Moving On Up? Costs to Consider
October 27, 2020
It’s been over seven months since the pandemic hit and most of us are working from home. Naturally, the more time we spend at home, the more we think about our space. No matter how big your home is now, you can always use an extra room or three. Think of the joy you’ll feel with all that extra space to bump around in, whether it’s a backyard for the kids, a separate room for a home office or that master suite you’ve always dreamed of.
Keep in mind that aside from the just price of a new home and creating a budget around that, there are a number of other factors to consider including all the costs associated with simply moving to a larger space:
- Cost of the movers
- Land transfer tax when purchasing
- Legal fees associated with buying and selling
- Potential discharge or porting fee from your lender for your current mortgage. (Depending on how your mortgage is set up, there may be a fee to offset the reduction of your new & lower interest rate depending on where you are in terms of that mortgage.)
- Real estate commission
The average buyer will spend around $13,000 with a move, on top of all of the above plus any new things you might buy for the property (will your old sofa really suit the new space?), some minor renovations and personalization of the space. That is the low end of the scale because it doesn’t even include hiring painters.
You may also have to take other costs into consideration. If you’re moving from one condo to a two bedroom plus den, your maintenance fees (calculated on square footage) will likely go up. Of course, this depends on the condo itself and the amenities, but it’s something to keep in mind in your budget.
Your utility bills are going to go up if it’s not covered by the maintenance fee. Hydro for a one bedroom may be $40-$50 per month, but it could be $60-$80 with a two bedroom, depending how cool you like it in the summer and how cozy you want to be in the winter.
If you’re moving to a new building, your water may not be included in the maintenance fee.
Water is definitely not included if you’re moving from a condo to a house. The cost will likely be under $300 per year unless you love taking long showers. You’re utility bills will definitely be higher. One reason is that you don’t get a metering company with a reduced rate, as you do in most condominiums, and you’ll be dealing directly with Toronto Hydro or Enbridge. If you have a gas bbq line or a gas fireplace, the costs can add up.
To save money, you can have an energy audit in your house. It will show you where you’re losing heat and what you can do to improve things. There are also incentives from the city to do this.
You also have to pay for your garbage bins and for garbage removal.
Your property taxes are also going to increase. If you’re moving within Toronto, it won’t be going up substantially unless you’ve bought a home on the Bridle Path. However, if you’re moving outside the city, you could be in for a surprise. If you’re living in home in Toronto valued at a million dollars, you will be paying approximately $6150 in taxes. That same home in Mississauga will cost you $8000. And in Hamilton, you’ll be paying $12,000 per year. Click here for more information on property tax rates.
You won’t have fixed maintenance costs, but you should budget for 2-3% of the cost of the home for annual maintenance. If the furnace or air conditioner needs to be replaced. It’s on you. New windows? You’ve got to pay for them. New roof? You guessed it, that’s your responsibility. You’re also going to need home insurance, which will be different from what you need in a condo.
The point isn’t to scare anybody from making a move, but it’s important to make an educated decision about the property you buy. A good real estate agent can give you all the information you need. If you have any questions about Toronto’s real estate market or want to start your search for a larger space, please give me a call!