• Land Transfer Tax

Land transfer tax (LTT) is typically the largest single closing cost and one of the most commonly underestimated. Most provinces charge LTT based on a sliding scale tied to the purchase price. In Ontario, for example, a $700,000 purchase triggers approximately $10,475 in provincial LTT. Buyers purchasing in the City of Toronto pay an additional municipal LTT of roughly the same amount on top — bringing the combined total to around $20,950.

First-time buyers in Ontario are eligible for a rebate of up to $4,000 on the provincial LTT and up to $4,475 on the municipal LTT in Toronto, but this still leaves a substantial net amount owing. Calculate your expected LTT early and set aside funds specifically for it.

• Legal and Title Fees

A real estate lawyer is required in every Canadian property transaction. Their role is to review the Agreement of Purchase and Sale, conduct a title search, register the mortgage and title transfer, and handle the exchange of funds on closing day. Legal fees typically run from $1,500 to $2,500 depending on the complexity of the transaction and local market rates. The fee usually includes disbursements — the hard costs your lawyer pays to search title, register documents, and obtain certificates from the municipality.

• Title Insurance

Title insurance is a one-time premium that protects you against losses arising from title defects — things like undisclosed liens, survey errors, fraud, or zoning violations that were not discovered before closing. Most lawyers will recommend it as standard practice, and the cost is modest: typically $200 to $400 for a residential property. Unlike most insurance policies, title insurance has no annual renewal; the single premium covers you for as long as you own the home.

• Home Inspection Costs

A home inspection is typically paid before closing — usually the day of the inspection itself — and costs between $400 and $700 for a standard residential property. Larger homes, homes with additional structures, or homes with pools may cost more. The inspection is a separate cost from your lawyer's fees and should be budgeted independently. While some buyers in hot markets have been pressured to skip inspections to compete, waiving this step on an older home carries real financial risk.

• Mortgage Default Insurance (CMHC Premium)

If your down payment is less than 20% of the purchase price, your mortgage must be insured by CMHC, Sagen, or Canada Guaranty. The insurance premium is calculated as a percentage of your mortgage amount and ranges from 2.80% (for a 15% to 19.99% down payment) to 4.00% (for a 5% to 9.99% down payment). This premium is added to your mortgage balance rather than paid upfront as cash, but it is still a meaningful cost — on a $500,000 mortgage with a 5% down payment, it adds $20,000 to your loan and increases every monthly payment for the life of the amortization.

Provincial sales tax (PST) on the insurance premium is due at closing and must be paid in cash — it cannot be rolled into the mortgage. In Ontario, PST on CMHC premiums is 8% of the premium amount.

• Property Tax Adjustment

Property taxes are typically paid annually or semi-annually, and the seller may have already paid taxes covering a period that extends past the closing date. In this case, you will owe the seller a prorated reimbursement for the period they paid on your behalf. Conversely, if taxes are in arrears, you may receive a credit. Your lawyer will calculate the exact adjustment as part of the statement of adjustments, but it is common to need several hundred to over a thousand dollars for this item depending on timing.

• HST/GST on New Construction

If you are buying a brand new home from a builder, HST applies to the full purchase price — not just the base price. Federal and provincial components add up to 13% in Ontario, though the federal government and Ontario offer new housing rebates that recover a portion of this for homes below certain price thresholds. For homes above the rebate ceiling ($450,000 federally), the tax after rebates still represents a significant added cost that must be paid at closing. Resale homes are generally exempt from HST unless sold by a GST registrant, which is uncommon in residential transactions.

• Other Costs Buyers Often Overlook

Home insurance must be in effect on closing day before your lender will advance funds, so arrange a policy in advance and get a binder letter from the insurer. Moving costs vary widely depending on distance and volume, but even a local move can run $1,000 to $3,000 for professional movers. If the property has an oil tank, septic system, or well, you may also want specialized inspections beyond the standard home inspection, each adding several hundred dollars. Estoppel certificates and status certificates for condos add a further $100 to $300 and are requested by your lawyer during the review period.

• Closing Cost Summary

The table below shows the most common closing costs for an Ontario resale purchase. Ranges vary by location, purchase price, and transaction specifics.

• How Much Should You Budget?

A general rule of thumb is to set aside 1.5% to 4% of the purchase price for closing costs, in addition to your down payment. For a $700,000 home, that means budgeting $10,500 to $28,000 in closing costs separately from the down payment. First-time buyers in high-LTT provinces like Ontario should skew toward the higher end of that range. Ask your real estate lawyer to prepare a preliminary statement of adjustments early in the process — well before closing day — so you know your exact obligation in advance.

• Questions to Ask Your Lawyer

Your real estate lawyer is your most important resource for understanding the exact closing costs tied to your specific transaction. Ask them for a preliminary statement of adjustments at least two weeks before closing — not the day before — so you have time to arrange the funds. Ask whether all expected adjustments are accounted for, including property tax proration, utility deposits, and any prepaid amounts from the seller.

If you are buying a condo, ask whether the status certificate review revealed any special assessments coming due, since these can become your obligation at closing. If you are buying new construction, ask which HST rebates you qualify for and whether the builder has already applied them to the price, or whether you need to claim them separately. These conversations take minutes and can prevent thousands of dollars in last-day surprises.

• The Bottom Line

Save for closing costs the same way you save for your down payment: separately, deliberately, and early. The buyers who are blindsided on closing day are almost always the ones who treated closing costs as a vague afterthought rather than a specific, calculable number. Run the math for your province and your purchase price, hold those funds in cash, and confirm the exact figures with your lawyer at least two weeks out. Closing day should feel routine, not stressful.