Condos are an exceptional type of property. Whether you’re a young professional eager to ascend the property ladder, a downsizer seeking the ideal home for your golden years, or a real estate investor searching for a unit with high return potential, owning a Toronto condo offers unique advantages.

However, many of the advantages of condo living are not without cost. Unlike a freehold home, owning a condo entails paying additional fees on top of your mortgage. These contributions are known as condo fees.

In this blog post, we will offer essential information on condo fees in Toronto, what they cover, and what buyers should expect to budget as they prepare for their condo purchases.

What Are Condo Fees?

The short answer is that condo fees, which are paid monthly to the condo corporation by owners, go towards a range of operating expenses. That being said, condo fees are more complicated than they may initially appear. Every property (along with its corporation) is unique. As a result, there is no standardization for how much condos fees cost or what expenses they are intended to cover.

In Toronto, condo fees can vary drastically. Two units may be priced similarly on the market yet have a large difference in fee rates – making them further apart with regard to overall affordability. As a condo buyer, you should be diligent in understanding what your recurring costs will be beyond just the down payment and mortgage.

Approaching a real estate purchase in Toronto? Consider these related resources for more guidance.

What’s Included in Condo Fees?

Condo fees are an inherent element of condominium living. Paid to the condo board or corporation, these contributions serve to cover the collective costs of maintaining and operating the building and its amenities. Once again, the minutiae of what is exactly covered by or built into condo fees is dependent on the property itself. However, speaking generally, there are four standard factors of condo ownership that condo fees account for.

1. Utilities

This may include utilities like electricity, hydro, heating, and cooling. Along with (usually) covering these utilities in-unit, condo fees also account for these services in common areas. Some condo buildings may also include basic cable, internet, or other utility services as part of the condo fees, particularly if these services are provided on a building-wide basis.

2. Maintenance & Repairs

One of the primary purposes of condo fees is to cover the maintenance and repair of the building’s common areas, shared facilities, and amenities. This includes routine tasks such as interior cleaning, landscaping, pool maintenance, and snow removal. More significant repairs like roof replacement, exterior painting, and plumbing or electrical system maintenance are also typically covered.

3. Building Insurance

Condo fees typically cover the building’s master insurance policy, which provides coverage for the common areas and the building structure itself. This insurance is distinct from individual unit owners’ insurance policies, which cover the interior of their units and personal belongings.

4. Emergency (Reserve) Fund

Finally, a portion of your monthly condo fees may also contribute to an emergency fund for the building. This reserve is designed to alleviate the financial burden of any unexpected expenses that may not be covered by insurance.

Downsizing from a larger home to a condo? Explore these related blog posts.

Effective Budgeting For a Condo Purchase

Like any type of real estate purchase, buying a condo requires careful financial planning. However, with the addition of fees and other property-specific nuances, adequately budgeting for a condo will also entail unique considerations not involved when buying a freehold home.

When approaching the purchase of a Toronto condo, the most effective method of understanding your financial resources in relation to homeownership is seeking pre-approval for a mortgage. During this process, your lender will closely analyze your finances and offer conditional approval for a determined loan amount. With this number, you have a concrete reference for what you can afford to spend on a condo. Beyond the cost of the mortgage, your lender will also account for condo fees as they assess your creditworthiness.

As you scour the market for condos suited to your tastes and parameters, always identify or inquire about the fee rate of a particular condo before you schedule a showing. If not, you may find yourself facing disappointment should you discover the ideal unit, only to realize that you are unable to afford it after accounting for condo fees.

Considering the purchase of a Toronto condo? Ramsay Real Estate Group can help. To get in touch, click here to contact us by email or call 416.906.8366.

Stay up-to-date with Toronto real estate.

Get insider information delivered directly to your inbox.

Sign-Up