January 1, 2023

Closing Costs in Ontario

Maybe you’ve been working hard for the past five years and have finally saved up enough for a respectable down payment on your first house. Or perhaps you were fortunate enough to receive a sizeable down payment from the generous cash gifts your spouse and you received at your wedding. You might have even withdrawn money from your RRSP savings to use toward your down payment.

Whatever method you used, you were successful in establishing a sufficient financial foundation to buy your first home. But that’s not the only cost you’ll have to save up for. Did you know that the average amount of closing costs for a home ranges from 1.5% to 4% of the purchase price?

First-time buyers frequently underestimate how much they will need. Closing costs should typically be budgeted between 3% and 4% of the purchase price of a resale home. Therefore, closing costs for a $200,000 home could range from $6,000 to $8,000.

Of course, these are only estimates; depending on your location, the type of home you’re buying, and whether it’s a new construction, the actual amount you will need may be higher or lower.


Ontario closing costs can include, but are not limited to:

Land or Property Transfer Taxes

The land transfer tax is a one-time payment made to the provincial government when ownership of the home is transferred from the seller to you. It is likely one of the largest closing costs for buyers in Ontario. First-time homebuyers may be eligible for a land transfer tax rebate that can be applied to both their provincial and municipal land transfer taxes.


For a newly built home, you must pay GST/HST on the purchase price. In the case of a home that has undergone significant renovations, GST/HST may also be applicable. Remember that the builder’s selling price may already include the rebate. For more information, go to the Service Canada or Canada Revenue Agency websites.

Title Insurance

Title insurance can shield a property’s new owner from any financial losses brought on by fraudulent activity during the transfer of ownership. This is an optional expense but might save you from more fees and complications in the future.

Legal Fees

In Ontario, purchasing a home is a major financial decision that necessitates legal advice at various stages. Since only a lawyer can record a legal charge on the property that confirms your ownership, you must have a real estate lawyer or notary act for you in the purchase and mortgage of your property. The amount and complexity of the work required will determine the legal fees.

Inspection Fees

Although not required, home inspection (and the associated fees) are strongly advised. Consider including a home inspection requirement in your offer to purchase. This will guarantee that your new home is thoroughly inspected before you move in for things like water damage or structural integrity, and could reduce expensive repair costs later on. The cost of the inspection, which will be carried out by a home inspector, can range from $500 to $800 or more, depending on how complicated it is.

Appraisal Fees

An appraisal is a closing cost in Ontario that will provide you with an objective assessment of the market value of your home. The price will vary based on the home’s location, size, and condition. The costs, which for a single-family home can range from $300 to $500, are typically requested by the lender. Normally, the appraiser is paid by the buyer.

Interest Adjustments

Your mortgage interest is not a prepaid expense; you pay it after the expense has been incurred. There will be a gap between your closing date and your payment dates if you choose to pay biweekly or monthly. An interest adjustment amount, which is a payment consisting solely of interest and which may be deducted at closing or paid by you when due (your lawyer would confirm), is typically used to close that gap.

Remember, this list includes some of the primary closing costs. There are still others that you will need to keep in mind as you begin putting together your down payment. If you have any questions related to the closing costs of purchasing a home, contact John Burdi, Broker, Burdi Real Estate – RE/MAX West Experts today.

more insights