This city article is part of our full size guide: Buying a House

L.A. Real Estate – How to Buy

Los Angeles is a legendary city with incomparable opportunities. If you want to move here, it is probably a good idea to invest in real estate. There are of course many types of real estate, from apartments to condos and townhouses. Or houses, which is the possibility we dive into here. Much like buying an apartment, buying a house is a complicated process in general, complicated even more by municipal, county, and state laws. Rather look into something smaller? Buying apartment in L.A.

Most Expensive House in L.A. – Bel-Air Luxury Mega Mansion

The most expensive house on the market in the whole of the U.S. last year was the ‘billionaire’. This house also has the highest tax bill in L.A. It is a massive multi-million dollar house which is situated in Bel Air, and comes equipped with a Helicopter on the roof (you can even see it on google street view!).

The Billionaire is among the most expensive real estate in the whole of USA, and it also pays the highest taxes for any property in L.A. with a massive $1.4 mil. in taxes annually. It can be found at 924 Bel Air Road in L.A. It is worth $188 mil. and includes perks like the helicopter, the most expensive sinks you’ll likely see, along with a Louis Vuitton bowling alley, and a private art gallery.

• Style: Contemporary
• Location: 924 Bel Air Road Los Angeles, California
• Worth: $188 Mil.

Economy – Thriving for Startups and Creatives

The economy of Los Angeles is, as expected, of course heavily made up of the creative sector. It’s no coincidence that Hollywood is the largest movie making center in the world. Los Angeles was originally heavily agriculture and manufacturing, but nowadays, thanks to its fame and size, it has drawn other sectors. The most important economic sectors in Los Angeles are finances/business, technology manufacturing and innovation, fashion, and of couse movies. The economy of Los Angeles is actually so massive, that if it were a country, it would rank above most other countries in terms of GDP. It is marked by resilience to market changes and fluctuations.

• Creative, Tech, Finance
• GDP: $960.25 bil.

If you’re looking to invest in real estate, it’s probably good to think about forming an LLC, an S corporation, or a limited partnership!

Is it Worth Buying a House in Los Angeles? – Real Estate Market

Los Angeles has a massive housing market, for houses, as well as for apartments. In general, home prices are increasing throughout the city. That means buying a house will translate to a higher selling price, and therefore profit. Still what you get for $500.000 in L.A. now is probably less than what you get for $500.000 in Modoc County, not too far away, but Modoc County isn’t likely to become too popular anytime soon, so you’ll be selling it for the same price, while in L.A. you can expect at least a %10 percent increase in value over the next two years.

• Home Prices Increasing

Home Price Trends L.A. – Housing Market Development

Home price trends for the area are reported using the Case-Shiller Index, a statistic published by Standard & Poor’s forming part of an index of residential real estate market values. This index allows one to view the development of housing prices in the city.

Sales Volume for Los Angeles

The number of sales in Los Angeles is decreasing. That may be a worrying sign from outside looking in, but it’s not because people aren’t buying, rather it’s because there are few properties on the market. This also explains the rising costs, with limited supply, and high demand, prices are rising. At the moment, the average house in L.A. is selling within a super short 26 days.

Real Estate Market Explained

The real estate market in L.A. is neither sellers not buyers market. The past year saw an increase of 30% in single-family homes, as compared to last year.

• Increase in Sales

How much it Costs to Buy a House in L.A. – Median Sales Price

In Los Angeles County, which includes the less-in-demand outer regions, single-family homes are also gaining in prices. Below the list of median sales price, as well as the year-to-year change.

• Single-Family Homes: $660.000 | +12%
• Condos/Townhouses: $490.000 | +9%

The counties making up Los Angeles city, a.k.a. Greater Los Angeles, the prices are similar for single-family homes. Orange county sticks out for its high prices, and high increase in median sales price. San Bernardino takes the cake though, with a massive increase in 20% increase in median sales price.

• Orange County: $930.000 | +13%
• Riverside County: $490.000 | +15%
• Ventura County: $750.000 | +12%
• San Bernardino County: $370.000 | +20%

Is it Hard to Buy a House in L.A.? – Problems

As mentioned, the Los Angeles market is extremely competitive. That presents two probelms. For one, it may be difficult to find the home with the exact specifications you’re looking for. Even then, when you do find it, you’ll have to outbid other buyers which are likely just as keen on the property. That’s shown in the fact that only about 25% of Los Angeles residents can afford a house in the county.

