PROS AND CONS OF SELLING AT OR AFTER REGISTRATION – REGULAR SALE:
- The ‘first buyer’ will pay the Land Transfer Tax and closing costs to the developer
- The Offer to Purchase is easier to understand.
- There will be carrying costs during the occupancy period and/or after. These costs can be minimized if one allows the ‘second buyer’ to occupy and pay a rent to the ‘first buyer’ during part of the occupancy period. Or the ‘first buyer’ can rent the unit in the occupancy period and after registration to a tenant, and then sell later.
- If you never allow a tenant or the ‘second buyer’ to occupy the unit, you may be able to declare the property as a ‘principle use’ property and hence avoid Capital Gains tax.
- HST may or may not be applicable, depending on point (4) above and point (3) under ‘BEFORE REGISTRATION’.
- The ‘second buyer’ can arrange mortgage financing for the purchase and the property can then appeal to high ratio buyers i.e. a larger pool.
- Property will sell at market value.