Your Home Refund

Purchasers of new condominiums are being overcharged for property taxes.

When a new condominium is ready for occupancy, a buyer receives keys and can move in — but title will not be formally transferred for some months.

The period between occupancy and the final closing, when title is transferred, is called the “interim occupancy period.” During this time, buyers pay the builder a monthly interim occupancy fee.

The components of this fee are set out in the Condominium Act, and include an amount “reasonably estimated” by the builder for the unit’s municipal taxes.

Generally, builders calculate the tax component of the interim occupancy fee by taking the purchase price of the unit as shown on the front page of the offer and multiplying it by 1 per cent. The result is then divided by 12 to get the monthly charge.

The way some builders calculate estimated taxes, however, is not the way the city does it. And the result is a significant overcharge to buyers.

Additionally, builders often charge purchasers an overestimate of final taxes to the end of the year of closing, and undertake to readjust with purchasers afterward — but typically only on request.

As such, each purchaser of a new condominium, may be entitled to a readjustment from the builder.

This is where we can help.