually beneficial to the buyer market. Without it, mortgage rates would be higher, as the risk of default would increase. Lenders are able to offer lower mortgage rates when mortgages are protected by default insurance, as the risk of default is spread across multiple homebuyers.
On July 9th, 2013, the Canadian government made 2 key changes to CMHC insurance regulation:
1. CMHC insurance will not be available on homes >$1 million, requiring purchasers to put at least 20% down.
2. The maximum amortization period offered on CMHC-insured mortgages is 25 years.
Use this calculator to compare options for renting or buying a home. Shows the Break-Even annual increase in a home value.