Mortgage Rates – High with Interest

Mortgage in L.A. is a topic unto its own. These high prices also mean another thing of course, that a downpayment is not only a financial burden, but often also a burden too heavy to stem. The average downpayment in L.A. last year was over $100.000 for people buying a single-family residence. That means many people who need to buy a house, will either struggle to save up, or make large sacrifices to pay such a downpayment, or, potentially worse, make a smaller downpayment. This smaller downpayment leads to high mortgage interest rates, and of course principal mortgage insurance. With a home price of e.g. $700.000, the classic 20% downpayment is a hefty $140.000!

Taxes! Where to Pay and How

In L.A. your taxes are a complicated story. You may have heard an eclat about longtime homeowners paying significantly less in taxes than those with newly purchased homes. At any rate, there will be taxes when buying a house, as well as repeating property taxes.

More on L.A. taxes in our article on California Property Taxes.

How Much Money do you Need to Buy a House in L.A.?

There are of course a million ways to save money everywhere on your home. From saving on your taxes when buying a home to government programs, you need to make sure to take a look at the possible programs for you in your income-, cultural-, and geographical region.

We have a full-size guide on how to use tax breaks and deductions to your advantage:

Real Estate Tax Deductions

Saving in the City of Angels

For people who are not able to pay a full downpayment, there are many support programs. Real estate purchases are generally encouraged with incentives and support programs. The best are for first-time homebuyers, meaning that if it is the first time that you buy a full residence, you will pay less taxes, and have other monetary incentives. More on that in our main article on buying a house.

• Less taxes for first-time homeowners

In addition to these incentives and deductions, there are also programs such as veterans’ loans, or less costly mortgage programs for low- and middle-income buyers from Home Possible Mortgages. In Los Angeles specifically you can make use of ‘California’s First Mortgage Program’ and ‘First Home Mortgage Program’ given you are eligible. These provide finanical assistance and make the process much less financially risky.

Saving with Home Improvements

The planet is dying, and everyone has to do their part. That’s why many houses in L.A. nowadays are sold with eco-friendly upgrades already done. These inlcude renewable energy sources such as solar power, or other variants such as more insulated roofing or smart thermostats. Having these can cut down on your recurring costs.

• Eco-friendly = Wallet-friendly

What you Need to Know About Buying a House in L.A.

Buying a home in Los Angeles is costly, unless you know where to look. The commute is long, unless you find the right spots. All the ins and outs of such a massive city must be taken into account. These are the things that will make your experience of buying a home in L.A. more manageable.

It’s the Season – Spring

If you want to buy a house in Los Angeles, the time to do it is in the late winter to early spring. From January to March, the prices of homes are lower than the rest of the year, which means you can pay less for the same house that you would normally.

• Buy in Spring!

Location is Super Important

Which neighbourhoods in L.A. to buy in? The old realtors adage, location location location. In L.A. this holds true more than in other places probably. What you should know about where to buy is that some neighbourhoods are expensive and dangerous, others only expensive, and the best of all, affordable and safe. In L.A. you will probably want to stay away from south central, where crime rates are much higher than elsewhere. Additionally, you’ll be apying a location premium anywhere near the downtown core and the beach.

Get a Realtor!

In L.A., more so than in other cities, a realtor is your best friend. Or at least should be. The market is quite complicated owing to the high demand, ever-changing characteristics, and massive market. A real estate agent with experience in the area can guide you through these choppy waters and get you out safely on the other side.

Don’t Forget Additional Costs

This is a problem homebuyers face everywhere, but more so in L.A. Additional costs are always an unexpected burden on top of the already large price of the house. There’s a lot to delve into, so I defer you to our guide detailing all additional costs you can expect when buying a house

• Real Estate Purchase – Additional Costs

Renovating your Home – Beware of this

A major problem in Los Angeles is that of unlicensed professionals making unlicensed alterations to houses. These are usually cheaper, but when you’re buying a house, beware of these as they can come back to bite you. Another problem is, due to the weather and climate, sun damage, and depending on the location the salty air. These make for costly maintenance in the long run, and it’s a good idea, if you have to renovate, to spend a bit more and not have to spend again. Other common problems include ‘sinking’, as well as roof and plumbing issues.

• Common Problems: Roofing, Sun Damage, unlicensed work

Get Pre-Approved!

With such a competitive market a mortgage can be hard to find. Especially considering this mortgage principal is going to be larger than is usual. Therefore, pre-approval is vital. Not only does it give you security, and allows for you to plan better around what you can expect to buy, it also makes you more attractive to sellers. A mortgage pre-approval will make the whole process, from beginning to close worth it.

