When buying a new home, there are often additional costs you may not be aware of. Today, we’ll give you the scoop on what builders may not tell you.
Let’s start by busting the myth that there’s a cooling-off period when buying pre-construction because there isn’t. A cooling-off period means that a buyer can change their mind and back out of the deal without penalty.
In B.C. homebuyers have a three-day cooling-off period after signing a contract to purchase a home. But when buying a house in Ontario, there’s no cooling-off period. The exception is when you’re purchasing a pre-construction condo. In that case, buyers have a 10-day cooling-off period under the Condo Act, in which they may back out of the sale.
The only other time there could be a cooling-off period is if the builder states it specifically in the Agreement of Purchase and Sale. If not, you’re committed to the deal as soon as you sign. So, make sure you’re making the right decision and go through all of the wording on the contract before signing on the dotted line.
Is There HST on New Construction Homes in Ontario?
Unlike resale properties, new houses in Ontario are subject to HST on top of the purchase price, with certain rebates available depending on the intended use … check with your accountant before buying. Although, if buying it as your primary residence, you should be in the clear.
Another thing pre-construction buyers may not realize is that there are many unexpected expenses when buying a new home that could vary from one builder to the next.
Hydro energization costs, charges for planting trees, or finishing your driveway are some examples that could be added to your closing costs. Make sure you’re checking the contract for these fine details. Better yet, have a lawyer review the contract first.
Sometimes there’s a clause under construction costs that states if costs to build are higher than expected, developers can raise the price a certain percentage or up to a certain amount. During the pandemic, when construction costs were skyrocketing, it wasn’t uncommon for builders to ask their buyers for more money.
Upgrading Through the Builder
Upgrades can be another costly trap. The model home likely includes all the extras, from hardwood flooring and granite countertops to a deeper basement and an oversized master bathroom. It’s easy to get lured into paying significantly more than the base price when adding upgrades. Even things like pot lights and electrical and plumbing rough-ins will cost you more, and keep in mind that many of those extras will cost you considerably less if you have them done after you’ve moved in.
If you want more information about buying a new or existing home, contact KT Realty at 1 (800) 617-0090.