Many home buyers in Ontario are surprised to discover that the down payment isn’t the only significant cash outlay required to purchase a home. Closing costs — the various fees, taxes, and expenses that must be paid before you get the keys — can add up to a substantial amount. Understanding these costs in advance allows you to budget properly and avoid any unpleasant surprises. Here’s a complete breakdown of closing costs in Ontario that every buyer needs to know.

How Much Should You Budget for Closing Costs in Ontario?

As a general rule, buyers in Ontario should budget between 1.5% and 4% of the purchase price for closing costs in Ontario, in addition to their down payment. On a $700,000 home, that’s roughly $10,500 to $28,000 in closing costs. The exact amount varies depending on the purchase price, property type, whether you’re a first-time buyer, and specific circumstances of the transaction. Let’s break down each component.

1. Ontario Land Transfer Tax

The Ontario Land Transfer Tax (LTT) is typically the largest single closing cost for buyers. You can use the Ontario government’s Land Transfer Tax calculator to estimate your exact obligation. It is calculated on a sliding scale based on the purchase price:

0.5% on the first $55,000; 1.0% on the amount from $55,001 to $250,000; 1.5% on the amount from $250,001 to $400,000; 2.0% on the amount from $400,001 to $2,000,000; 2.5% on amounts over $2,000,000.

For a $700,000 purchase in Durham Region, the Ontario LTT would be approximately $11,475.

First-Time Buyer Rebate: First-time home buyers in Ontario are eligible for a refund of up to $4,000 of the Ontario Land Transfer Tax. This effectively eliminates the LTT entirely for homes up to approximately $368,000, and partially offsets it for higher-priced properties.

Note: If you’re buying in Toronto, you also pay a separate Municipal Land Transfer Tax, which is an additional cost on top of the provincial LTT. Buyers outside Toronto (including all of Durham Region) do not pay the Municipal LTT.

2. Legal Fees and Disbursements

A real estate lawyer is required for all Ontario home purchases. Legal fees typically range from $1,500 to $2,500 for a residential transaction, depending on the lawyer and the complexity of the deal. In addition to professional fees, you’ll pay disbursements — out-of-pocket expenses the lawyer incurs on your behalf including title search fees, registration fees, and courier costs. Budget $1,500 to $2,500 all-in for legal representation.

3. Title Insurance

Title insurance protects you against losses from title defects, fraud, survey issues, and certain other risks related to property ownership. Most Ontario real estate lawyers strongly recommend title insurance, and it is increasingly required by lenders. The one-time premium is typically $200 to $400 for residential properties and is paid at closing through your lawyer.

4. Home Inspection Fee

A professional home inspection is strongly recommended before finalizing any resale home purchase. A licensed home inspector will assess the property’s structure, systems, and components and provide a detailed report. Home inspection fees in Ontario typically range from $400 to $600 depending on the size and type of property. While not technically a “closing” cost (you pay this during the conditional period), it is an essential expense to budget for.

5. Property Tax Adjustment

Property taxes in Ontario are typically paid in installments throughout the year. On closing, there will be an adjustment between buyer and seller to account for the portion of the year’s property taxes each party is responsible for. If the seller has pre-paid property taxes for a period that extends beyond the closing date, you’ll reimburse the seller for that period. Conversely, if taxes are owing, an adjustment will be made accordingly. Budget for a potential adjustment of several hundred to a couple thousand dollars depending on timing.

6. Utility and Condo Fee Adjustments

Similar to property tax adjustments, there may be adjustments for prepaid utilities or, if purchasing a condominium, for prepaid condo fees. Your lawyer will calculate these adjustments as part of the closing statement.

7. CMHC Mortgage Insurance Premium (If Applicable)

If your down payment is less than 20%, you’ll pay a mortgage default insurance premium. While this is typically added to your mortgage balance rather than paid out of pocket at closing, you will need to pay Ontario’s 8% Provincial Sales Tax (PST) on the CMHC premium at closing — and this PST portion cannot be added to the mortgage. On a premium of $26,200, the PST would be approximately $2,096. Budget for this if you’re putting less than 20% down.

8. Moving Costs

While not a strictly legal “closing cost,” moving expenses should be factored into your total home-buying budget. See our guide on how to budget for home maintenance after you buy for more long-term cost planning tips. Professional movers in Ontario typically charge $1,000 to $3,000 or more depending on the volume of belongings, distance moved, and time of year. Moving in summer (peak season) tends to be more expensive than moving in fall or winter.

9. Immediate Home Improvements and Repairs

Budget a reserve for any immediate improvements, repairs, or purchases your new home may need. This might include new window coverings, a fresh coat of paint, appliance upgrades, or addressing items identified in your home inspection. A common rule of thumb is to budget 1% of the purchase price annually for maintenance and repairs.

Closing Costs Summary Example: $700,000 Home in Durham Region

Ontario Land Transfer Tax (after first-time buyer rebate if applicable): approximately $7,475 to $11,475; Legal fees and disbursements: approximately $1,800 to $2,500; Title insurance: approximately $250 to $350; Home inspection: approximately $450 to $600; Property tax adjustment: approximately $500 to $2,000; PST on CMHC premium (if applicable): varies. Total estimated closing costs (excluding CMHC PST): approximately $10,500 to $17,000.

Final Thoughts

Understanding and budgeting for closing costs in Ontario is a critical part of preparing for home ownership. Being aware of the total closing costs in Ontario before making an offer will help you plan your finances properly. By knowing what to expect, you can plan your finances properly and avoid being caught short when it’s time to close. Team Rajpal works with buyers throughout Durham Region to ensure they’re fully prepared for every aspect of the home-buying process. Learn what to consider when buying a home in the Durham Region. Contact us today — we’re here to help every step of the way.

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