If you’re looking to purchase real estate, the easiest part of the buying and selling process is identifying the house, condo or commercial property you wish to purchase. Everything else can be tedious. That’s why if you are looking to buy an investment property in Oakville, you should use the services of an Oakville real estate lawyer.
What you can expect in real estate investing
When investing in property, there are many things that a first-time real estate investor won’t know. Below are some key things to note.
Undisclosed fees: As a first-time property investor, it is likely that you will be presented with several unforeseen costs. For instance, some developers will present buyers with an attractive sales package promising a wave in maintenance fees for a certain period or a seemingly low purchase price. However, after signing on the dotted line, you might then be told about various fees that were never mentioned prior to the sales agreement being signed.
Taxes: When purchasing an investment property in Ontario, in addition to sales and property taxes, you must consider:
Land transfer tax. As a buyer, you must pay land transfer tax when you take possession of a property. Land transfer tax is charged on the purchase price and is calculated on a sliding scale.
Income tax on rental income. You will need to pay income tax on the money you make from renting your property.
Capital gains tax. When you sell your investment property, you must pay taxes on the profit you gain from the sale. Capital gains tax is charged on 50% of the profits, while the remaining 50% is added to your income and taxed at the regular income tax rate.
Real estate jargon: Real estate is full of jargon that can be confusing to the average person. Signing a real estate agreement without understanding all the terms may land you, the purchaser, into a binding contract that does not serve your interests.
Investing as a non-resident: If you are not a permanent resident in Canada, you can still purchase property or participate in real estate investments. However, there are additional requirements and guidelines you must consider.
For instance, there is a Non‑Resident Speculation Tax for residential properties purchased by non-residents in the Greater Golden Horseshoe Region. Also, if you are seeking financing, the minimum down payment is typically higher for non-residents.
Why you should hire a real estate lawyer
Real estate investing is one of the most significant financial steps you can take. It means then that you should seek to do everything correctly, and the best way to guarantee this is by hiring a property lawyer from the very start. Having a property lawyer working for you is a guarantee that you will have someone in your corner who will be looking out for your best interest. The skills and experience of a property lawyer mean you won’t sign an unclear sales agreement, be blindsided with unexpected costs or taxes or fail to comply with any government regulations.