Overlooked Costs When Purchasing a New Condo
Have you thought of everything?
It’s wise to put some money aside to handle the different bills you’ll be receiving when taking possession and during the first few months in your new home.
Upon Taking Possession of Your New Condo
Roughly two months before taking possession, we send an adjustment sheet detailing the different fees owners need to pay upon signing the deed of sale.
In addition to the remaining balance on your condo you’ll need to pay your condo fees for a few months, before the majority of condos are delivered. You’ll also need to contribute to the initial working capital fund (between $150 and $300) that the co-ownership needs to get things rolling (as it’s a new building, there is no money in the co-ownership’s account when it’s opened).
Notary fees can range between $1,000 and $1,700 before taxes, depending on the type of transaction and the price of the unit. You must also add the publication fees payable to the City of Montréal, which come out to $100 or $190 if there is no mortgage, and $235 or $375 if the purchase is being financed. The first amount applies if there is only 1 person on the contract; the second amount is applied to contracts with 2 or more people. The notary and publication fees must both be paid on the transaction day.
If your down payment is less than 20% of the entire value of your condo, you have purchased mortgage insurance from the Canada Mortgage and Housing Corporation. The premiums for this insurance are added to the amount of your monthly mortgage. However, the 9% tax on the insurance premium must be paid directly to the notary when taking possession.
As discussed in my previous blog post on the Transfer tax (sometimes called a ‘welcome tax’), the City welcomes you to the neighbourhood by sending you a bill to pay a few months after you take possession. The amount varies according to the price of your condo. For example, for a $200,000 property, transfer taxes are $1,750, and for a $500,000 property, the tax is $6,000.
You will also receive the municipal and school taxes for the current year, starting the day you sign the deed of sale. At the beginning of next year, you will receive a new tax bill for the year ahead. A full year of these combined taxes should add up to between 1-1.1% of the pre-tax value of your condo.
If you hired movers, you’ll have to pay them the same day. If not, simply offer free pizza and beer to your friends for helping you move!
In the Coming Months
Even if you already own most of the furniture you’ll be putting in your condo you may still want to put aside a little money to decorate. Chances are you’ll have to visit at least a few curtain and lighting stores. Some recent articles posted by my colleague Marie-France are helpful for finding places to help you decorate. Check out the following posts for some very useful advice: Picture Framing, Window Dressing and Lighting and Atmosphere.