Every Toronto real estate term you will encounter as a buyer, seller, investor, or observer. Written in plain English by someone who uses these terms daily in actual transactions.
The date used to calculate financial adjustments between buyer and seller at closing. Items like prepaid property taxes, utilities, and maintenance fees are divided based on who owned the home on which days. The adjustment date is almost always the closing date.
The legally binding contract between buyer and seller in an Ontario real estate transaction. Once signed and accepted, it cannot be backed out of without consequences (deposit forfeiture, lawsuits for damages). In Ontario, the standard OREA form is used for most transactions.
The total length of time it would take to fully pay off a mortgage at the current payment level. Canadian mortgages typically have 25 or 30 year amortizations even though the mortgage term itself is usually 1 to 5 years. Longer amortization means lower payments but more interest paid over time.
A professional opinion of a home's current market value, typically ordered by a lender to confirm the purchase price is justified before issuing a mortgage. In Toronto's heated markets of 2020 to 2022, homes often sold above appraised value, creating financing gaps buyers had to cover with cash.
When a buyer of a pre construction home sells their contract to a new buyer before the home is completed and registered. The new buyer takes over the original deposit structure and closing obligations. Assignments are common in Toronto's condo market and have specific tax implications including possible HST.
A short term loan that bridges the gap when you buy a new home before selling your existing one. Typical bridge loans run 60 to 120 days and charge prime plus 2 to 4 percent. Useful for buyers who want to avoid selling first and renting while they find the next home.
An offer presented to a seller before the scheduled offer review date, typically priced significantly above asking to discourage other buyers from competing. Bully offers were common in Toronto from 2016 to 2022 and still appear in tight segments. Sellers are not obligated to accept them but often do.
If you are a buyer making a bully offer, price it to actually win. A marginal bully offer gets rejected and alerts the market that serious interest exists, which can drive up the final price on offer night.
In Ontario, new homes and condos come with mandatory warranty coverage through Tarion Warranty Corporation. Covers defects in work and materials for one year, major structural defects for seven years, and specific systems for two years. Not optional. Fees are baked into the purchase price of new construction.
Tax on the profit from selling a property. Principal residences in Canada are exempt. Investment properties, second homes, and assignments are taxable. Fifty percent of the gain is added to your income in the year of sale. For a 500,000 dollar gain, 250,000 becomes taxable income at your marginal rate.
Capitalization rate. Annual net operating income divided by purchase price, expressed as a percentage. A simple measure of investment property return. Toronto residential cap rates in 2026 typically run 3 to 5 percent. Commercial properties run higher. Lower cap rates indicate higher prices relative to income.
A document confirming that a party to a transaction received independent legal counsel before signing. Often required for spouses signing off on property owned by the other, for guarantors, and for joint purchasers with different contribution levels.
All the additional costs beyond the purchase price that a buyer pays on closing day. In Toronto, closing costs typically run 3 to 5 percent of the purchase price. Components include land transfer tax (provincial and municipal), legal fees, title insurance, HST on services, and adjustments.
A rough rule for Toronto: budget 4 percent of purchase price for closing costs on resale homes, higher on new construction due to HST.
The date the property legally changes ownership. Keys transfer, funds move, and the buyer takes possession. In Ontario, the standard window is 30 to 90 days from offer acceptance, though anything from 14 days to 18 months is negotiable.
An offer that includes conditions the buyer must waive before the deal becomes firm. Common conditions: financing, home inspection, lawyer review, sale of existing home. Conditional offers are weaker in competitive markets and often avoided in Toronto luxury transactions.
A document from a condo corporation disclosing financial health, reserve fund status, lawsuits, special assessments, and governance details. Costs approximately 100 dollars. Must be reviewed by a real estate lawyer before closing a condo purchase. The 72 hour review period gives buyers a window to walk away if serious issues surface.
The number of days a listing has been active on MLS before selling. In Toronto in early 2026, average DOM is 45 days, extended from 20 days at the 2021 peak. Higher DOM usually signals a softer market or overpricing.
The buyer's good faith money submitted with an offer. In Ontario, deposits are held in trust by the listing brokerage until closing. Typical deposits in Toronto luxury run 5 percent of purchase price. Deposits are applied to the purchase price at closing. Forfeited if the buyer defaults.
A free standing single family home with no shared walls. The most desirable residential category in Toronto and typically the most expensive per square foot in central neighborhoods. Lot size, not square footage, tends to drive value in detached Toronto real estate.
The portion of the purchase price paid upfront in cash. In Canada, minimum 5 percent for homes under 500,000, 10 percent on the portion above 500,000 up to 1 million, and 20 percent minimum for homes over 1 million. Most Toronto luxury homes require 20 percent or more.
