Recording a land purchase

The following is a detailed example of a land purchase agreement with lawyer and mortgage fees.

Details of the purchase:

Land purchase price             110,000.00

Cash down payment              40,441.10

Lawyer fees                                537.50

Mortgage fees                            475.00

GST on fees (claim all)                  70.88

PST on fees (50% expense)         70.88

Mortgage land loan               71,500.00

Interest to vendor                     162.74

Other disbursements:

File opening fee (pro-rate 50% land, 50% mortgage)           40.00

Tax certificate (add to land value)                                          10.00

Land titles (add to land value)                                               80.00

Corporate fee (add to land value)                                           5.00

Transfer registration (add to land value)                             330.00

Mortgage registration (add to cost of borrowing)                150.00

GST on disbursements (claim all)                                             9.10

Calculating expenses and fees associated with the purchase of land:

• All expenses related to the sale must be added to the value of the land (lawyer fees, 50% of PST, land title fees, tax certificate and registration).
• All expenses related to the mortgage may be claimed (all mortgage fees and land title registration).
• Fees applying to the land and mortgage may be pro-rated (50-50%). (File opening fee and PST on fees.)
• All GST may be claimed as a business Investment Tax Credit.

Last updated on June 3, 2014 by FCC Management Software