According to TREB’s 2017 report, first-time buyers make up 47% of home purchases in the city of Toronto. If you’re one of those motivated first-time buyers who want to find a fantastic home but aren’t sure how or where to begin, here’s a simple guide to help you get started. For a more comprehensive, step-by-step “how-to” guide, please click here.
Best Neighbourhoods to Buy in Toronto
Toronto has approximately 240 official and unofficial neighbourhoods within the city with properties for first-time homebuyers. You can find centrally located downtown condos for less than $600K, and homes for under $800,000 in up-and-coming areas like Dovercourt Wallace Emerson, South Riverdale, Rockcliffe Smythe or Malvern. Emerging neighbourhoods with “affordable” options are still out there, the trick is being prepared to act quickly.
I wrote an article a couple months back about the Top 5 Most Affordable Neighbourhoods to Buy a House in Toronto.
What Type of Home to Buy
According to Genworth Canada’s 2017 survey, with average home prices reaching upwards of $800,000, first-time buyers in Toronto embrace condo living to break into the Toronto real estate market. If you can manage to save and/or get help from family, and your homeownership goals are to buy a house instead of a condo, I often recommend looking for a duplex or triplex with a basement apartment to rent out as an income suite.
Affording a Home in 2018
To get pre-approved for a mortgage, you will meet with a lender who will base your loan amount on your income, credit rating, debt, and down payment amount. In the GTA, first-time buyers pay a median price of $800k for their starter home. They’re usually a couple, with a combined yearly income of $125-150K, and 75% of them use their joint savings to pay for their down payment.
In Toronto, the minimum down payment you can make is 5% for the first $500K and 10% on the remaining amount. Houses that cost more than $1M require a 20% down payment. Keep in mind that you’ll also be paying the land transfer tax, lawyer fees, renovations, and adjustments. Want to know just how much salary you need to purchase a home in Toronto? Check out How to Afford a House in Toronto in 2018.
What You’re Eligible For
First-time buyers in Toronto are eligible for multiple tax rebates, including the Land Transfer Tax Rebate. There’s also the HST New Housing Rebate, which allows new home buyers to receive a rebate of 36% of the HST paid on the home purchase.
As long as you and your partner have never owned a home before, you may also be eligible for the First-Time Home Buyer’s Credit, a government program that provides a 15% income tax credit.
Want to take the first step on the property ladder? I’d love to help. Give me a call at 647-898-4663, or reach me by email at Alex@AlexBeauregard.com and we can get started.
Selina says:
Check out credit unions in your area. Most offer some form of a first time buyer program. They are also easy to deal with, in my experience.