Process Explained – How to Buy a House in Los Angeles

The process in Los Angeles is the same as for buying a house in the whole of USA. In short you save up, find the people that will help you through the journey, find your future home, and close on the deal. More specifically:

1. Save up for the Downpayment
2. Find a Mortgage Broker
3. Get Mortgage Preapproval
4. Get your Team Together: Attorney, Real Estate Agent, etc.
5. Start looking at Listings
6. Go to Viewings
7. Submit an Offer
8. Close

How Long it Takes to Buy a House in L.A.

From start to end, the process is going to take a few weeks at least. The time can range anywhere from three weeks to three years, but on average you can expect about 6 months from start to finish. Some people search for years and fail to find anything. In the end, how long you spend finding a new house depends on how well-prepared you are. If you are financially responsible, have a lot of money saved, the process can be shortened, as your pre-approval will be easier to obtain, and you are able to financially outbid and provide security to sellers. In any case you should not rush it, as that leads to mistakes and misjudgements that can cost you in the long run

• 3 Weeks to 6 Years

Best Real Estate Agents in Los Angeles for Buying a House – Ranked

In a city as big as L.A. there’s going to be a whole lot of real estate agencies. If you want to buy a house in L.A. you will want the best real estate advisors and brokers available. Below a list of the top 8 real estate agents and groups in L.A. according to our research

1. Suarez Team
2. Park Regency Realty
3. Stephanie Younger
4. Pinnacle Estate Properties
5. Jon Grauman
6. Billy Wynn
7. David Yun/Eighty8
8. Rafael Gevorkian

Los Angeles City Explained

Los Angeles is made up of many neighborhoods and communities. These are difficult to count per se, because depending on your definition one thing may or may not count as a separate city, as a community, as a district, etc. What also complicates matters is the fact that Los Angeles county and the Los Angeles metropolitan area are two different regions. The Greater Los Angeles metropolitan Area is the largest metropolitan region in the Country, and is home to 18,7 mil. people.

• Pop. 18,7 mil.

Los Angeles’ Counties – More than L.A. County

The Los Angeles metropolitan area is mostly in Los Angeles county, although made up in total of five counties. The five counties which make up L.A. are Ventura County, San Bernardino County, Riverside County, Los Angeles County, and Orange County.

• Ventura County
• San Bernardino County
• Riverside County
• Los Angeles County
• Orange County

How Many Neighborhoods in Los Angeles? Map

There are over 200 neighborhoods in the Los Angeles metropolitan area. Again, this is difficult to pin down to an exact number, as definitions vary. Don’t forget Catalina Island, which is also part of Los Angeles County, and often counted as part of the city. Below a real estate map of Los Angeles, detailing the neighbourhoods.

What is the Downtown of Los Angeles?

When talking about a downtown, you expect a central business district. That means a place within the city with heavy economic activity, often in the form of a financial district, shopping, or similar. The city of Los Angeles has multiple of such districts. The obvious one, and largest, is downtown Los Angeles, with others including Downtown Long Beach, Downtown Pasadena, Downtown Glendale, and Downtown Burbank.

• Many Downtowns

L.A. Property Taxes – Explained by County

Los Angeles, thanks to its many counties, has very different property tax rates depending on the area. Property taxes are influenced by municipal and county administrations, therefore you can expect to have a headache trying to figure out your own property taxes in your location. Still though, one can compare, broadly, the property taxes by comparing the county-wide rates. Note that Riverside, with 0.97% has the highest property tax rate in Los Angeles, as well as ranking second highest in California property taxes. So, what are the property tax rates for Los Angeles counties?

• Los Angeles County – 0.75%
• Ventura County – 0.74%
• San Bernardino County – 0.83%
• Riverside County – 0.97%
• Orange County – 0.68%

Neighborhoods in LA – Venice to Glendale

What neighborhood should you move to? There’s something for everyone in this megacity, and you’re bound to find what you’re looking for. With so many neighborhoods, each offering up their own unique flair and identity, you won’t be hardpressed to find a location that you’re happy with. The neighborhoods to know for buying real estate are as follows

Mid-City – Residential Heaven

The place close to everything. You’re likely to find everything you need nearby, as well as avoid a long commute. With sales prices varying from less than $500.000 to over $2 mil. the price class leaves you deciding what you want to go for.

