Caps and Levies refer to the development charges that will be paid the purchaser on a preconstruction condo unit. Without going in to all of them in detail the city requires the developer and purchasers to pay a portion of the infrastructure costs for building new buildings. These go to fund transit, education, libraries and schools and a are a major revenue source for the city. For more information you can visit the City of Toronto to learn more but the key question as an purchaser is what will it cost you?
Levies are paid at the time of closing on the property. Since the levies in 2023 for example are not established today developers will often limit the purchaser’s exposure by “capping” them at a specific prices to give purchasers a good idea of what their closing costs will be. Since the levies on a two bedroom are a higher than those on a one bedroom. Caps may be $6500 on a one a bedroom and $8500 on a two bedroom. As top agents we are able to save our clients thousands by negotiating lower caps and we often do that before we sell you the unit. Your lawyer should be able to give you a better idea about caps on the unit.