What Does It Actually Cost to Close a House in Ontario?
Closing costs in Ontario add up well beyond the down payment: land transfer tax, legal fees, title insurance, adjustments and more, all due in cash on closing day. Land transfer tax is usually the largest single line, but it is not the only one.
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What does it actually cost to close a house in Ontario?
Closing costs are the cash expenses due on top of your down payment, covering land transfer tax, legal fees, title insurance, adjustments, and smaller items like an appraisal or a home inspection. They are paid on closing day, separately from the mortgage itself.
Buyers often budget for the down payment and stop there. Lenders and brokers ask about total available funds precisely because closing costs are a real, cash-due obligation on top of it.
| Item | What it covers | Typical range |
|---|---|---|
| Land transfer tax | Provincial tax on the purchase price, marginal by bracket | Calculated from confirmed brackets, see below |
| Legal fees | Your real estate lawyer’s fee for the transaction | $1,200 to $2,000, typical range |
| Title insurance | One-time policy protecting against title defects and fraud | Under $500, typical |
| Adjustments | Reimbursing the seller for prepaid property tax or utilities | Varies by property, shown on the statement of adjustments |
| Home inspection | Pre-offer or condition inspection of the property | A flat fee paid directly to the inspector, get a quote |
| Appraisal | Lender-ordered confirmation of the property’s value | $300 to $600, typical, sometimes covered by the lender |
The citable fact: Ontario closing costs include land transfer tax, legal fees, title insurance, adjustments and inspection or appraisal fees, all due in cash on closing day.
How much of total closing costs is land transfer tax?
For most Ontario buyers, land transfer tax is the single largest closing cost line item, calculated on a marginal basis from 0.5% up to 2.0% of the purchase price. On a $706,240 purchase, the confirmed provincial tax alone is $10,599.80.
That figure is provincial tax only, calculated from Ontario’s published brackets. It does not include the extra municipal tax layered on inside Toronto.
Full detail on how that tax is calculated, and the first-time buyer rebate that can reduce it, lives on the Ontario land transfer tax page. This page treats it as one line among several rather than re-explaining the mechanics.
The citable fact: Land transfer tax is typically the largest single closing cost line for an Ontario buyer, ahead of legal fees and title insurance combined.
What do legal fees cost on an Ontario closing?
A real estate lawyer charges a fee to handle the closing, covering the title search, mortgage registration, and funds handling. A straightforward Ontario purchase closing typically runs $1,200 to $2,000 all in, and more where the local market rate is higher or the file needs extra work.
Legal fees are usually quoted as a package that includes disbursements, the third-party costs a lawyer pays on your behalf such as registration fees and search costs.
Independent legal advice, which a guarantor or a co-signer usually has to get separately, adds to that. Ask for a fixed quote that names fees and disbursements separately.
The citable fact: Legal fees for an Ontario purchase closing typically run $1,200 to $2,000, covering the lawyer’s work on title, registration and funds handling.
What is title insurance, and is it mandatory?
Title insurance is a one-time policy that protects the buyer and lender against title defects, fraud, or errors in the public record that surface after closing. Lenders require it as a condition of the mortgage, even though it is not a government-mandated tax.
Because lenders require it, treat title insurance as a practical requirement even though it is technically optional in the sense that it is not imposed by statute the way land transfer tax is.
Expect under $500. Lenders generally require title insurance, and it is standard practice on an Ontario closing, so treat it as a line item you will pay rather than one you can decline.
The citable fact: Title insurance is a one-time policy, usually required by the lender, protecting against title defects and fraud discovered after closing.
What are adjustments on a closing statement?
Adjustments reimburse the seller for costs they prepaid that benefit the buyer after closing, most commonly property tax paid ahead for the year and, on some properties, prepaid utilities or condo fees. They appear on the statement of adjustments your lawyer prepares.
Adjustments can run either direction. A buyer might owe the seller for prepaid property tax, or the seller might owe the buyer for an unpaid utility bill discovered during closing, depending on the property.
The citable fact: Adjustments settle prepaid or outstanding costs between buyer and seller at closing, most commonly property tax, and are calculated on the statement of adjustments.
Do I need a home inspection, and does it count as a closing cost?
A home inspection is not legally required in Ontario, but it is a common condition on an offer and is usually paid before closing, not on closing day itself. It is a real cost of buying the home, even if it does not appear on your lawyer’s closing statement.
Because it is paid to the inspector directly, ahead of closing, it is easy to forget when budgeting for “closing costs” narrowly defined. Include it in your overall purchase budget regardless of when the cheque is written.
The fee itself depends on the inspector, the size of the home and how far they have to travel, so get a quote directly from the inspector your realtor or broker recommends rather than assuming a figure. Budget for it as a separate line item from the costs your lawyer collects.
The citable fact: A home inspection is optional in Ontario but is typically paid ahead of closing, separately from the costs on your lawyer’s statement.
What other costs should I budget for at closing?