Inglewood – Hottest on Market

It seems L.A. real estate is all about Inglewood. It’s no surprise it’s the hottest tip in the city, because it’s close to the downtown, with currently very affordable prices and great amenities. Not to forget it’s so close to LAX, that you’re never going to have to rush for a flight again. Keep a lookout in the rising districts of Hollywood Park, Fairview Heights, Westchester/Veterans, and La Tijera. Lastly, it’s almost certainly a good investment, with the current construction of the stadium for the LA Chargers and Rams being a major draw in the future.

Ladera Heights – Up Next?

Situated right next to Inglewood, this neighbourhood will be the dark horse of L.A. real estate. While Inglewood is taking the headlines, you can be sure that Ladera Heights is also making big steps in becoming one of the hottest desitnations for real estate in California’s super-city.

Silver Lake/Echo Park – The Hippest

If you’re a young creative, I won’t have to tell you about silver lake, and its adjacent brother Echo Park. It’s the place for the hip young and cool in Los Angeles. Buying a home here will leave you not only certain of a high selling price, thanks to gentirfication and near-certain rising popularity, it’ll also have you happy with the amenities. Everything from shopping, to the coolest bars and resetaurants can be found in this piece of the city.

Der Beitrag Buying a House in L.A. – Guide, How-to for Los Angeles Real Estate erschien zuerst auf ℄ Real Estates.

With the conclusion of a purchase contract, the financing is already under the umbrella. The bills from the broker, notary, land registry and tax office come as soon as the loan is fixed. Because of this, the credit is often underestimated. Back to German Real Estate Overview.

Additionally, in the following there may be slight grammatical errors, as this article was written by a German tax expert. This does not detract from the quality of information.

What Percentage are Incidental Purchase Costs?

20% ancillary building costs should be included in the loan at least, in addition to the purchase price, and are quite realistic.

~ 20% of the purchase price

The 4 Biggest Additional Costs when Buying Real Estate

The overview shows the 4 largest additional costs you expect when buying a house. But what other costs are involved in building a house? Find out more here: House construction & the costs that come up.

Fees: Notarization of the Purchase Contract by Notary

The fees for the notary appointment are probably one of the largest items in the additional costs of the house purchase. The notary fees are fixed and may not deviate from these in any direction, but even these are quite high.

~ 1,5% of the purchase price

As a rule of thumb, about 1.5% of the purchase price has been set – and this only for the signature of the purchase contract. So if you purchase a property with a purchase price of 100,000 Euros, the notary’s fee is 1500 Euros, which, in Germany, is usually paid for by the buyer.

The exact fees for notaries in Germany are laid down in the notarial fee schedule, but can also be calculated online.

• Read more here: Notary and Purchase Agreement

Taxes: Real Estate Transfer Tax

As soon as the contract has been signed at the notary and the purchase agreement has been notarized, the buyer will receive mail from the tax office. Next, the purchase tax is demanded from the buyer.

This is incurred somewhat differently. Normally it amounts in Germany round about 3% – 6% of the purchase price of the real estate. Since the land transfer tax is a state tax, meaning each state determines their individual rates land transfer tax rate.

In some federal states, however, such as Hamburg, Berlin and Saxony-Anhalt, it is 4.5% of the property purchase price. For a purchase price of 100,000 euros, for example, you therefore pay another 3500 / 4500 euros for the land transfer tax.

Reading tip: Get to know tax planning options, from cooperatives to family foundations: Save taxes with real estate

Purchase price 100.000 Euro

This debt should be paid immediately, because only when the amount has been received by the tax office will the latter issue the so-called clearance certificate. This certificate is mandatory for the transfer of the new owner to the land register. This is arranged by the land registry office and costs again fees, which are comparatively low.

3.5 – 6.5% of the purchase price

Commission: Brokers Calculate their Share

Whoever buys a property or a plot of land through a real estate agent must of course include the commission to the agent in the overall calculation. You will usually receive the invoice from the real estate agent directly after the notarization.

How high the commission is varies and depends on various factors, such as the region. In most cases it varies between four and six percent of the purchase price of the property.

With a property purchase price of 100,000 euros, you pay between 4,000 and 6,000 euros only for the real estate agent. However, it is important to know that it is definitely worthwhile to negotiate with the real estate agent’s commission, as it is known that this is associated with a large amount of leeway.

A recommendable, total commission of 3.48 percent including VAT is a recommendable and realistic value.

~ 3.48 % of the purchase price

Supplements: Credit Interest and Installment Surcharges

The banks would like to take part in a house sale, of course, and not only through the loan interest rates. In addition to the negotiated loan interest rates, you are charged costs that are additional and usually not expected by the buyer.

These costs are not clearly visible at first glance and therefore banks are deceiving their customers. Such hidden costs can occur in the form of monthly provision interest on the unpaid portion of the total loan.

There, for example, 0.25% is charged, which the customer does not expect and which adds up to the mass. For a loan amount of 100,000 euros, this is about 250 euros per month, which you do not expect.

Additional, Hidden Costs

But there are other hidden costs that you don’t expect. These include account management, which some banks charge as a fee, but also installment surcharges if you get part of the loan paid out, depending on the progress of the construction.

With your loan, pay special attention to exactly what is written in the small print, ask about all unclear points and only sign if you are certain about all obligations.

To be on the safe side, have your bank calculate the so-called total effective interest rate or the actual effective interest rate. There, all service charges are listed in detail and clearly arranged.

Assessor & Renovation – Potential Additional Costs

Another factor that does not apply to all properties is the cost of appraisers and renovators.

Particularly with older real estate it is meaningful to hire an appraiser before the purchase, who examines the real estate down to the lattices. This includes, for example, checks on moisture and pollutants (especially for properties dating from the 1970s). Such appraisals are carried out by independent experts such as architects or civil engineers but also real estate experts.

The costs here are very different, as it depends on the type of expertise and the time required. Depending on how good the report is, possible renovation work in the future may be necessary, which should be incldued in the purchasing price as a reduction. For this reason, these assessments are critical.

Whether it is a new heating, new windows or the restoration of the roof, the costs for this case also vary greatly. Here you should note that there are usually costs for general renovation before moving in. New floors, different wall colors, a new kitchen or even tearing down a wall.

All these things again cost money, which should not be underestimated. Often there are more costs than planned, because something goes wrong, but was more expensive than calculated or small things are missing. Also note that many renovation works cannot be done by yourself. So you need craftsmen and experts to help you and they will of course calculate their working time. Before you decide on a house, think about which work would still have to be done, what you would like to renew and how much the costs for such renovation work will be.

Conclusion: Calculate additional purchase costs

In Germany, for a property with a purchase price of 100,000 euros and a loan of the same amount, expect additional costs of 9,000 to 12,000 euros.

If you do not include them in your loan amount, they must be deducted from your own capital. Such unexpected service charges should not be underestimated and can vary enormously from property to property. The higher the price of the property, the higher the service charges you expect.

• Back to our full guide on Real estate Taxes in Germany.

Der Beitrag Additional Costs – Buying House in Germany, Property Investment, Hidden Fees, More erschien zuerst auf ℄ Real Estates.

The True North Strong

Booming Economy, growing metropolises, cultural offering without end. Canada is one of the quickest growing countries worldwide in terms of economy, popularity, and much more. Its citizens are welcomed worldwide, as shown by the fact that it is one of the most liked countries in the world according to WorldAtlas. It is famous for its aboriginal history, its massive nature and the Rocky Mountains, as well as its famous metropolises like Toronto and Montreal.

• Most Loved Country in the World

Is Canada a Good Place to Live?

In its ranking of the most livable cities in the World, Canada has three cities in the top 10 (#5 Calgary, #6 Vancouver, #7 Toronto). Ahead of popular neighbour New York. More than any other country. Much more than this though, it also ranks high in other statistics. Its education system is considered among the best in the world, its cities are becoming increasingly new tech, and modern oriented. Meanwhile it is also one of the most multicultural and globalized countries worldwide, often considered a leading example for good integration. Which may be part of the reason its citizenship offers one of the most powerful passports worldwide. In regards to future-orientation, Vancouver and Montreal are regularly ranked as some of the best cities for green transportation.

• Three of the Ten Most Livable Cities
• Best Cities for Green Transportation

Canada’s Nature

Canada’s nature is unparalleled worldwide, and people from all over the world know to appreciate its vast expanses of untouched nature. The rocky mountains offer some of the best skiing in the world, Banff is a regal mountain town surrounded by the wild, and the luxury hotel fairmont Lake Louise is found on postcards on fridges all over. Below a peak at what western Canada’s riches include.

What about the Hard Facts?

Canada is home to 38 mil. inhabitants. With 9,984,670 km2 it is the second largest country in the world, yet also one of the most sparsely populated. This area is divided into provinces or territories (the equivalents to USA’s states). Due to the colonial past, the official languages are English and French, with French being commonly spoken only in the large eastern province of Quebec. It is also comfortably a part of the G7 summit every year, and counts to one of the most powerful political countries in the world. In terms of culture and traditions, Canada (at least the anglophone part) is very similar to its southern neighbours the USA. Its capital Ottawa is only the fourth largest city in the country, following (in order):

• Toronto – 2,93 mil.
• Montreal – 1,78 mil.
• Calgary – 1,02 mil.

