As many people know, at the moment (2019) in Toronto rent prices are at
all time highs. They are the highest in
all of Canada for that matter. The
average 1 bedroom condo in Toronto has reached over $2200 per month. Luckily for tenants the Canadian government has
made laws and regulations so that landlords don’t take advantage of tenants and
increase rent by ridiculous amounts every year.
This is referred to the rent increase guideline in Ontario. It has been in existence since 1991.
The guideline applies to most residential rental units which are covered
by the Residential Tenancies Act. The
purpose of this act is to provide protection for tenants from unlawful rent
increases and unlawful evictions. The
act has many other purposes but we are not going to get into that in this particular
blog as it is quite complex and lengthy.
If you like to read more about the Residential Tenancies Act click here.
The rent increase guideline does not apply to every single residential unit
out there, here are the exceptions:
Social housing units
Vacant residential units
Additions to existing buildings
And most new basement apartments (that are occupied
for the first time for residential purposes after November 15, 2018
So, for example if you plan to rent or are renting a commercial unit for
your business, there is no law to regulate how much the landlord can increase
your rent unlike a residential unit.
How is the guideline
The Ontario Consumer Price Index is used to calculate the maximum rent
increase landlords can legally do. It is
a Statistics Canada tool that measures inflation and many economic conditions
over a year. These include price
increases or decreases for food, shelter, clothing, transportation, alcohol and
many more. Data from May to June is used
to determine the guideline for the following year.
When Can A Landlord Increase A Tenant’s Rent?
Assuming that they don’t fall under the exceptions which I wrote above. The
rent for a unit can be increased 12 months after the last rent increase, or a
tenant first moves in. And before this
can be done the landlord has to by law give the tenant 90 days’ notice in
writing before this increase can take effect.
Previous Rent Increase Guidelines
Here is a chart that shows the percentage amount the rent increase
So, as an example if you are paying $2000 a month for rent currently, the consumer price index is 1.8% this year so your rent can go up $36 per month. So, your new rent per month will be $2036. Which is an extra $432 per year in rent that you have to pay. That is roughly buying a small coffee at Tim Hortons for every business day in a month. This is not a large amount to many people, however many seniors on a fixed income might be pushed out of their homes due to the affordability the rent increases can cause.
Ontario has set the 2020 Rent Increase Guideline in Ontario at 2.2%. This will be the highest increase since back in 2013 which was at 2.5%.
It is always good to know your rights and responsibilities if you are a tenant or a landlord renting your property. The Landlord and Tenancy Act has everything you need to know incase you are not sure of something.
It has been quite a year in the Toronto rental real estate market so far. Many media outlets have covered the updates this year and most of them were saying that we are in a bit of a crisis in Toronto and the GTA. Fair to say that because the the average 1-bedroom condominium apartment rent was $2,262 in Q3 2019, which was up 4.5% compared to Q3 2018. The average 2-bedroom condominium apartment rent was up by 4.2% over the same period to $2,941. These prices have increased 1.6% and 1.7% month over month. Toronto has the highest rental rates in all of Canada at this point in time, and I don’t think that will change any time soon.
Here is an infographic with Canada’s rental
prices by city so you can have a better understanding.
minimum wage is $14 per hour. A 40-hour
work week will gross $560, multiply that by 4 weeks and you will get $2240. Deduct income tax and living expenses you can
see that a single person making minimum wage cannot afford to live in a 1-bedroom
condo in Toronto. Many people are
resorting to living with roommates or their spouses to split the rent.
There are cheaper options available such as
basement apartments and shared accommodations and such but those come with
issues as you can read here.
Over the last 12
months, Ontario’s population grew by 248,002 or 1.7%, higher than growth of
245,930 during the previous year. Among the provinces, Ontario had the second
fastest population growth rate, after Prince Edward Island (2.2%). Canada’s
population grew at a rate of 1.4% over the period.
This rate of
population growth is causing an increase in demand for real estate in Toronto,
and there is a shortage of supply to fill this need which in turn is causing
the prices to increase.
Why People Don’t Want To Move
People who have
been living and renting for a number of years at the same home have no reason to
move in this market. What they are
paying now can be hundreds, if not thousands of dollars less than their
landlord can get for the same home right now if they moved out and rented to a
new tenant/tenants. So many tenants will
have to pay a much higher premium to get a similar property.
In Ontario there
is rent control, which is a system of rent regulation in Ontario which limits
the amount by which the rent paid by tenants for rent accommodation can
increase. It is calculated by using the
Ontario Consumer Price Index, a Statistics Canada tool that measures inflation
and economic conditions over a year. If
you would like to know more about it go here to learn
about the rent increase guideline in Ontario.
If you have or
can save for a down payment for a home it is always the best financial decision
you can make. Pay your own mortgage, not
When you purchase a condominium, there is a monthly fee payable
to the condo corporation. This fee is
made to cover the operating costs of the building. It is non-negotiable and is usually
calculated depending of the size of your unit and sometimes number of parking
spaces you own. Smaller unit owners in a
building would pay a lesser amount than owners with larger units. Not every condominium is the same and they
all differ as to what the condo fees include.
