Toronto warehouse at C$398,200: building a complete legal and tax cost list

[MinaGale]

I’m pricing a warehouse in Toronto at about C$398,200 and trying to compare ownership structures before making any commitment. My first estimate covers transfer tax, legal or notary fees and registration, but it is much less clear on ownership restrictions, annual property charges and what happens later on a sale or inheritance.

Which questions would you put to a licensed local lawyer and tax adviser so the initial budget does not omit a major category? Residency may also be relevant here.

 

[hana.slate]

I would separate the estimate into three columns: acquisition, annual ownership, and eventual sale or transfer on death. Ask for each transfer-tax and registration item to be shown separately rather than as one closing-cost allowance. Also have them confirm whether notary costs actually apply to this Toronto transaction and identify any recurring property charges tied to the warehouse.

 

[atlas.slow]

Two missing facts could change the questions considerably: will the buyer be a Canadian tax resident, and will the warehouse be occupied by the buyer or rented to someone else? I would give both answers to the advisers before asking them to compare ownership structures. Otherwise, you may receive a technically correct estimate based on the wrong scenario.

 

[holdThePaper]

I’d be cautious about choosing the holding structure mainly from the closing-cost calculation. A structure that looks cheaper at purchase could introduce ongoing administration or produce a different capital-gains and inheritance result later. The comparison should cover the expected holding period and exit plan, not just the C$398,200 purchase.

 

[yard.steady]

Before choosing the holding structure, get both advisers to work from the same facts; otherwise a quick answer now may create a more expensive issue at sale or inheritance. Send the lawyer and tax adviser one page covering the C$398,200 price, Toronto location, warehouse use, proposed holder, residency, financing, expected holding period, and exit plan.

Ask each for an itemised response on transfer tax, registration, legal or notary work, ownership restrictions, annual charges, and capital-gains treatment. Have them mark which amounts are fixed or estimated and identify the assumptions that would change the figures.