No More Oil – The Canadian Economy

Canada has strongly de-oriented from its former oil-based economy. Despite this, its economy is still growing (see below), with 1,9% GDP growth in 2018. Its GDP of xx means it is the 10th largest economy worldwide. According to forecasts by Canada’s largest banks, Canada’s economy is set grow at an annualized rate of 36% in the third quarter of 2019. This is compared to 20% for the United States. In fact, it is easy to draw comparisons to the USA due to its market-oriented economic system. Leading sectors include the automotive and other industries, forest products, minerals and petroleum. This is also reflected in its largest trading partner is the United States, with the country receiving some 75% of Canada’s exports.

Of the state’s total income, taxes make up 32.2%. This is made up partially of income and corporate tax. Federally, these rates are 33% and 15% respectively. Yet these differ with respect to provinces, where each province has their own tax rates. Lastly, they are also staggered, with higher income corresponding to higher tax rates.

• Federal Corporation Tax: 33%
• Federal Income Tax: 15%

Taxes in Canada – Explained

Taxes in Canada are quite simple to understand, but often misunderstood. They are said to be very high, but this is not necessarily the case. The tax system in Canada is very much unlike its southern neighbours, of the U.S.A.

You want to learn more about how real estate taxes work in the U.S.A.?

• All Taxes when Buying a House

Income Tax

Income tax is levied by the state as well as by the individual provinces. The individual provinces have different tax rates. Therefore, as in the U.S., where state and county tax the same items, Canada also has e.g. federal and provincial income taxes. However, the federal share is the largest share. The structure of Canada’s income tax is in several stages. The federal tax rates are approximately 15-29%. The top tax rate of 29% starts with an income above CAD128,800. In addition, there are a few percentage points of provincial taxes. In addition to income tax, some provinces levy other taxes on wages and salaries, such as Medicare.

• Federal Income Tax: 15-29%

Goods-and-Services Tax

Regarding VAT (value-added-tax), there is again the dual system of the federal tax (GST) and a provincial tax (PST). It is due, for example, on the sale of goods and real estate as well as on services. The federal government levies 6% VAT and the individual provinces can levy up to an additional 6%. Residents of Vancouver, in British Columbia, for example, will be charged an additional 6%, while in Calgary, Alberta there is none.

• Federal VAT: 6%

Wealth Tax, Inheritance Tax, etc.

Investors will also be pleased to hear: Canada has no wealth tax, no inheritance or gift tax, and no church tax.

• No Wealth Taxes
• No Inheritance Taxes

Booming Business – Canadian Real Estate

Canada’s rapid economic growth is down to large decreases in unemployment and high spending, but largely housing and real estate sales.

Overview of Real Estate Market

Ottawa, with healthy economy, population growth, attractive labor market and strong demand for condominiums, has developed into a dynamic Canadian housing market. Toronto and Montréal remain classic sales markets. In eastern Ontario and Quebéc, property prices continue to rise and British Columbia is expected to stabilize.

Someone who moves to Canada after selling their house in countries with higher real estate prices can often purchase houses with a significantly reduced mortgage. With the exception of the metropolitan areas, rental housing in Canada is relatively inexpensive. The average price per square meter to buy an apartment in a city centre is CAD5.921, with outside the city costing CAD4.090.

House Prices – List

The median house price gives a good indication of how expensive and luxurious properties are in cities. When taking these in proportion to the median income, one arrives at a factor indicating how strong the market is, and how affordable property is for people working normal jobs in the city. The higher the factor, the more difficult it is to buy a house with a normal income. Below are selected cities, with median house price, and the factor.

• Toronto: 686.000 – Factor 8.3
• Edmonton: 353.000 – Factor 3.6
• Montreal: 306.000 – Factor 4.6
• Vancouver: 942.000 – Factor 12.6
• Winnipeg: 279.000 – Factor 3.7
• Halifax: 261.000 – Factor 3.5

What about Taxes on Real Estate?

To invest in property, you do not have to be a Canadian citizen or even live in the country, and property taxes and interest expenses are tax deductible. Property taxes are at 1% on CAD200.000, and 2% on average. Also note, different from U.S. taxes, Canadian real estate is subject to the goods and services tax. It is important to be aware of the tax implications for all phases of the investment though, from owning the property, to living in or renting it, to selling it.

