Closing Costs in Ontario: What Home Buyers Should Plan For

Buying a home involves more than the down payment. Ontario buyers should plan for land transfer tax, legal and title-related costs, property-tax or utility adjustments, and other transaction expenses that can vary by the property and financing. FCAC uses 1.5% to 4% of the purchase price as a broad planning range for upfront or closing costs, but the actual amount can be higher or lower depending on the transaction.

Key Takeaways

Closing costs are separate from your down payment — they're transaction expenses on top of the purchase price.
FCAC uses 1.5%–4% of the purchase price as a general planning range, not a guaranteed figure.
Ontario land transfer tax is typically the largest single closing cost for most buyers.
Condo and new-build purchases can involve additional cost categories.

Closing costs vs. down payment

Your down payment goes toward the purchase price itself. Closing costs are the separate expenses involved in actually completing the transaction — things like land transfer tax, legal fees, and adjustments — and they're generally due on top of your down payment, not part of it.

Ontario land transfer tax

Ontario land transfer tax applies to most property purchases in the province and is calculated using graduated rates based on the property's value. It's typically one of the largest closing costs for a buyer. For the full rate structure and the first-time buyer refund, see our Ontario land transfer tax guide.

Legal fees, disbursements and title insurance

A real estate lawyer reviews the purchase agreement, handles the transfer of title, and registers the property in your name. Their fees, along with disbursements (the third-party costs they pay on your behalf) and title insurance, are a standard part of closing. Costs vary by lawyer and by transaction, so it's worth requesting an estimate directly from the lawyer you plan to use.

Inspection and appraisal, where applicable

A home inspection is often a buyer's choice, undertaken to better understand a property's condition before finalizing a purchase. Separately, a lender may require an appraisal as part of financing approval. Whether either applies — and its cost — depends on your specific transaction and financing.

Property-tax and utility adjustments

At closing, costs the seller has already prepaid — such as property tax — are typically adjusted between buyer and seller so each party pays only for their portion of ownership. These adjustments are calculated as part of the closing process, usually by the lawyers involved.

Provincial sales tax on mortgage loan insurance

Important

Ontario applies provincial sales tax to mortgage-loan-insurance premiums, and the lender is not permitted to add that provincial tax to your mortgage. If your mortgage requires loan insurance, plan for this as a separate cost at closing rather than something folded into your monthly payments.

Condos and new builds can differ

Condominium purchases can involve additional items, such as status certificate review. New-build purchases can involve their own set of closing considerations that don't apply to resale homes. If you're considering either, it's worth discussing the specifics of that transaction type before you're at the closing table.

A practical planning checklist

Ask your lawyer for a closing-cost estimate early
A written estimate specific to your transaction is more useful than a general rule of thumb.
Confirm whether mortgage loan insurance applies
If it does, budget separately for the Ontario provincial sales tax on the premium.
Check whether the property is a condo or new build
These can carry additional cost categories worth understanding in advance.
Review the land transfer tax picture
Confirm whether a first-time buyer refund may apply to your purchase.