When budgeting for a home purchase in Ontario, closing costs are often underestimated. These additional costs — paid on closing day — typically add 1.5-4% to the purchase price. Here's what to expect.
Land Transfer Tax
Ontario charges provincial land transfer tax on all property purchases. The rate is tiered:
- 0.5% on the first $55,000
- 1.0% on $55,001-$250,000
- 1.5% on $250,001-$400,000
- 2.0% on $400,001-$2,000,000
- 2.5% on amounts over $2,000,000
On a $900,000 home: approximately $16,475 in provincial LTT.
Toronto buyers also pay a Municipal Land Transfer Tax of similar amounts — so Toronto buyers pay double.
First-Time Buyer Rebates
First-time buyers receive a provincial LTT rebate of up to $4,000 and a Toronto LTT rebate of up to $4,475. This can eliminate LTT entirely on homes under $386,000 (provincial) and $400,000 (Toronto).
Legal Fees and Disbursements
- Legal fees: $1,000-$1,800
- Title insurance: $150-$350
- Title search and registration: $200-$400
- Tax certificates: $75-$150
Other Closing Costs
- Home inspection (pre-closing): $400-$600
- CMHC mortgage insurance (if under 20% down): 2.8-4% of mortgage amount
- Property tax adjustment: varies based on closing date
- Utility hookup/adjustment fees: $100-$500
- Moving costs: $1,000-$5,000+