A legal right for someone else to use part of your property, typically for a specific purpose like utility access or a shared driveway. Easements run with the land and cannot be removed by the owner. Always reviewed by a lawyer during closing.
A neutral third party holding funds or documents during a transaction. In Ontario residential real estate, escrow is less formal than in US transactions. Deposits are typically held in brokerage trust accounts. Lawyer trust accounts handle closing funds.
A property being marketed by one brokerage without going on MLS. Less common than MLS listings but used strategically for luxury properties where privacy is valued, or to test market interest before a full public launch. Limits exposure in exchange for control.
An offer with no conditions. Once accepted, the deal is binding on both parties. Firm offers are the standard in competitive Toronto markets and in most luxury transactions, where sellers will not entertain conditional offers.
A mortgage where the interest rate is locked in for the term (typically 1, 3, 5, 7, or 10 years). Payments stay constant. Provides predictability but usually carries a higher initial rate than variable. In 2026, Toronto 5 year fixed rates run around 5.9 to 6.1 percent.
A property where the owner owns the land and the structure outright, without a condo corporation above them. Most detached and semi detached Toronto homes are freehold. Opposed to condominium, where ownership is limited to the unit itself plus a share of common elements.
Annual rental income divided by purchase price, expressed as a percentage. A simple but incomplete measure of rental property return (does not subtract costs). Toronto gross rental yields typically run 3 to 5 percent in 2026.
A revolving credit line secured against the equity in your home. Typical Canadian HELOCs allow borrowing up to 65 percent of home value at prime plus a margin. Interest only payments. Commonly used by Toronto homeowners to fund renovations, investments, or bridge purchases.
A non invasive visual examination of a home's structural, mechanical, electrical, and plumbing systems, typically conducted after an accepted offer. Costs 500 to 1,000 dollars in Toronto. Results inform whether to waive conditions or renegotiate. In Toronto luxury markets, pre listing inspections are increasingly common.
Ontario harmonized sales tax applied to new construction homes and condos but not to resale homes. On new homes, buyers may qualify for the HST rebate, which can significantly reduce the effective tax burden. Resale homes are HST exempt, though services (legal, inspection, etc.) still attract HST.
The list of items staying with the home (inclusions: appliances, light fixtures, window coverings) and items the seller is taking (exclusions: specific artwork, custom pieces). Clearly specified in the agreement of purchase and sale. Disputes over inclusions and exclusions are a common source of closing friction.
In Canadian mortgages, the date from which interest begins accruing, which may differ from the closing date. Often set as the first day of the month following closing. Affects how your first payment is calculated.
A tax paid by the buyer on closing when title transfers. Toronto has two LTTs: the Ontario provincial LTT and the Toronto municipal LTT, applied to properties within the city boundaries. Together they range from 2 to 5 percent of purchase price depending on price tier. First time buyers receive a rebate on a portion.
On a 3 million dollar Toronto home, combined LTT is approximately 135,000 dollars. Budget carefully.
A property where you own the building but lease the land it sits on. Rare in Toronto residential but occasionally seen in specific developments. Lease terms matter enormously for value. Short remaining lease terms mean the property is essentially valueless at the end.
A legal claim against a property by a creditor. Must be cleared before closing or the buyer assumes the obligation. Common liens include unpaid property taxes, contractor work orders, and court judgments. Title insurance protects buyers against undiscovered liens.
The width of a property at the street. Toronto lot frontages vary dramatically by neighborhood: 25 to 30 feet is typical in older downtown areas, 50 to 75 feet in Forest Hill and Lawrence Park, 100 plus feet in The Bridle Path. Wider frontages command significant premiums.
A federal rule requiring Canadian mortgage applicants to qualify at the higher of their contract rate plus 2 percent or the qualifying rate (currently 5.25 percent as a floor, with actual mortgage rates typically higher). Designed to ensure borrowers can handle rate increases. Significantly reduces buying power.
The cooperative database where Toronto real estate professionals list properties for sale. Feeds public sites like realtor.ca. Not all listings go on MLS; exclusive and off market transactions remain outside it. Approximately 95 percent of Toronto residential transactions still go through MLS.
A situation where two or more buyers bid on the same property. Sellers typically schedule an offer date to encourage multiple offers and competitive pricing. In hot Toronto markets, homes regularly receive 10 to 30 offers. In soft markets like 2026, multiple offer situations are rarer and usually tied to specific well priced homes.
An Ontario tax on purchases of residential property by foreign buyers, currently 25 percent of purchase price. Combined with the federal Prohibition on the Purchase of Residential Property by Non Canadians Act, this has significantly reduced foreign buyer activity in Toronto since 2023.
A property not publicly listed on MLS. Off market transactions are common in Toronto luxury, particularly above 5 million, where privacy is valued. Often transacted through broker networks rather than public marketing. Buyers need strong agent relationships to see off market inventory.
