First-time buyers 1 min read

Closing costs in Ontario, line by line

The down payment is the number everyone plans for. These are the others, and roughly what each one costs.

Nima Nojavan-KheiraddinReal Estate Sales Representative, B.Sc.

Most buyers know their down payment to the dollar. Fewer have a number for everything else that’s due on closing day. In Ontario, plan for these.

Land transfer tax

Ontario charges land transfer tax on every purchase, on a sliding scale. If the home is in the City of Toronto, the municipal land transfer tax is charged on top, at roughly the same rates, so Toronto buyers pay it twice. First-time buyers get a rebate of up to $4,000 on the provincial tax and up to $4,475 on the Toronto tax. On most homes this is the largest closing cost by far. The closing cost calculator works it out for any price.

Your real estate lawyer handles the title search, the mortgage documents, the transfer and the funds. Fees vary; get a written quote that includes disbursements and HST so there are no surprises.

Title insurance

Usually a few hundred dollars, paid once. Most lenders require it, and it protects you against problems with title, survey issues and certain kinds of fraud.

Adjustments

If the seller has prepaid property tax, utilities or condo fees past your closing date, you reimburse them for those days. Your lawyer calculates this in the statement of adjustments a few days before closing.

PST on mortgage default insurance

With less than 20% down, your mortgage must be insured. The premium is added to the mortgage, but Ontario’s 8% sales tax on that premium is not; it’s paid in cash on closing.

Home inspection, appraisal and moving

An inspection is money well spent. Some lenders charge for an appraisal. And don’t forget movers, utility connections, and the first round of things every new home needs.

A sensible rule of thumb is to set aside 1.5% to 4% of the price on top of the down payment, more in Toronto. The calculator will give you a closer number.

Filed under First-time buyersOffers, legal and closing

This article is general information, not legal, tax, financial or mortgage advice. Rules and programs change; confirm details with your lawyer, accountant or lender before relying on them. This material is not intended to solicit properties already listed for sale, individuals under contract with another brokerage, or self-represented parties, as outlined by RECO guidelines.

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The approach

With me, you don’t buy with confidence, you close with it.

I'm Nima. My work in commercial and investment real estate has taught me to look beyond the property itself, to the numbers, the risks and the details that matter. I bring that same approach to every residential transaction.

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