- Land Transfer Tax (LTT) Ontario's Land Transfer Tax is calculated as a percentage of the purchase price on a sliding scale.
- The statement of adjustments settles costs between buyer and seller as of the closing date.
- | Cost | Notes | |------|-------| | Home inspection | Paid before closing; $400–$600 range as of writing — verify | | Appraisal | Often required by lender; sometimes waived | | Moving…
You have the down payment saved, the mortgage is approved, and the offer is accepted. Then someone mentions "closing costs" — and suddenly you need another chunk of cash you may not have planned for. Closing costs for home buyers in Ontario typically run between 1.5% and 4% of the purchase price on top of your down payment, depending on location, price, and what your deal includes. Understanding exactly what you're paying — and why — prevents last-minute surprises at the lawyer's table.
This guide walks through every category of buyer closing costs in Ontario, explains the difference between legal fees and disbursements, and tells you what to bring to closing day.
The Big Three: Where Most of Your Closing Budget Goes
1. Land Transfer Tax (LTT)
Ontario's Land Transfer Tax is calculated as a percentage of the purchase price on a sliding scale. Rates increase at various price thresholds — as of writing, the first dollars of purchase price attract a lower rate, and higher-value properties attract higher rates. Check ServiceOntario's current LTT calculator for the exact figure on your purchase price, as rates and thresholds can change.
First-time buyers: Ontario offers a Land Transfer Tax rebate for first-time purchasers of eligible properties (as of writing, up to a maximum rebate — verify the current cap at ontario.ca). If you are buying in the City of Toronto, a separate Municipal Land Transfer Tax also applies, effectively doubling your LTT bill. That municipal layer does not exist elsewhere in Ontario.
2. Legal Fees
You are legally required to have a lawyer complete a real estate closing in Ontario — a notary cannot do it (more on that below). Legal fees cover the professional time your lawyer spends reviewing title, preparing transfer documents, coordinating with lenders, and completing the registration. Flat-fee real estate lawyers (like Treadstone Law) give you a known, fixed number upfront. See our pricing page for current rates.
3. Disbursements
Disbursements are out-of-pocket costs your lawyer pays on your behalf and then passes through to you. They are separate from legal fees. Common buyer disbursements include:
- Title search and off-title searches — PPSA, execution, tax arrears, etc.
- Title insurance — a one-time premium protecting you and your lender against title defects (see separate article on title insurance vs. survey)
- Land Registry registration fees — set by the province; verify current amounts at ontario.ca
- Teranet e-registration charges — the electronic land registration platform charges per document
- Courier, bank draft, and wire fees — moving mortgage and purchase funds costs real money
- Document preparation and ID verification costs
A reputable lawyer will itemize every disbursement on your final statement of adjustments. Never accept a vague "disbursements included" without asking for a cap or estimate.
Adjustments: Day-of Debits and Credits
The statement of adjustments settles costs between buyer and seller as of the closing date. You will almost always owe the seller a credit for:
- Property taxes prepaid — if the seller has paid taxes beyond the closing date, you reimburse that portion
- Pre-paid utilities (less common; depends on the deal)
You may receive a credit for:
- Tenants' rent paid in advance (if buying a tenanted property)
- Deposits already paid to the seller
These adjustments appear on the statement your lawyer prepares.
Other Costs to Budget For
| Cost | Notes |
|---|---|
| Home inspection | Paid before closing; $400–$600 range as of writing — verify |
| Appraisal | Often required by lender; sometimes waived |
| Moving costs | Highly variable |
| Status certificate review (condos) | Your lawyer reviews the condo corporation's financial health; billed separately |
| HST on new construction | New builds attract HST; resale homes generally do not |
New builds vs. resale: if you are buying directly from a builder, HST applies to the purchase price, though there are rebate programs for principal residences. Confirm your net HST exposure with your lawyer and accountant before signing the Agreement of Purchase and Sale.
Putting It Together: Estimating Your Total Closing Budget
Work through these steps:
- Calculate LTT using the provincial (and if applicable, Toronto municipal) calculator
- Get a fee quote from your real estate lawyer — ask for flat-fee pricing so disbursements are disclosed separately
- Add title insurance premium (your lawyer can quote this once the purchase price and lender are known)
- Add registration fees and disbursements — ask your lawyer for an estimated total
- Add adjustments — your lawyer calculates these from the seller's property tax bill and the closing date
- Add any lender costs — some lenders charge an appraisal fee or administration fee; check your commitment letter
A good rule of thumb: have at least 2% of the purchase price set aside for closing costs beyond LTT, and budget LTT separately.
Frequently asked questions
Can closing costs be rolled into my mortgage?
Generally, no. CMHC-insured mortgages allow the insurance premium to be added to the mortgage balance, but closing costs themselves must be paid from your own funds on closing day. Some lenders offer cash-back mortgages that can offset closing costs — discuss this with your mortgage broker.
What happens if I don't have enough for closing costs on closing day?
Your lawyer will not be able to close the transaction, and you could be in breach of the Agreement of Purchase and Sale. This can result in your deposit being forfeited and the seller suing for additional losses. Budget carefully and confirm the exact amount owed with your lawyer several days before closing.
Do I pay HST on resale homes?
Resale residential properties are generally exempt from HST. New construction homes attract HST, though the New Residential Rental Property Rebate and the New Housing Rebate can offset part of the cost. Confirm with your lawyer and accountant.
Is land transfer tax refundable if the deal falls through?
If the deal fails before registration, LTT is not paid (it is collected on registration). If the deal collapses after registration, LTT recovery becomes a legal dispute — you would need advice specific to your situation.
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