A scheduled window when a listing is open for the public to walk through without appointment. Typical in Toronto weekends 2 to 4 pm. Less common in luxury transactions, where private showings with qualified buyers are preferred.
In new construction condos, the date a buyer can move into a unit before it is legally registered. The buyer pays interim occupancy fees (similar to rent) during this period, which can last months. Final closing happens once the building is registered with the land titles office.
A freehold home that is tied to a common elements condominium for shared areas like private roads, parks, or amenities. You own your home outright but pay a monthly fee for the common elements. Common in new construction townhome developments in the GTA.
A lender's conditional commitment to lend up to a specific amount at a specific rate, usually valid for 60 to 120 days. Pre approval strengthens offers and locks in rate protection. Not a guarantee of funding; final approval depends on the specific property and updated financials.
The ability to pay extra against your mortgage principal without penalty, within defined limits. Typical Canadian mortgages allow 10 to 20 percent prepayment annually. Useful for paying down mortgages faster when bonuses or other lump sums arrive.
Annual tax paid to the city based on the assessed value of the property. Toronto's residential property tax rate is approximately 0.7 percent of assessed value. On a 3 million dollar home, annual property tax is roughly 21,000 dollars. Paid monthly or quarterly depending on your setup.
A condominium corporation's savings for major future repairs and replacements. Reviewed every three years through a reserve fund study. Weak reserve funds signal impending special assessments or fee increases. Always reviewed during the status certificate process.
Federal program allowing first time home buyers to withdraw up to 60,000 dollars from RRSPs without immediate tax, to use toward a down payment. Amount must be repaid to the RRSP over 15 years or is added to taxable income. Useful but often insufficient for Toronto purchase prices.
The ratio of homes sold to homes newly listed in a given period. Above 60 percent indicates a sellers market. Below 40 percent indicates a buyers market. In January 2026, Toronto's SNLR is approximately 33 percent, firmly in buyers market territory.
A home sharing one wall with an adjoining home. Common in older Toronto neighborhoods. Typically less expensive than fully detached but more desirable than townhouses. Pricing depends heavily on which wall is shared and the quality of sound insulation.
A one time charge levied by a condo corporation on all unit owners to fund unbudgeted expenses, typically major repairs or legal settlements. Special assessments can run 5,000 to 100,000 per unit depending on the situation. Buyers should always check for pending special assessments before purchase.
See Condominium status certificate above. Essential document for condo purchases.
The industry body representing approximately 70,000 real estate professionals across the Greater Toronto Area. Publishes monthly market statistics including sales volumes, average prices, and inventory levels. TRREB data is the standard reference for Toronto market conditions.
Insurance protecting the buyer against losses from title defects, liens, fraud, and survey issues. Costs roughly 300 to 600 dollars as a one time premium. Highly recommended and often required by lenders. Not to be confused with title search, which is a separate legal due diligence step.
The mortgage term is the length of the current contract with the lender (typically 1 to 5 years). The amortization is the total length to pay off the mortgage (typically 25 to 30 years). At the end of each term, the mortgage is renewed or renegotiated at prevailing rates.
A home sharing walls with adjoining units on both sides. More affordable than semi detached or detached. Can be freehold (rare in downtown Toronto) or condominium (most common). Always clarify which structure applies before buying.
A mortgage where the interest rate fluctuates with the prime rate. Typically priced at prime minus a discount. Payments may stay constant with the balance of principal and interest adjusting, or may adjust with each rate change. Historically lower cost than fixed but more volatile.
A seller financing arrangement where the seller lends the buyer part of the purchase price, taking back a mortgage secured against the property. Rare in Toronto residential but occasionally used in estate situations, slow markets, or specific commercial transactions. Creative tool when traditional financing is difficult.
A 360 degree or video walkthrough of a property available online. Standard for Toronto luxury listings in 2026. Matterport technology has become the dominant virtual tour format. Allows qualified remote buyers to do serious preliminary review before visiting.
The buyer's final inspection of the property before closing, typically the day before or morning of. Confirms the home is in the agreed condition with all inclusions present and no new damage. Critical step, often skipped by buyers who regret it later.
The document signed by a buyer confirming they have satisfied or given up a condition in their offer. Once all conditions are waived, the offer becomes firm and the deal is binding. Typical conditions (financing, inspection) are waived within 5 to 10 days of acceptance.
Municipal regulations governing what can be built and how property can be used. Toronto zoning bylaws dictate lot coverage, height limits, setbacks, and permitted uses. Essential to understand before purchasing for renovation or addition. Minor variances are possible through the Committee of Adjustment; major rezoning is a multi year process.
The glossary is a living document. If there is a term you are wrestling with that belongs here, write to me and it gets added.
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