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Vacant Unit Tax: the city of Ottawa approved this new tax in 2022. This tax applies to residential units, other than your principal residence, which have been unoccupied for an aggregate of more than 184 days during the previous calendar year.   The tax applies only to properties in the residential tax class (excludes commercial, industrial, and multi-residential properties) and is equal to 1% of the property's assessed value. For more information, visit

Down Payment: must be at least 5% of the price of the property. The lender will generally require more than 20% of the purchase price as a down payment for an investment property. For more information, visit 

Mortgage Loan Insurance: this an insurance premium paid by your lender and passed on to you if your down payment is less than 20% of the purchase price. To estimate your premium, visit

Amortization Period of Mortgage: the amortization period is the length of time it takes to pay off a mortgage in full. If your down payment is less than 20% of the price of your home, the longest amortization you’re allowed is 25 years.


Mortgage Annual Interest Rate: you can find current and past interest rates at the following link

Mortgage Penalty: if you break your mortgage early you will incur a penalty. Check with your lender what the penalty would be. Typically, you will pay the higher of 3-months interest or an interest rate differential (if the posted rate of the lender at the time you sell is lower than your original interest rate). For more information, visit

Rental Vacancy Rate: number of vacant days divided by number of rentable days. Example: you hold your investment for 5 years and during this time it is vacant for 120 days => Rentable days: 5x365 = 1825 days, vacancy rate = 120/1825 = 0.06575, multiply by 100 to get 6.575%. You can find present and past vacancy rates at



Yearly property tax: will be stated on the listing of the property or you can use the city of Ottawa's property tax estimator


Real Estate Agent's commission: the commission you pay when selling the property through an agent. This amount varies from agent to agent depending on services provided but is typically between 3%-5%. The commission is split between the listing agent and the buyer's agent.


Land Transfer Tax: tax that must be paid when buying property. Use the following calculator to estimate land transfer tax  For more details on land transfer tax, visit


Property Tax Annual Increase: the 2023 Budget caps the overall municipal tax increase at 2.5 per cent. For more information, visit

Annual Appreciation of Property Value: the average sale price of freehold homes and condos in Ottawa, including Barrhaven, Kanata, Orleans, has increased year-over-year 3.46% on average between 2013-2019. If we consider 2013 to May 2023, this number is 4.04%. The large jump in price that occurred during the covid era has been offset by a significant decline which started near the spring of 2022.

Closing Costs for Purchase and Sale: these include things such as lawyer fees, inspections fees, appraisal fees, and title insurance, when buying or selling property. Lawyers charge in the order of $1000 per transaction.  

Rental Annual Increase: the rent increase guideline for 2023 is 2.5%. For more information, visit

Tax on Capital Gain: you have to pay income tax on half of the capital gain that you made from selling an investment property. This tax is equal to your income tax rate x 50% x (the selling price - purchase price - costs associated with the sale of the property).

Capitalization Rate: this is a measure of the return on investment => yearly return/purchase price. However, if you have initially put a down payment and borrowed the rest of the money, it is best to calculate the capitalization rate as yearly return/down payment to measure what you are getting for the money that you actually put in. Compare this rate to the rates you could get from other kinds of investments. The higher the number the better the investment. The capitalization rate is the inverse of the price-to-earnings ratio (P/E) often used in measuring the performance of stocks. 


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