It is important to ask your Realtor or lawyer what fees are associated
with the unit you wish to purchase, so you won’t have any surprises. Every unit owner contributes common expenses
in proportions that is outlined in the declaration. This fee can include water, hydro, gas, common
elements, insurance costs. Cable and
Internet costs are almost never included in the condo fees. Any default in payment can result in a lien against
the unit’s owner (including legal costs and other expenses), which can be
enforced in the same manner as a mortgage.
Condo corporations are non-profit organizations, so they don’t
pocket any of the remaining condo fees that they receive. There is however a reserve fund that holds
extra money in case of an unexpected large expense that might arise, such as a
major repair and renovation. These funds
are collected from common expenses and must be held in trust. Its important to do your due diligence and find
out exactly how much the reserve fund holds.
If it doesn’t have much money in the reserve fund, if a major repair or
renovation needs to be done, every unit owner in the building will have to
cover the bill. This is called a special
assignment, when the repair cost exceeds the amount in the reserve fund, and the
remaining balance is billed to all unit owners.
Its always wise to get a copy of the status certificate. This provides a lot of information for the
buyer, it is a document containing information regarding the operational, legal
and financial dimensions of the condominium corporation. Anyone can request a copy and it must be
delivered within 10 days. The
corporation can also charge up to $100 for the certificate.
Here is a list of
what is included in a status certificate:
Corporations address, directors and officers
Statement of common expenses
Amount payable for the unit for common expenses
Particulars of any increase in common expenses
for the unit since the date of the current year budget
Statement concerning any assessments relating to
the reserve fund since the date of the budget for the current year
Information concerning any applications
regarding amendments to the declaration
Copy of current declaration, by-laws and rules
A listing of various current agreements
Owner compliance with current agreements
regarding modifications that relate to the unit
Particulars concerning the most recent reserve
fund study and the amount of the fund
Number of units leased
Certificate of current insurance policies
Any planned or proposed additions, alterations
or improvements to the common elements
Before making a firm offer on a unit, I would strongly
suggest reviewing the status certificate incase there are any major problems
with the condo corporation, such as if they are getting sued by someone or have
financial problems. As I stated before
in order to find out exactly what the condo fees cover and how much you will
have to pay, all that information will be showed in the status certificate.
If you have any additional questions, I would be happy to help you. You can contact me here
When any property in Ontario is changed hands there is a
Land Transfer Tax payable. This might
come to a surprise to many people as they are not aware of it. This tax is payable by the BUYER of the home
or property, never the seller. This tax
is payable on the closing day, the day which the transfer of title is completed
by your lawyer. If the property is
located in Toronto, there is an additional Toronto Land Transfer Tax to be paid
(I know it sucks). Most of the time,
this tax can be added to your mortgage and will be payable in monthly installments.
Ontario Land Transfer
price of home
title transfer fee
to and including $55,000
Toronto Land Transfer
Purchase price of home
Land title transfer fee
First-time homebuyer rebate
Up to and including $55,000
Full tax rebate
$55,000.01 to $250,000.00
Full tax rebate
$250,000.01 up to and including $400,000.00
Full tax rebate
$400,000.01 up to and including $2,000,000.00
$4,475 maximum tax rebate
$4,475 maximum tax rebate
To calculate your land transfer tax use my calculator here.
First Time Homebuyer
There is great news however, if you are a first-time
homebuyer you can qualify for up to a $4000 credit. The government sets out the requirements for
this rebate. You can find all the
Keep in mind when deciding to purchase a home, you will need to budget for the land transfer taxes.
Before putting your home on the market, there are many
things to do in order to make your home stand out from the competition. If you want your home to sell in a short
period of time, its important to make it look good to the potential
buyers. If your home is messy or
cluttered or has some sort of damage it will detract from the overall appearance. Here are the most important things to do:
Its important to maintain the appearance of your home from
the outside perspective, such as the lawn needs to be cut, leaves raked up, overgrown
bushes trimmed and grass growing from the driveway needs to be taken away. It can also help to do some gardening and add
flowers or bushes in certain parts on the property. The outside of the home is the first thing a
buyer sees, if it looks unkept and overgrown this will detract from the appeal
of the home. These are inexpensive things
to do, as you can even do it yourself without hiring a landscaper.
Even before the professional photographer comes to take
pictures of your home, it’s extremely important to clean your home. Your floors and carpets need to be cleaned,
windows in the home, corners with cobwebs need to be cleaned, kitchen stove,
fridge and sinks need to be cleaned, any dirty paint and walls should be
cleaned. When a buyer walks into your
home it should give an appearance that the house has been maintained. If things are dirty or smell bad, chances are
that buyers would prefer to buy the house that is cleaner. Its important to de-clutter your home, moving
things out of the way that don’t have to be there would be idea. Your large shoe collection can go in a closed
out of view, personal and family photos should also be removed as this will
make the photos of your home look more professional. As a rule the less clutter there is the
better your home will show. Cleaning your home is very inexpensive and
you can do it yourself.