The real estate transfer tax, which applies to real estate purchases, is not regulated uniformly throughout Canada, with individual provinces again deciding their own rates. It is between 0.5% and 2% and depends on the purchase price of the property. Some provinces do not levy any tax at all.

• Property Tax: 2%
• Transfer Tax: .5%-2%

The Key Details

Houses in Canada are built in a simpler way than e.g. traditional Central European houses. The power supply in the houses is generally designed for 110 volts. Internet is available practically throughout the country, including in rural areas, via telephone line, fiber optics or satellite. The average Canadian spends CAD53 on water utilities a month, using 25 cubic meters of water. This translates to CAD2.12 per cubic meter of water utility.

• CAD53 a month for water

Economy in Canada – Graph

Below a graph of the two main Canadian Stock Exchanges, S&P/TSX.

One Year

Three years

Der Beitrag Real Estate Canada – Where to Buy, Property, House, Capital Investment erschien zuerst auf ℄ Real Estates.

Real Estate – All Taxes you Pay when Buying Real Estate

Buying a house is a massive investment, and most people are surprised by the many additional costs. To begin to understand all the extra costs which the purchase of a house brings, means understanding the taxes. That means, that the three types of taxes listed below are all the necessary costs which you will pay to the government in the area of the home you are purchasing.

Upfront Taxes – What are Pro-Rata Taxes?

When buying a home in the United States, you are typically required to pay 6 months of property taxes in advance upon purchase. That means six months worth of property tax, called pro rata. Yet, on the purchase of the property, there are only three taxes. Which makes this quite easy to understand. The property tax is the tax which an individual has to pay annually for owning property, the transfer tax is the tax on the purchase of the home, and the mortgage recording tax (where it exists) is the tax on the recording of the mortgage.

• Taxes you pay in advance!

Many of these taxes can be deducted from your federal tax sheet. Learn more:

• Real Estate Tax Deductions Explained

Do you have to pay Sales Tax on Real Estate?

No. In federal law, real estate such as homes, property, or land, are not subject to sales tax. Although some states do have sales tax on items which may be interpreted as being a home (e.g. a mobile home).

Taxes You Must Know – Most Important Real Estate Taxes

These are the taxes you have to know about when paying for your home. How each of these is calculated depends on the city, county, and state the real estate is bought in. The three relevant taxes which you will incur when purchasing a home are property taxes, transfer taxes, and mortgage registration tax. Not all exist in all states, and there are many intricacies to note.

Property Taxes – Do You have to Pay Property Tax when Buying a Home?

Property Taxes are ad-valorem taxes which you pay for owning property. Most typically, this property consists of land, as well as anything which is permanently attached, such as any real estate, but also, roads, docks/wharfs, pools, etc. In some states, the property tax even includes items such as boats. When buying a house, these must be paid in advance, and then received back from the seller. Property taxes are typically a rate which is multiplied by the estimated value of the property. This value is estimated by an appraiser, and takes into account location, age, etc.

Avg. US Property Tax: 1.11%

To calculate property taxes, you receive a rate, which is influenced by local, county, and state laws. E.g., a house in Hawaii, worth USD$1 mil., will cost USD$3,000 in property taxes a year. Yet this does not take into account the rate which a specific county in Hawaii may add to this.

• U.S. States Property Taxes

Transfer Taxes – What is it? Who Pays transfer Taxes?

Transfer taxes are argued to be taxes which pay for the work and materials invested when documenting the purchase of a new home. This is why they are sometimes also called documentation taxes. They are one time fees upon the transfer in ownership of a home, i.e. when buying or selling a house. These are sometimes paid by the seller, and sometimes by the buyer, with some states stipulating who, and sometimes the real estate agent mediates between seller and buyer.

• Sometimes paid by seller, sometimes by buyer

Avg. US Transfer Tax: 0.6%

These are often felt to be one of the more complicated taxes because the rate does not only differ by state, but also between counties and between cities. E.g. in New York you have the New York State (0.4%), New York City (1,4%), Mansion (1%, only when buying a house > USD$1 mil.) transfer taxes. Meaning when you buy a house for USD$1 mil., there is a total of USD$28,250.

• U.S. Real Estate Transfer Taxes

Mortgage – What is a Mortgage Registration Tax?

