Ontario closing costs: what to budget for beyond the down payment

In Ontario, closing costs are the cash you need on top of your down payment to complete a home purchase. The largest closing cost is usually land transfer tax: on a $700,000 home, $10,475 outside Toronto and $20,950 in Toronto, before any first-time buyer refunds. The other closing costs typically cover legal fees, title insurance, a home inspection, 8% PST on any mortgage default insurance premium, and adjustments with the seller.

Land transfer tax in Ontario

Ontario charges land transfer tax on most property purchases, based on the price. For a home with one or two single-family units, the rates apply in bands:

• 0.5% on the first $55,000.
• 1% on the portion from $55,000 to $250,000.
• 1.5% on the portion from $250,000 to $400,000.
• 2% on the portion from $400,000 to $2,000,000.
• 2.5% on the portion over $2,000,000.

On a $700,000 home, Ontario's land transfer tax comes to $275 + $1,950 + $2,250 + $6,000 = $10,475.

Eligible first-time buyers can get a refund of up to $4,000. Broadly, you must be 18 or older, move into the home within nine months, apply within 18 months, and never have owned a home anywhere in the world, nor your spouse while you were spouses. Full rules are on ontario.ca.

Toronto's municipal land transfer tax

If you buy in the City of Toronto, you pay a second, municipal land transfer tax on top of Ontario's. Up to $2 million, Toronto's rates match Ontario's. From $2 million to $3 million, Toronto's rate is 2.5%. Since April 1, 2026, Toronto's higher bands are:

• 4.40% from $3 million to $4 million.
• 5.45% from $4 million to $5 million.
• 6.50% from $5 million to $10 million.
• 7.55% from $10 million to $20 million.
• 8.60% over $20 million.

Toronto offers eligible first-time buyers a rebate of up to $4,475. Details are on toronto.ca.

Worked example: a $700,000 home in Toronto

• Ontario land transfer tax: $10,475.
• Toronto land transfer tax: $10,475.
• Total before rebates: $20,950.
• A first-time buyer who qualifies for both gets $4,000 + $4,475 = $8,475 back, for a net cost of $12,475.

The same home outside Toronto would cost $10,475 in land transfer tax, or $6,475 for a qualifying first-time buyer after the $4,000 refund. Use our land transfer tax calculator to estimate your own figure. Your real-estate lawyer confirms the exact amount and handles the refund or rebate claim at closing.

Legal fees and disbursements

In Ontario a real-estate lawyer handles the closing. The lawyer reviews the agreement, searches the title, registers the transfer and your mortgage, receives the mortgage funds from the lender, and pays out the seller.

The lawyer's bill includes the lawyer's fee plus disbursements, the out-of-pocket costs the lawyer pays on your behalf, such as searches and registration fees. Ask for a written quote that lists both before you hire a lawyer.

Title insurance

Title insurance protects you, and usually your lender, against certain problems with the property's title, such as errors in public records, some survey issues or title fraud. Title insurance is a one-time premium paid at closing, and your lender may require title insurance. Your lawyer arranges the policy and can explain what the policy covers.

Home inspection

A home inspection is a professional review of the property's condition, done before you firm up your offer. A home inspection is optional, but an inspection can reveal costly problems with the roof, foundation, wiring or plumbing before you are committed. Many buyers make their offer conditional on a satisfactory inspection.

PST on mortgage default insurance

If your down payment is less than 20%, your mortgage needs default insurance. The premium itself is usually added to the mortgage. See down payment rules for how premiums are calculated.

Ontario charges 8% PST on the default insurance premium. You pay the PST in cash at closing; the PST cannot be added to the loan. On a $26,200 premium, for example, the PST is $2,096.

Adjustments with the seller

On closing day your lawyer settles adjustments with the seller's lawyer. Adjustments even out costs the seller has already paid for a period after you take ownership.

The most common adjustment is property tax. If the seller has paid the year's taxes in advance, you reimburse the seller for the days after closing. Condo fees and some utility or rental equipment contracts can be adjusted the same way.

The amount of each adjustment depends on your closing date. The adjustments appear on the statement of adjustments your lawyer gives you before closing.

Other costs to plan for

Buyers often also need money for an appraisal if the lender asks for one, home insurance from closing day, moving costs, and any immediate repairs or furnishings. None of these costs is large on its own, but together these costs add up.

How to budget for closing costs

Add up land transfer tax, legal fees and disbursements, title insurance, inspection, any PST on an insurance premium, and a cushion for adjustments and moving. Ask your lawyer for an estimate early, so you know your total cash needed well before closing. Your lawyer or accountant can confirm whether you qualify for the first-time buyer refunds.

What to do next

Start with the land transfer tax calculator for your price and city. Then use our call-me-back form to talk through the full cash-to-close picture alongside your mortgage. You can also read about buying a home with a broker. All mortgages are subject to lender approval.