Closing Costs in Ontario: A Home Buyer's Guide to What You'll Pay

Closing costs are the fees and taxes a buyer pays on top of the purchase price to complete an Ontario home purchase. The largest is usually land transfer tax, followed by legal fees, title insurance, and possible costs like an inspection, an appraisal, and adjustments. Ask your lawyer and mortgage professional for a written estimate.

What Are Closing Costs When Buying a Home in Ontario?

Closing costs are the fees, taxes, and adjustments a buyer pays on top of the negotiated purchase price in order to complete the sale and take title to a property. They’re separate from the down payment and from ongoing homeownership costs like property tax and insurance premiums going forward — closing costs are the one-time price of the transaction itself.

Because closing costs are due on or before closing day, alongside the balance of the purchase price, an underestimated closing-cost bill can be a genuine problem for a buyer’s cash flow — not just an inconvenience. The categories below are the ones most Ontario buyers encounter; not every purchase includes every item, and a real estate lawyer or mortgage professional can confirm which apply to a specific transaction.

What Is Land Transfer Tax, and Why Is It Usually the Biggest Closing Cost?

Land transfer tax is a tax the province charges on the transfer of property, calculated against the purchase price, and it is typically the single largest closing cost an Ontario buyer pays. If the property is in the City of Toronto, a separate municipal land transfer tax applies on top of the provincial tax, making Toronto purchases carry two land transfer taxes rather than one.

Because land transfer tax is calculated on price and can involve first-time buyer considerations, provincial-versus-municipal stacking, and rebate eligibility, CRESI covers it in its own companion guide to Ontario land transfer tax. Treat it here as the category to budget for first — your lawyer will calculate the exact amount due as part of preparing your closing statement, and the province and City of Toronto publish current rates and any rebate details directly.

What Legal Fees and Disbursements Should Buyers Expect?

A real estate lawyer’s bill on closing has two parts: their professional fee for the work of closing the transaction, and disbursements — the out-of-pocket costs the lawyer pays on the buyer’s behalf and passes through, such as a title search, registration costs, and courier or administrative charges.

A lawyer’s role in an Ontario purchase includes reviewing the agreement of purchase and sale, conducting or ordering a title search, preparing and registering the transfer, calculating land transfer tax, arranging mortgage registration with the lender, preparing the statement of adjustments, and handling the funds on closing day. Ask a real estate lawyer for a written quote that separates fee from disbursements so you can compare quotes on a like-for-like basis.

What Is Title Insurance and Why Do Buyers Need It?

Title insurance protects against certain problems with a property’s title — such as fraud, errors in the public record, or existing liens — that a title search might not catch or that could surface after closing. It is typically arranged by the buyer’s lawyer as part of closing.

There are two kinds: a lender’s policy, which protects the lender’s interest in the mortgaged property, and an owner’s policy, which protects the buyer’s own interest and is separate from the lender’s. Ask your lawyer which applies to your purchase and what each one covers.

Who Pays for a Home Inspection and an Appraisal, and When?

A home inspection is a cost the buyer typically arranges and pays for directly to the inspector, usually before the purchase agreement becomes firm, so the buyer has information about the property’s condition while an inspection condition is still open. CRESI’s companion guide on home inspections covers what an inspection does and doesn’t tell a buyer.

An appraisal is different: it’s a valuation the buyer’s lender may require to confirm the property supports the mortgage amount being lent, and it’s arranged through the lending process rather than by the buyer directly, though the buyer typically bears the cost. Ask your mortgage professional whether your lender requires one and how it’s billed.

What Is Mortgage Default Insurance and When Does It Apply?

Mortgage default insurance (sometimes called mortgage loan insurance) protects the lender, not the buyer, in the event a borrower defaults. It’s required by federal rule on what’s called a high-ratio mortgage — a mortgage where the buyer’s down payment is below the threshold lenders otherwise require — and the premium is typically added to the mortgage rather than paid as cash at closing.

Some provinces, including Ontario, also charge provincial sales tax on the default insurance premium itself. Unlike the premium, which is usually added to the mortgage, this tax is a separate cash-at-closing cost that generally can’t be financed — so it needs to be part of your closing-funds budget even though the premium it’s calculated on isn’t. Ask your mortgage professional how this applies to your specific mortgage.

This is a financing detail, not a decision a buyer makes independently: whether it applies, which provider insures the mortgage, and how the premium is charged are all questions for a mortgage professional, not something to plan around from a general guide.

Do Buyers Need Home Insurance in Place Before Closing?

Yes. It isn’t a line on your lawyer’s statement of adjustments, but having an active home insurance policy in place is a standard lender funding condition — Ontario mortgage lenders typically won’t release mortgage funds on closing day without proof of coverage that names the lender as loss payee.

Because this has to be arranged before closing rather than paid for at closing, treat it as an early item on your to-do list alongside your mortgage application, not something to leave until the week before possession. Ask your mortgage professional when your lender needs proof of coverage, and get a policy quote from an insurance provider well ahead of your closing date.

What Are Property Tax and Utility Adjustments at Closing?

Ontario closings use a statement of adjustments, prepared by the buyer’s lawyer, to settle amounts the seller has already prepaid or still owes as of closing day — most commonly property tax, and sometimes items like prepaid utility deposits or, for a condo, common expense fees. If the seller has prepaid property tax for a period extending past closing, the buyer typically reimburses the seller’s prepaid share; the reverse can also apply.

These adjustments aren’t a fee charged by a third party — they’re a reconciliation between buyer and seller for costs that don’t divide neatly on closing day. Your lawyer calculates the specific adjustments for your purchase and includes them in your closing funds.

Does HST Apply to Buying a Home in Ontario?

It depends on whether the home is newly built or resale. Newly constructed homes are generally subject to HST on the purchase price, while the sale of a previously lived-in resale home generally is not. This is one of the clearest financial differences between buying new construction and buying resale, and it’s worth confirming early with your lawyer or accountant if you’re considering a new build.

The CRA administers rebate programs connected to HST on new housing — a GST/HST New Housing Rebate for buyers who will occupy the home themselves (or a qualifying relation), and a separate GST/HST New Residential Rental Property Rebate for buyers who intend to rent the unit out rather than live in it. Eligibility for each turns on how the property will actually be used, not just on how the purchase agreement is worded, so confirm your situation with the CRA or a tax professional before you count on either rebate.

What Other Costs Come With Closing?

Moving costs — a moving company, a truck rental, packing supplies, or time off work — aren’t a real estate transaction fee, but they’re a real cash outlay that lands around the same time as everything else on this list, and buyers sometimes overlook them when budgeting for closing. The same goes for smaller items like changing your address, arranging new utility accounts, and any move-in costs specific to a building (a condo corporation’s elevator booking fee or move-in deposit, for example).

Ontario Closing Costs at a Glance

This table is a checklist of categories, not a cost estimate — ask your real estate lawyer and mortgage professional for the actual amounts that apply to your specific purchase.