Off-Plan VS Existing Home
The first is the amount of capital occupied. The pre-completed projects generally only need to pay 10%-20% within 1.5-2 years of the housing price contract for exchange, and then pay 5-10% according to the loan situation when the house is delivered. The period of waiting for the delivery of the house does not involve the issue of monthly loans, and the dream of living in peace with a small investment is realized. These are the benefits of uncompleted housing. However, existing houses need to be loaned immediately, and often a down payment of at least 20% is directly required.

Second is housing prices. Generally healthy uncompleted houses are basically the same as the latest existing houses in the area, because the newer properties in the same area have higher prices. But in fact, you are buying a new house two to four years later. During the construction process, there will often be a reasonable increase in the housing price of the area, which is equivalent to investing in 15%-20% funds and enjoying this value increase without a loan. The existing house is directly purchased at the normal price of the area, immediately enters the loan, and enjoys the appreciation of the regional housing price with the investment of 20% funds and the payment of interest.

As a real estate investment product, off-the-plan properties have both real estate and investment characteristics. Its delivery period is long, usually 3-5 years, which requires investors to judge future price trends. Due to the huge investment leverage, if the judgment is correct, investing in uncompleted projects can bring huge profits.

Some non-ignorable costs of buying off-plan

There are two Closing dates for the delivery of the uncompleted apartment, one is the Occupancy Closing for the start of the turnkey move-in; the other is the Final Closing for the property delivery. The cost of buying off-plan also includes the following items:

1. Legal Fee

Because there are two closing dates for the completion of the uncompleted apartment, the lawyer will also charge two attorney fees accordingly. Attorney fees for Final Closing are the same as those for second-hand housing, while Occupancy Closing attorney fees vary from person to person.

2. Water/Hydro/Gas Meter Hook up Fee

The installation fee for each type varies from $150 to $400, which adds up to about $1,000 to $2,000. Most builders charge these installation fees during Final Closing. Buyers need to ask whether these fees are paid by the developer or by themselves.

3. Occupancy Fee

When the construction of the main structure of a building is completed and each unit has reached the habitability requirements of the relevant regulations, you can take the key to move in. This is Occupancy Closing. At this time, the title (Title) does not belong to you temporarily, which is equivalent to renting the developer's house. The length of this period depends on the size of the entire building, the floor of the unit purchased, and the efficiency of the government. For example, in a building with 30 to 40 floors, the time from the beginning of move-in to the final property right delivery for the units on the ground floor can be as long as 6 to 9 months, while the Penthouse on the top floor and the property rights delivery usually occur in the same time period.

The monthly Occupancy Fee required to be paid before the completion of the property rights usually consists of three parts: 1. The estimated land tax by the developer; 2. The management fee collected by the developer; 3. The interest on the balance of the house payment still owed to the developer . Interest is calculated based on the developer’s development loan interest rate.

4. Assignment Fee:

If you wish to transfer the house before the property rights are delivered, this is called Assignment of the uncompleted contract. This transfer must be approved by the developer in writing, and the developer may charge a transfer fee.

5. Education Levy and Construction Levy:

These two costs are subject to circumstances. When the developer started to sell the house, these expenses were calculated in the cost of the house. However, since the development cycle of uncompleted flats is usually 3 to 5 years, when the property rights are delivered a few years later, if these two government fees increase, the increase is usually borne by the buyer. In the original contract, it is usually stated that the buyer will pay for the additional costs that may arise, which means that all risks belong to the buyer. Experienced investors usually get a Cap Clause within 10 days of signing the contract to indicate the upper limit, which is used to protect themselves. But not all developers will agree to add. So when buying off-plan properties, be sure to ask the developer or ask your agent to help you contact the developer to see if you can Cap Levy.

6. Admin fee:

When signing the sale and purchase contract, usually you will give the developer's lawyer a few Deposit checks; after Occupancy Closing, you will issue a 12-month promissory note to the developer as the Occupancy Fee. If insufficient funds occur when the check is cashed, the bank will charge a handling fee, which can be as little as tens of yuan.

7. Developer's lawyer management fee (Lawyer society fee):

Some developers sell houses to hire a lawyer to complete the transaction, but ask the buyer to pay the lawyer's fee. So be sure to keep your eyes open.

You should also pay attention to the following when buying off-plan properties:

1. Understand the developer's background, reputation and past architectural history; also analyze the location, house type, design style of the real estate, whether the developer provides the upper limit of CAP Levy (including development fees and education fees, etc.);

2. Understand that the Ontario tax HST is generally included in the purchase price of uncompleted units. Ownership will have HST Rebate. Commercial use is not included;

3. For the purpose of investment, the value-added part of the uncompleted sale will be subject to VAT;

4. In addition, land transaction tax must be paid when handing over uncompleted projects. Double land tax within the city of Toronto;

5. If it is short-term speculation and speculation, the profit will be 100%taxable.

6. For related tax and accounting issues, please contact relevant experts for consultation, here is only a general reminder

The process of buying off-plan:

1. Research the floor plan, choose your favorite floor plan and floor range

2. Conditional on-site investigation or understanding of CONDO's location and geographical environment on GOOGLE.

3. Find a professional and responsible real estate agent to help you fill in the letter of intent to purchase a house Worksheet before the pre-sale of the off-plan to the platinum agent to reserve the ideal apartment type, no deposit is required (you only need to provide some basic customer information and: driver's license or other documents, address , Email address, phone number and occupation, SIN#, etc.), this step is the most critical, the popular small apartment or low price can only be won in time.

4. The developer informs that to sign the purchase contract, you must bring your ID card and bank cheque book because usually a deposit of CAD 5000 is placed in the lawyer's trust account. If you are overseas, you can sign a proxy agreement (POA), entrust your family, friends or brokers to sign the contract on your behalf, and some developers will require the purchaser to be there.

Buyers should also pay attention to the following when signing the purchase contract:
a. Check your name
b. Whether the floor and unit are correct
c. The amount of deposit and the time of payment
d. Are there parking spaces and storage rooms?
e. Can be transferred, transfer conditions
f. Is there a limit on development tax?

5. Generally, developers will require the bank loan plan approval documents to be provided within 10-30 days. It is recommended to do as soon as possible, because the contract has legal effect once it becomes effective.

Tips for adding rooms:

Buyers should also note that there will be Occupancy Closing and Final Closing after the uncompleted purchase. These are two different concepts. Between these two closings, there will be a period of time called interim occupancy, during which there will also be occupancy costs. Occurrence: Including the interest arising from the unpaid house payment during this period, the land tax that should be paid, the estimated public area management fee, etc. The lawyer will help calculate it clearly.