Ontario First-Time Buyer Closing Costs: The Complete Breakdown

Most first-time buyers in Ontario focus entirely on the down payment and forget that closing day brings a separate set of costs that need to be ready in certified funds. Closing costs typically run between 1.5% and 4% of the purchase price — and that range can represent a significant sum on a typical Ontario home. Underestimating these costs has derailed otherwise well-planned purchases.

This article walks through every line item so you can build a realistic budget before you make your first offer.

Land Transfer Tax (Net of Any Rebate)

Land transfer tax (LTT) is often the largest closing cost. The province of Ontario charges it on every real estate transfer; the City of Toronto charges its own municipal LTT on top for Toronto purchases.

As a first-time buyer, you may be entitled to a rebate on both the provincial and Toronto LTT — but on higher-priced homes, the rebate covers only part of the tax owing. Budget for the net amount (tax minus rebate), not zero.

Your real estate lawyer will calculate the exact amount based on the purchase price and apply any eligible rebates when the deed is registered. Always ask for the net LTT figure in writing before closing day.

Legal Fees

Your real estate lawyer charges for:

• Reviewing the Agreement of Purchase and Sale
• Searching title (the chain of ownership and any registered claims)
• Reviewing the title search results and resolving any issues
• Preparing closing documents and mortgage documents
• Registering the deed and mortgage electronically
• Reporting to you after closing with a full statement of adjustments

At Treadstone Law, our real estate legal fees are flat — you know the number before the file opens. Disbursements (out-of-pocket costs the lawyer pays on your behalf, such as registration fees and courier costs) are added on top of the flat fee but are itemized transparently.

Title Insurance

Title insurance protects you against:

• Existing encumbrances (claims against the property) not discovered during the title search
• Survey discrepancies or encroachments
• Fraud or identity theft affecting the title
• Zoning bylaw violations that existed before your purchase

Most Ontario lenders require title insurance as a condition of the mortgage. Even if your lender did not require it, buying title insurance is strongly advisable for any buyer. Your lawyer will arrange it on your behalf. The premium is a one-time cost paid at closing — there are no ongoing premiums. Verify the current cost with your lawyer, as premiums vary by purchase price.

Home Inspection Fee

Before waiving the inspection condition in your offer, hire a qualified home inspector (look for membership in a recognized inspection association). Inspection fees in Ontario vary depending on the size and type of property. A thorough inspection takes two to four hours and should include a written report.

The inspection fee is paid directly to the inspector — it is not collected by your lawyer and does not appear on the statement of adjustments. Budget for it separately.

Property Tax Adjustment

On closing, the purchase price is adjusted for property taxes. If the seller has already paid property taxes beyond the closing date, you will owe the seller a credit for the overpaid portion. If taxes are in arrears, the seller pays you a credit. This is not a new cost — it is a timing adjustment — but it can result in a few hundred to a few thousand dollars due or received on closing day depending on the municipality's billing cycle.

Utility and Fuel Adjustments

Similar to property taxes, if the seller has prepaid utilities (gas, oil, or propane if there is a tank) beyond the closing date, you may owe a proportional credit. For most buyers purchasing in urban Ontario with municipal services, this is modest. For rural properties with oil tanks, the adjustment can be more significant.

Mortgage Registration Fee

When you take on a mortgage, it must be registered against the title in the Ontario land registry. There is a provincial registration fee for this. Your lawyer pays this as a disbursement and passes it through to you. The fee is a set amount per registration (verify with your lawyer).

HST on New Construction Only

If you are buying a new construction home from a builder, the purchase price may or may not already include HST. This varies by builder and contract. If HST is not included, it can be a substantial addition to the purchase price. First-time buyers who intend to live in the home as a principal residence may qualify for the New Housing HST Rebate — a partial refund of the federal and provincial portions. Builders often factor this rebate into the contract price, with the builder claiming it directly. Read your Agreement of Purchase and Sale carefully and have your lawyer explain the HST treatment before you sign.

Moving Costs and Immediate Repairs

Not a closing cost per se, but budget for moving expenses and a small reserve for immediate repairs or purchases (appliances not included in the sale, replacing filters, locksmith fees to re-key the locks, etc.). Many first-time buyers deplete their savings on closing costs and have nothing left for these predictable day-one expenses.

Summary: What to Have Ready

Frequently asked questions