This tax is based on the amount of debt being secured by the procurement of real estate. It is a state-based tax, and is paid towards the locations where the mortgage is documented and recorded. If the buyer wants a mortgage, the buyer pays the registration fees for the mortgage. In Minnesota, there may be an additional tax such as an “environmental response fund tax”. The 7 states which require a mortgage tax are Alabama, Florida, Kansas, Minnesota, New Yoek, Oklahoma, and Tennessee.

Avg. US Mortgage Registration Tax: 0.2%-.4%

The amount required is again based around the amount included in the mortgage. E.g. in Minnesota county, there is a 0.23% mortgage registration tax, when a mortgage worth USD$1 mil., you will pay USD$2300 in mortgage registration tax.

• U.S. Mortgage Taxes

Closing Costs Real Estate – Hidden Additional Costs

These taxes are just some of the many additional costs which accompany the purchase of real estate. Buying a house means paying attorneys, brokers, and many other individuals or organisations. And these additional costs can equal as much as 5-6% of the total purchase price of the property. We’ve broken down all the costs you have to know about in our article

• Buying Real Estate – All Additional Costs

Der Beitrag All Taxes you have to Pay when Buying a House – Transfer Tax, Mortgage Tax + Co erschien zuerst auf ℄ Real Estates.

Mortgage Tax – Taxing your Home Loan

In some U.S. states you are required to pay a tax on closing a mortgage. This is one of the most important closing costs for real estate purchases. For this reason it is a one-time payment when closing the mortgage. There are many names for this, from mortgage recording tax, to just simply mortgage tax. It is the buyer of a home who is required to pay a mortgage tax. Mortgage taxes can also vary within states, counties, and across cities.

Mortgages are complicated. We explain them easily

• Mortgage Explained – Meaning, How-to, Guide

What is a Mortgage Tax

This tax exists to document the transaction which takes place when closing a mortgage. It is constructed of a percentage of the amount of debt being secured as a result of the creation of debt. It is a state-based tax, and is paid towards the locations where the mortgage is documented and recorded. In Minnesota, there is an additional tax in some counties, the “environmental response fund tax”. The 7 states which require a mortgage tax are Alabama, Florida, Kansas, Minnesota, New York, Oklahoma, and Tennessee.

Mortgage tax is not the same as property taxes, or as mortgage interest.

How is Mortgage Tax Calculated?

Each state has a mortgage tax rate. The mortgage rate is easily calculated by multiplying the rate in the location of the property (make sure to take into account state and county regulations!) by the amount which is in the mortgage. Also, make sure to take into account that mortgage taxes are rounded up.

E.g. in New York State, there is a mortgage tax rate of 1.05%. That means closing a mortgage in New York costs USD$7.500, given the rate of 1.05% and a mortgage worth USD$500.000.

Mortgage Tax Payment = Mortgage Tax Rate x Total Mortgage Amount

It is possible to reduce the mortgage tax by “assignment transferring”. In a nutshell, the loanee takes the assignment of loaning the mortgage to a new company, here the original tax is transferred, and therefore does not have to be paid.

Want to find out more about saving on your real estate tax bill?

• Real Estate Tax Deductions USA – How to Save

List – Mortgage Taxes by State

There are seven states which require a mortgage tax. These may be called different names, but are all the same construct.

New York

• Name: Mortgage Tax
• Rate: 1.05%
• Exemption: Possibility of $30 if the relevant “property is, or will be, improved by a one or two family dwelling.”

Alabama

• Name: Mortgage Tax
• Rate: 0.15% (.15 per $100, total mortgage amount rounded up to the next highest $100.00)

Oklahoma

• Name: Mortgage Tax
• Rate: 0.10% (+ $5 certification fee)

Minnesota

• Name: Mortgage Registry Tax
• Rate: 0.24% (+ 0.01% Environmental Response Fund Tax in Hennepin and Ramsey Counties)
• Exemptions include contracts for deed, certain agricultural mortgages, marriage dissolution decrees, and certain low- and moderate-income housing mortgages.

An oceanside house surrounded by palms and beach in Florida.

Florida

• Name: Documentary Stamp Tax
• Rate: 0.35%
• Late penalty: 10% + increasing monthly interest rate

Tennessee

• Name: Mortgage Tax (part of “recordation tax” which includes realty transfer tax)
• Rate: 0.115% (does not apply to the first $2.000 of the debt)

Kansas (Until 2019)

• Name: Mortgage Registration Tax
• Rate: 0.26%
• Since 2019, you no longer pay mortgage registration tax in Kansas

Der Beitrag Mortgage Tax – Everything to know Explained, Tips, How-to, More erschien zuerst auf ℄ Real Estates.