Oops! Forgetting closing costs for multi-family?

By way of an example, Christopher Seepe examines the closing costs for buying a multi-residential property in Toronto

If you have not purchased a multi-residential property before, especially in Toronto and especially if the number of units is greater than six, you may be surprised by the myriad costs involved.

In southern Ontario, traditional lenders generally consider a four-plex or smaller to be a residential transaction, while six or more units in a property is considered to be a commercial transaction, the latter usually bearing more expenses.
Here is a list of some of the types of closing costs you could expect to pay. The prices are approximate and will vary wherever you are. This list is for a purchase of an 11-unit apartment building in a city outside Toronto (hence no Toronto Land Transfer Tax). The zero-dollar values are costs that might arise, depending on the deal structure and financing.


The cost of buying a multi-residential property
HST on purchase price    $0
Ontario commercial Land Transfer Tax    $11,775
Toronto commercial Land Transfer Tax (could be an additional $11,000)    $0
CMHC insurance premium    $32,110
CMHC premium PST (8%)    $2,568
1st mortgage prepayment penalty    $0
CMHC credit2    $0
CMHC application fee    $1,650
Insurance consultant     $340
Government registration fees    $0
Survey (no survey usually covered by title insurance)    $0
Incorporation4 (of numbered Ontario company)    $1,065
Phase I Environmental Assessment5    $1,840
Mortgage application    $0
Lender's inspection fee    $250
Lender's legal fees    $4,100
Existing mortgage assumption fee    $0
Mortgage Commission    $6,760
Building Inspection    $750
Legal (your lawyer’s fee for the work, not including fees on the Statement of Adjustments, below)    $2,800
Title Insurance    $980


Statement of Adjustments and Legal Disbursements    $2,059
•    City Tax Certificate    $60.00
•    Zoning reports    $122.00
•    Engineering reports    $0.00
•    Sheriff's certificates (depends on # of names)    $56.00
•    Registry office searches (depending on the complexity of the purchase and # of documents)    $300.00
•    Utility searches (depends on # of open accounts)    $75.00
•    Register deed    $72.00
•    Register Mortgage    $72.00
•    Copies/fax/postage/courier    $0.00
•    Elevators    $42.00
•    Corporate searches    $0.00
•    Fire    $63.00
•    PPSA (Personal Property)    $30.00
•    Electrical safety    $53.00
Mortgage Interest Adjustment (if any)    $0
Mortgage Insurance (if any)    $0
Other     $0
Co-op Brokerage Commission received    $0
Listing Brokerage Commission Paid    $0
HST on Commission    $0
    
Final Tally: About  $70,000


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