Closing Costs in Ontario, Line by Line
The purchase price is not the cheque you write — land transfer tax, legal fees, adjustments and a handful of smaller lines typically add several thousand dollars on top, and buyers who budget for them don't get surprised at the lawyer's office.
The big one: land transfer tax
For most Ontario buyers, land transfer tax is the largest closing cost by a comfortable margin. Ontario charges it on every purchase, on a sliding scale that tops out at 2% on the portion of the price above $400,000 — a mid-priced home generates a tax bill in the several-thousand-dollar range, and an expensive one well into five figures. Buy inside Toronto and you pay a second, municipal land transfer tax on top, at essentially the same rates, roughly doubling the line. First-time buyers get meaningful relief: refunds of up to $4,000 provincially and up to $4,475 from Toronto, as of writing. Because this single line drives the whole closing-cost budget, it's worth understanding in detail — we walk through the brackets and worked examples in our companion guide to land transfer tax.
Legal fees and disbursements
Your real estate lawyer handles the title search, registers the transfer and mortgage, and makes sure the money lands where the contract says. You'll pay two things: the lawyer's professional fee, and disbursements — the out-of-pocket costs they incur on your behalf, such as registration fees, search charges, software and courier costs. Together, legal costs on a typical residential purchase land in the low thousands of dollars, varying with the property and the complexity of the deal. Condos, rural properties with wells and septic systems, and purchases with problems in the title search cost more than a clean suburban closing. Get the quote in writing before you retain, and ask whether it's all-in.
Title insurance
Title insurance protects you and your lender against problems with the property's title that a search might miss — old fraud, survey defects, certain bylaw or permit issues, and errors in public records. It's a one-time premium paid at closing, usually a few hundred dollars, and virtually every lender requires a policy in their favour; the owner's coverage that comes with it is some of the cheapest peace of mind in the entire transaction. Your lawyer arranges it as part of closing.
Adjustments: settling up with the seller
Some costs belong partly to the seller and partly to you, and closing day is when they're divided. Property taxes are the big one: if the seller prepaid taxes past the closing date, you reimburse them for your share; if they underpaid, you get the credit. The same logic applies to prepaid utilities on metered accounts, condo maintenance fees paid in advance, and a rented hot water tank or other equipment contracts you're assuming. Adjustments can swing a closing statement by hundreds or a few thousand dollars in either direction, and they surprise buyers precisely because nobody mentioned them during the excitement of the offer. Your lawyer's statement of adjustments lays them all out line by line — read it before closing day, not after.
The smaller lines that still add up
- Home insurance. Must be in place for closing day; your lender requires proof. The first premium is a closing-period cost even if you pay it monthly after.
- Appraisal fee. Your lender may order an appraisal of the property; the cost is often passed to you, typically a few hundred dollars.
- Home inspection. Paid during the conditional period rather than at closing, but it's part of the true cost of buying — a few hundred dollars well spent.
- Moving and setup. Movers, utility hookup and service transfer fees, a locksmith. Individually small, collectively not.
- Interest adjustment. Depending on when in the month you close and when your first mortgage payment falls, there may be a small interest adjustment to bridge the gap.
Extra lines on new builds
Buying a newly built home adds lines that resale buyers never see. HST applies to new construction — 13% in Ontario on the purchase price, partially offset by rebates in some cases — and builder agreements commonly add development and education levies, utility connection and meter fees, and enrolment fees for the Tarion warranty program. These "closing adjustments" in builder contracts have surprised more than a few buyers by adding up to a five-figure sum. If you're buying new, have a lawyer review the agreement during the cooling-off or review period with these charges specifically in mind.
How to budget
A common planning approach is to set aside roughly 1.5% to 4% of the purchase price for closing costs on a resale home, with Toronto purchases toward the top of that range because of the double land transfer tax — then refine the estimate once you know the actual price and location. Your deposit counts toward your down payment, not toward these costs; they're separate money, needed in your lawyer's hands a few days before closing. The buyers who sail through closing are the ones who asked for the full list early. Ask yours at the offer stage, not the week of closing.
Next step
Closing costs shrink as a surprise once you've priced the whole purchase — browse homes with the full picture in mind at HomesFound search. Two lines in this list reward a closer look: title insurance, the one-time premium most buyers can't explain, and — for Toronto purchases — the second land transfer tax the city adds on top.