Let’s face it, your pets make a mess of the home and stink
it up. Before anyone comes to view your
home its important to clean up the animal hair, kitty litter, dog/bird cages. Many people are allergic to animals so its
very important to try and make sure as much as possible is cleaned up. If you have a basement it would be ideal to
keep the animal’s things down there and not in the main parts of the house. Last thing you would want is someone having
an allergic reaction while inside your home.
When a potential buyer walks into your home, lighting is a
very important factor. If you have any burnt-out light bulbs or broken
light fixtures, it’s important to get them changed or replaced. Most
people don’t want to buy a house that is dark and gloomy inside or if they see
any light fixtures broken, they will automatically think there is something
wrong with the house. This could put up a red flag in the buyers mind
which you don’t want to happen.
New LED lights are ideal as they last almost a lifetime and are very
efficient which can bring down your hyrdro bill every month, its also a great
When there are major issues with your home it would be ideal
to fix those things before selling your home.
The basic things as your appliances, furnace, air-conditioning unit
should all be in working order. Majority
of buyers want a turn-key home to move into without having to fix or renovate
anything. If you have a leak in the roof
you should fix it before mold or other problems arise. A fresh coat of paint goes a long way in the
appearance of your home aswell. If a
buyer walks into your home that has obvious damage it might make them think
that there are other serious problems with the home aswell. Again, you don’t want this to happen when
selling your home.
As a general rule you want your home to show at its best, a spotless home will appeal to everyone and can give you the competitive edge over the other homes for sale in your neighbourhood. If you need additional guidance contact me here
Before you can get your keys to your new home there are many costs associated with the purchase. When you see an ad for a home which shows the asking price, that is not the total amount you will be expected to pay. When thinking of purchasing a home you will have to take these costs into consideration. Here is a breakdown of all the closing costs you will be expected to pay, most are one-time fees.
A property survey basically outlines property boundaries and setbacks. It will show any easements on the property, it will show if there are any shared driveways or any structures that are overhanging on the particular property. Some lenders will require you to provide an up to date survey. You can ask the homeowner if they have a copy of a survey, if they don’t you will have to pay as a buyer to get a survey for the property. Approximate cost for a land survey depends on the size and type of property which can vary. $200-$800
When making an offer to purchase a home its always a good idea to get a reputable home inspector to assess the home. A home inspection will determine if there are any minor or major issues with the home that need to be fixed. If you find problems with the home, you will be able to walk away from the deal. It is not mandatory to get a home inspection; the costs will be subject to the buyer of a home. Approximate cost of a home inspection is $300-$650+depending on the type and size of the home.
In some cases, your lawyer will recommend you acquire title insurance on your property. This insurance is optional and will protect you from any problems in the title of your home in the future. This means if there ever is a dispute over any part of your property such as title fraud, municipal work orders and zoning violations. Approximate cost for title insurance is $250-$400.
All lenders will require you to get fire insurance for the home you wish to purchase. Before they send any funds, they will require proof that the home will be insured on closing day. Approximate insurance rates per month range around $50-$200 per month depending of the value and size of the home.
critical illness, disability or job loss insurance (optional)
When setting up your mortgage you can consider getting insurance if for any reason you are injured somehow and are not able to work and produce an income. This will protect you to cover the costs of your mortgage while you are ill or disabled.
When any property in Ontario is bought and sold, when the title of that property is transferred there is a Land Transfer Tax payable to the government (certain situations don’t require a tax). If you live in Toronto, you will be subject to an extra municipal tax. If you are a first-time home buyer, you can qualify for a rebate from the government after paying this tax. To find out how to apply for the rebate go here. Approximate cost for this tax vary on the purchase price of your home, you can use a land transfer tax calculator here.
GST or HST
Newly constructed and substantially renovated homes may be subject to GST or HST. If you pay GST and HST, you may qualify for a new housing rebate. For more information about the rebate go here.
Mortgage and Housing Corporation Insurance
In Ontario if you have less than a 20% down payment, you will be subject to mortgage insurance. This is to protect the lender in case you default on your mortgage. This premium is added to your monthly mortgage payment. This premium depend son many factors which you can see here.
payments, Property Taxes and Condo Fees
Sometimes the owner that you are buying the house from has prepaid their property taxes or condo fees for the whole year. When you purchase the home, you will have to reimburse the seller for the amount that they had prepaid already.
When buying or selling a home the buyer and the seller must obtain a lawyer to handle the closing process. They handle title searches, utility searches and any problems that may arise through the process of buying or selling a home. The lawyer’s legal fees and disbursements are subject to GST or HST and range from $600-$2000 depending on how complex the transaction may be.
Before starting your home search, it is very important to be aware of all the closing costs involved when buying or selling a home. Contact me for further guidance.