Buying a Residential Lot in Ontario

Buying a residential lot to build your own home has its pros and cons. 

Acreages, bare land at a lake, or buying a residential lot are good choices for experienced home buyers who know how to navigate hiring and managing home design and building contractors.

Quick Reads

Are residential lots good investments?

Is building or buying a home cheaper?

How much does an acre of land cost in Ontario?

What do you need to know when buying land in Ontario?

What should I secure when buying a lot? 

4 Ways to Build Your Dream Home 

Residential lots are good investments for real estate buyers. Raw land appreciates over time, earning you passive income. You can always rent or lease bare land for active income, or hold it until you retire, then build.  

If you’re new to buying a residential lot and building a new home, you can:

  1. Buy floor plans online and hire an experienced general contractor to build your new home on a lot of your choice.
  2. Do some work yourself and hire subcontractors (subs) to assist you.
  3. Buy a residential lot from a new home subdivision developer and have them construct your home.
  4. Buy a new home from a builder in Ontario and design your own dream home.

Axess Law reviews new build agreements of purchase and sale and offers to purchase for residential lot buyers. Our Toronto area and Ottawa mortgage lawyers advise you if your contract is legally sound, because you wouldn’t want to lose your deposit if finance falls through.

Cost of Building vs Buying

Home contractors agree building a house can be cheaper than buying. You save on real estate commissions and the markup sellers put on homes to make a profit. Axess Law’s mortgage lawyers can seal the deal when you refinance your current home to make a downpayment on buying a residential lot. When refinancing can work to your advantage. 

If paying contractors is an issue, your lender can give you construction advances — a form of mortgage advanced in stages to pay contractors and subs. Once the home is complete, your advances are converted into a traditional mortgage, with terms you select.

Writing your financing arrangements into the agreement of purchase and sale can prevent downstream headaches. 

Costing an Acre of Land

What an acre of land costs in Ontario depends on its location, and suitability for building a home, such as the soil type and how close underground water is to the surface. Local property taxes and how close utilities are for servicing your lot affect prices. estimated the price per acre at $11,000 in 2021. 

Must-Knows About Buying a Residential Lot

Location, location, location. The right residential lot can make your new home far more profitable and enjoyable. Axess Law advises to look for these features to get a prime property location.

  • Residential Zoning — Avoid mixed commercial or industrial zoning if what you want is peace of mind from on-street customer parking, commercial traffic, and shoppers or tourists. Zoning applications and permission for construction variances are time consuming and may require you to hire professionals to prepare property surveys or engineering documents. Unless you’re buying a commercial building, steer clear.  
  • Multi-family Properties — Apartment complexes that materialize after you buy can rob you of desirable sight lines and increase vehicle traffic. You could wind up living on a busy transit route or contending with high renter turnover.
  • Heritage or Historic Districts — Arts and crafts bungalows, farmhouses, or multi-storey brownstones could be a sign your neighbourhood has historic or heritage designation. You may not be able to knock down a fixer upper to build a new home on the lot you choose or be limited to period design styles.
  • Restrictive Convenants — New subdivisions can have restrictive covenants that dictate what kind of home you can construct or what colour you can paint it. Ask your developer or general contractor if a residential lot they show you is in a restrictive covenant community.
  • Safe Spaces — Work nights or have children? Underlit streets, bushes that obscure your view, or desolate spaces with abandoned buildings and empty alleyways may not be the best choice for you. Before you buy, check with realtors or police for local crime stats.
  • Challenging Geography — Watch for steep or rocky embankments, leaning trees, or streams that could compromise lot stability and suitability. Underlying issues like a high water table, unstable trees, or a floodwater zone designation may affect mortgages, home insurance, or building permits. Ravine or tree clearance approvals can be required in Toronto.   
  • Property Rights — Neighbourly fences and garages could be on or over your property line. A property survey from a local land registry office can show who owns what in a property line dispute. Axess Law refers you to trusted legal partners if legal action is needed.  

Applying for Building Permits in Ontario

You’ve bought the lot, picked a design you like, and planned with the general contractor how to excavate and grade your site. Before you start, make your project legal by securing a municipal building permit. Your contractor can apply or assist you to file the paperwork.

Your permit will state how long you have to begin construction (12 months in Toronto). The permit is usually valid as long as you are actively working on your home. 

Permits can be revoked and fines levied if you start a building or renovation project without a permit or take too long to build. Axess Law can refer you to qualified new home construction lawyers if your project hits a building snag.

Why You Need a Real Estate Lawyer

Ask Axess Law if you’re buying a residential lot or have questions about Ontario real estate law. We help you realize your dream of building a home of your own.

Real estate purchases can be subject to conditions like mortgage financing, environmental assessments, or variance applications to change the zoning or lot use. Municipal easements or a lien on a home or property could block or delay your purchase. How covenants and easement affect your building plans. 

Axess Law lawyers search the title for a construction lien and easements. Making a property title transfer in Ontario costs less when you use our affordable real estate lawyer service. Your lawyer arranges for land transfer taxes and HST to be paid if they are owed. If the lot is an estate sale, your lawyer communicates with the estate trustee. Who owes land transfer taxes in Ontario. 

We prepare land registry discharge of mortgage documents. Our mortgage lawyers answer questions like can you get a mortgage for land, or do you lose your deposit if financing falls through? 

Affordable Real Estate Lawyers, Anywhere You Are 

Access lawyers for less in Greater Toronto Area, Ottawa, or anywhere in Ontario  when you buy, sell, or transfer property. Axess Law’s flat fee real estate lawyers are affordable, and our rates are all inclusive (excluding taxes, disbursements, and third-party charges). Axess Law offers you only the legal services you absolutely need. Your final invoice includes no surprises or hidden charges. Your itemized statement of adjustments is explained when we deliver it, and we answer any questions you have about it. 

Hiring a real estate lawyer. 

Make Appointments Online or Call Us Today

Use our online booking form or call our 647-479-0118 lawyer line, toll free to 1-877-522-9377. to make day or evening appointments to buy a residential lot. Our land transfer lawyers can go online with you anywhere in Ontario, or meet you in person at any of our conveniently located Greater Toronto Area and Ottawa law offices. Remote video call appointments are available 7 days a week, at your convenience. 

Axess Law has onsite parking and easy transit access.