What are typical closing costs when buying a home in Ontario?
Closing costs are expenses beyond the purchase price that you pay to complete a real estate transaction. In Ontario, you should budget roughly 1.5% to 4% of the purchase price for closing costs, though the exact amount depends on your situation.
The largest cost for most buyers is land transfer tax (and the Toronto municipal LTT if applicable). Other common costs include legal fees and disbursements (title search fees, registration fees, and your lawyer's professional fee), title insurance, a home inspection, and an appraisal fee if required by your lender. If you are purchasing a new build, HST may apply on the full price (resale homes are generally HST-exempt on the price, though HST applies to legal fees, insurance premiums, and some services).
Adjust for your deposit (already paid), and any credits you receive on the statement of adjustments. First-time buyers may be entitled to rebates on land transfer tax that reduce the total. Ask your lawyer for a closing-cost estimate as soon as your offer is accepted so you can have the right amount ready.
Key takeaways
- Budget roughly 1.5% to 4% of the purchase price for closing costs.
- Land transfer tax is usually the biggest individual closing expense.
- Legal fees, title insurance, and inspection are other key items.
- Get a closing-cost estimate from your lawyer right after your offer is accepted.