Canada is a big country with plenty of room to build the house of your dreams. However, there are some important considerations to make before buying land.
For example, zoning laws and taxes are important to consider. Understanding these aspects will prevent unpleasant surprises later on and give you peace of mind during the purchase process.
Buying a Plot of Land
Land can be a great way to invest for a number of reasons. It can provide a steady income, it can appreciate in value and you can build a home on it. It can also be used as a way to diversify your portfolio, and it can help you retire from your job.
It is not uncommon for people to purchase a plot of land in Canada with the hope that it will appreciate in value over time. While it may seem like a straightforward process, there are some important steps to take to ensure that your plot of land is the right investment for you.
Firstly, you will need to decide where in the country you want to buy your plot of land. This will depend on your intended usage and what kind of amenities are available in the area. You should also consider how you will get to the plot of land and whether it is close to a highway or rail line.
Another key consideration is the zoning of the land, as this will determine how it can be used and what buildings can be built. If you plan to build a house on your plot of land, you will need to have the zoning approved before you can proceed with the construction.
As you can imagine, buying a plot of land in Canada can be a complex process. It involves a lot of paperwork and legal fees, and you should always perform your due diligence before making any commitments to a potential seller.
There are different kinds of land in Canada, and they all vary in price, location and development possibilities. You can choose from raw land that is undeveloped or vacant land that has been previously developed. Vacant land is usually cheaper and has the potential for more growth, while raw land is more expensive and may not be as desirable.
When it comes to land prices in Canada, you should always check the market trends and compare them with similar plots that are available in your province. This will help you determine if the price of your land is too high or if it is a good investment.
Vacant Land Listings
Buying vacant land can be an exciting way to invest in real estate. This is because it provides an opportunity to build something new from scratch, which can be a unique experience and offer enormous potential. However, it’s important to consider the risks and drawbacks of buying undeveloped land before you make a decision.
Vacant land can be purchased with a variety of mortgage types, depending on the property and the intended use. Some lenders will require a large down payment, while others may be willing to offer a mortgage for a percentage of the land’s value. Regardless of the loan type, you should be aware of the tax implications of owning vacant land in Canada.
The first step in buying vacant land is to get an appraisal. Appraisers look at sales comps – similar properties that have recently sold – to determine the land’s value. They also assess environmental issues, such as wetlands and streams that are close to the parcel. Typically, vacant land appraisals take a few weeks and can cost as little as $1,000 for residential lots. Commercial land appraisals, on the other hand, can take months to complete and cost a few thousand dollars.
Another important aspect of a vacant land purchase is choosing a professional buyer’s agent. A real estate broker who specializes in vacant land transactions can be invaluable in the process, as they will know all of the legal and regulatory details that can come up during the transaction.
A buyer’s agent can help you find a parcel of land that will best suit your needs and goals. He or she will also be familiar with the local market and can advise you on the most desirable areas to look for vacant land in.
If you have a clear vision for the property, your real estate broker can help you put together an offer to buy the land and negotiate with the seller. Your agent can also provide you with a pre-approval letter from a lender.
Purchasing land that is within a municipality can make the process easier, as it will be subject to municipal services. It’s important to check with your city council about requirements for developing land, such as lot size and setbacks, before firming up an offer on the property.
Urban vs. Rural Land
The land area of Canada’s urban areas is growing much faster than the total amount of farmland, according to Statistics Canada data. In just five years, urbanisation has increased the total population centre area by a mere 1,200 square kilometers compared to a 20,000 square kilometer reduction in agricultural land (Figure 1).
The increase in the number of new urban residents has led to an expansion in the urban versus rural divide in Canada. This is particularly true in smaller cities and towns, where a housing boom has led to a booming construction industry, which in turn is driving up prices.
These increases are also putting strain on municipal services in some small communities, such as Prince Edward County, Ontario, which is struggling with aging water and wastewater infrastructure as builders flood into the region to build dozens of below-market rental units.
Fortunately, many of these developments are focusing on creating compact, mixed-use communities that allow homes, stores, offices and other amenities to be located in close proximity to each other. This is a much more cost-effective way of developing than dividing a neighbourhood into separate urban and rural sections.
However, if urban development continues at this rate, it will likely have a significant impact on agricultural land in Canada. This is because the majority of farms are located in rural areas.
There are a number of ways that municipalities can help protect and preserve farmland. One option is to make sure that all development is compatible with the land’s natural features. This includes protecting green space, farmland, and ecologically sensitive land such as wetlands and woodlots.
Another option is to protect farmland through planning and regulation. This can be done through zoning and other policies that determine the density and intensity of development, as well as by encouraging more compact, mixed-use urban planning.
Finally, there are a number of government programs that support agricultural land protection in Canada. These include the Canada Land Inventory, which classifies soil types and designates certain land as “prime agricultural land,” which is considered to have the potential to produce crops efficiently.
Key Points to Consider
Land is one of the most expensive elements of any construction project. For this reason, it’s important to take your time and do your research. This will help you get the best value for your money and avoid any unpleasant surprises down the road.
While the land itself may not be cheap, it’s not impossible to find a well-located plot for less than you might think. For example, you can find a decent chunk of prime real estate in downtown Toronto for around CAD 1 million per acre.
The most cost-effective option is likely to be a small tract of land in the suburbs, especially in areas that aren’t overly dense. This might be a good option for those looking to get started in home ownership and build their savings account at the same time.
Buying land with the right mix of features and benefits is also a smart move, especially if you’re planning to develop it into a residential property or commercial space down the road. Some key features to look out for include access, infrastructure, and location.
Buying land for the right price is an art, and you should have a qualified real estate agent on hand to guide you through it all. Having a trusted advisor will allow you to make the most informed decisions possible, which in turn will lead to better results in the long run. In the end, you’ll be able to make the most of your investment and enjoy the fruits of your labor for years to come.
Among many other things, David A. Grantham is a contributing author to UmassExtension West Vancouver Blo. He is a renowned expert on real estate in BC.
Born in North Vancouver, Louisiana, Dr. Grantham grew up in Lower Lonsdale. He then went on to complete his business degree at the University British Columbia. As of this writing, Grantham has completed over 100 projects, including the development of a high rise building in Vancouver.
He is a husband, father, son, brother, and friend. He was a dedicated outdoorsman and enjoyed sports such as hunting, fishing, scuba diving, and snow skiing. His wife, Alison Grantham, and their two daughters survived him. He is survived by his wife Alison Martin Grantham and two daughters.