How much does it cost to be a homeowner?

Aug 16

Something first time home buyers may not be aware of are the monthly costs of owning a home. Beyond just paying your monthly mortgage payments, you will also have to be ready to pay a whole host of monthly and yearly fees that come with owning a home and the land it is on (or the building it is in, if it is a condo!).

Let’s break down all the fees a homeowner can expect to see on a yearly basis.

1. Home Insurance

One of the most important fees that you will be paying as a homeowner is home insurance. Home insurance is insuring all aspects of your property. Not just the house itself, but also the contents, the land, and the people who visit it! Some of the major sections of insurance include vandalism, theft, flood, fire, and liability insurance (which protects you from being liable for someone who may injure themselves on your property).

We work with an amazing company called Apollo Insurance. Apollo is the only insurance company in Canada that offers a completely online experience. In just 5 minutes, you can get a quote on insurance for your home.

You can take a look here, and feel free to let us know if you have any questions!

https://info.apollocover.com/newpurveyors

2. Property Taxes

Property taxes are the tax you pay yearly for owning property. Your tax is calculated based on the approximate value of your home. There are two percentages used to calculate this, the ‘municipal’ and ‘education’ tax rates for your class of property. These taxes will help pay for services you benefit from in your neighbourhood like police, garbage and recycling disposal, park upkeep, and road upkeep.

In 2021 in Ottawa, the residential property tax rate was around 1.116%. This is lower than surrounding cities like Cornwall, Brockville, and Pembroke where homeowners paid taxes between 1.4-1.6%. The lowest property taxes in Ontario are seen in Toronto and other major GTA cities, and the highest property taxes in 2021 were seen in Windsor!

3. Condo Fees

If you purchase a condo, you will also have to be prepared to pay condo fees each month. These will be dependant on your building, as well as the size of your unit and value compared to the rest of the building. You should be aware of your condo fees before you purchase, and condo fees will typically change from year to year. These fees pay for maintenance of your building, including cleaning, regular tune ups for things like elevators and shared spaces, and major renovations or fixes like roofs, balconies, and gardens.

4. Utilities

Homeowners pay for every service that their home receives, including electricity, air conditioning, heat, gas, water, cable, phone, internet, and renting a water heater (although some homes do come with one already purchased, many have a rented unit). The previous owner of your home may be able to share how much they were paying when they lived there, but these bills also change based on how much your home uses these facilities, and the cost of living at the time.

5. Maintenance

Homeowners who do not live in a condo will pay considerably more for maintenance of their property, but condo owners, as previously mentioned, pay their condo fees monthly to cover these costs. If you own a freehold property, you will be responsible for snow removal, mowing the lawn, cleaning gutters, HVAC maintenance, cleaning, and more. If the roof falls apart, a wall falls in, water damages the basement, and etc, you must be ready to finance those repairs. Insurance can cover a good portion of these, depending on your coverage, but you will still be responsible for paying the deductible.

Before purchasing a home, it is crucial to consider all of these additional fees when budgeting accordingly! Depending on your monthly budget for your home, you’ll have to account for these fees when deciding what a home in your budget will be.

RE/MAX Canada has provided this great breakdown:

“This is what you could expect to pay for $720,000 home each month: