Sharing in an Equity Co-op — Homeownership for Less

Housing in the GTA sure is expensive. Zoocasa estimates it would take up to 12 months to save a downpayment to live at the most affordable addresses in West Hill, Centennial Scarborough, Malvern, Black Creek or Rexdale. Years of being rent free could get you a posh palace in North York, Rosedale-Moore Park or Yorkville. Good luck saving up for it.

Living Cheap to Save a Downpayment

Now that you bring it up, where exactly do people live rent free in the GTA? The most obvious choice is at home with your parents. That’s where Stats Can found 42.1 % of young Ontarians (47.4% in Toronto) in the 2016 census. You could couch surf, if your friends don’t get sick of you. Maybe you could go up north and live in a work camp. Food, housing AND a paycheque. Being an onsite resident property manager works, if you enjoy collecting rent and fixing broken sinks.

What a Modest Downpayment Looks Like

So it is possible to live rent free. How much you need to save depends on what you’re looking for. Zoocasa based that Centennial Scarborough condo on saving $16,621 in 7.2 months to lay down 5% on a $325,223 unit. That requires you to save just over $2,100 monthly.

Location, Location and More Location

On the other hand, says a car is the best way to get around Centennial Scarborough. “Notably, this area is good for those looking for four or more bedroom homes.” Banks, liquor stores and schools “can be an occasionally long walk away.” Hmmm. Doesn’t sound much like a dream neighbourhood for first-time homebuyers. had one condo for sale in Centennial Scarborough ($539,900 for two beds and a bath).

Finding a Property You Can Afford 

That didn’t work out too well, now did it. Maybe you should plan way ahead and save your nest egg for a Rosedale postal code. Zoocasa reports just 66.9 months of rent-free living and stashing away a mere $3,309 a month will get you in the door. Wow, that’s a whopping $221,423 downpayment for 20% down on two beds and two baths for $1.1 million. Mortgage payments are $6,620.98.

The Other Housing Option

Or maybe not. Let’s face it. That’s a lot of hard-earned cash every month. Why not buy into a co-op apartment unit instead? You get a lot more for your money, for a lot less upfront. It’s the affordable option for first-time homebuyers and modest-income families. 

Little Known Co-ops Are Big Value

National Post calls co-op living “flying under the radar” (Feb. 9, 2015). Equity co-op owners are found in every corner of the GTA, from small walkups to new apartment buildings. has units from under $200,000 in dodgier neighbourhoods to a high of $824,900 in (yup) Rosedale.  

Living the Co-op Dream 

Where else would you get 999 square feet for $399,900 in Centennial Park? A leafy, tree-lined street outside your expansive balcony. Room enough for a traditional dining suite and buffet. Close to transit — no uncommonly long walks here. The big advantage of equity co-op living is the low maintenance costs. Just $357 a month pays property taxes, water, heat, building insurance and common elements for this one. 

Caring For Your New Home

Unlike strata buildings  that usually hire a management company, equity co-op owners may bear the burden of keeping the building ship shape. The differences don’t stop there. You could do everything from taking out the recycling and tending the compost to juggling the books. When you buy into a co-op, you’re an equal share owners and that means actively contributing, not living it up like a carefree condo owner.

Mortgages for Equity Co-op Owners 

Did we say shares? We did. Co-op owners buy shares to own and manage the land and buildings in common. Because equity co-operatives are incorporated, tenant-shareholders get occupancy rights to a unit, instead of owning it outright. The co-op has bylaws, rules and regulations like any Ontario business corporation. While that keeps prices lower, it means buildings with more than 35 shares are governed by the Financial Services Commission of Ontario, like any business corporation. That doesn’t mean you escape taxes — land transfer tax is due on your share’s value when you sell.

Fair Value for the Tradeoff

Shareholders make a few tradeoffs to buy into a co-op instead of a condo. All shareholders are financially liable for the blanket mortgage on the building and land until it’s paid in full. They also pick up the slack if a tenant-shareholder  fails to contribute to upkeep and maintenance costs or property taxes. That explains why co-op boards vette share sales and rentals. 

Financing Co-op Shares in the GTA

Provided your co-op’s board allows it, a 30% downpayment or more could get you 80% mortgage-type financing for up to 30 years. Lenders like DUCA or Northern Birch (formerly Estonian and Latvian) Credit Union that specialize in co-op mortgage. They’ve been helping GTA residents get into affordable housing since before you got that homeownership gleam in your eye.    

Sign Legal Papers to Close a Co-op Deal

Axess Law Ontario can finalize your purchase of a co-op unit. Our licensed real estate lawyers make video calls anywhere in Ontario, 7 days a week, at your convenience. Book an appointment by calling toll-free to 1-877-552-9377 or 647-479-0118 in Toronto or use our online booking form. Lawyers are available to meet in person at our Toronto, Scarborough, Vaughan, Etobicoke, Ottawa, Mississauga Winston Churchill or Mississauga Heartland law offices. 

Click here to learn more about Axess Law’s real estate law services.

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