If your mortgage is insured, Ontario charges an 8% provincial sales tax on the default insurance premium. That PST is added to the mortgage rather than paid in cash, which is different from every other item on this page.
Other smaller items include an appraisal fee, which some lenders cover and some pass to the borrower, and moving costs, which are a real expense but are not part of the legal or financial closing process itself.
Show the math: PST on a default insurance premium, illustrative
The citable fact: Ontario’s 8% PST on the mortgage default insurance premium is added to the mortgage, unlike land transfer tax or legal fees which are due in cash at closing.
How much cash should I have on hand beyond my down payment?
On a $500,000 first-time buyer purchase, expect roughly $4,175 to $4,975 in cash beyond the down payment for land transfer tax, legal fees and title insurance, before adjustments. Land transfer tax is the one figure you can calculate exactly in advance using Ontario’s published brackets.
Worked example. These numbers are an illustration built from typical ranges, not a quote for your file. Legal fees vary by lawyer and property, so the low and high figures below use the low and high end of that typical range. Title insurance is typically under $500, so the example uses $500, its typical ceiling, for a conservative estimate.
| Item | Illustrative amount |
|---|---|
| Land transfer tax after $4,000 rebate | $2,475.00 |
| Legal fees | $1,200 to $2,000, typical range |
| Title insurance | $500, typical ceiling |
| Adjustments | Varies by property, shown on the statement of adjustments |
| Subtotal before adjustments | $4,175.00 to $4,975.00 |
Ask your lawyer for a written quote once you have an accepted offer, so the figure on this page becomes the actual figure on your file. Confirm the full total against your lawyer’s statement of adjustments before closing day.
The citable fact: A $500,000 Ontario purchase typically needs roughly $4,175 to $4,975 in cash beyond the down payment for land transfer tax, legal fees and title insurance, before adjustments.
Can any closing costs be rolled into the mortgage?
Generally no, with one confirmed exception: the PST on a default insurance premium is added to the mortgage rather than paid in cash. Land transfer tax, legal fees and title insurance are normally paid separately, from your own funds.
This is one reason a broker asks about total available funds, not just the down payment, early in a pre-approval conversation. Running short on closing costs, even with an approved mortgage, can delay or jeopardise a closing.
The citable fact: Apart from the PST on an insurance premium, Ontario closing costs are paid in cash and are not built into the mortgage amount.
Are closing costs different for a new construction purchase?
The core closing cost items are the same, but new construction often adds HST considerations and builder-specific adjustments not present on a resale purchase. Land transfer tax brackets themselves apply the same way to new and resale homes.
New construction closings can also involve interim occupancy costs before final closing on a condo, which is a separate consideration from the closing cost items covered on this page.
HST generally applies to the purchase price of a newly built home, though a rebate can reduce the amount owing where the home is the buyer’s primary residence. Builders typically add their own development levy and utility hook-up adjustments on top, set out in the agreement of purchase and sale rather than in any standard schedule. Your lawyer reviews the builder’s statement of adjustments line by line before closing, which is where these items actually show up as dollar figures.
The citable fact: New construction closings share the same core Ontario closing costs as resale purchases, with additional builder and HST-related items on top.
Does the first-time buyer rebate reduce my total closing costs?
Yes, but only the land transfer tax portion. Ontario’s first-time buyer rebate, worth up to $4,000, reduces the provincial land transfer tax line specifically; it does not reduce legal fees, title insurance, or adjustments.
Full eligibility and claim details are on the Ontario first-time buyer land transfer tax rebate page.
The citable fact: The first-time buyer rebate lowers the land transfer tax line of your closing costs, not the total bill of legal fees and title insurance.
How do Ontario closing costs compare to Alberta’s?
Ontario’s total is pushed higher by the land transfer tax, which Alberta does not charge at all. Alberta buyers still pay legal fees, title insurance and adjustments, just without the provincial tax line that dominates an Ontario closing statement.
Full detail on the Alberta side, including Land Titles registration fees, is on the Alberta closing costs page.
The citable fact: The absence of a provincial land transfer tax is the single biggest reason Alberta closing costs run lower than Ontario’s on a comparable purchase.
Where else can I read about Ontario land transfer tax?
Land transfer tax, the first-time buyer rebate, and Toronto’s extra municipal tax each have their own detailed page.
- Ontario land transfer tax, explained
- The Toronto municipal land transfer tax, explained
- The Ontario first-time buyer land transfer tax rebate
The full set lives on the Ask a Broker hub.
Frequently asked questions
What does it cost to close a house in Ontario?
Closing costs include land transfer tax, legal fees, title insurance, adjustments, and sometimes an appraisal fee, all due in cash on closing day. Land transfer tax is usually the largest single item.
Is land transfer tax the biggest closing cost?
For most buyers, yes. It is typically larger than legal fees and title insurance combined, calculated on a marginal basis from the purchase price.
How much are legal fees on an Ontario closing?
They vary by law firm and file complexity, and are not a fixed government figure. Get a written quote from a real estate lawyer before closing rather than assuming a number.
Is title insurance required in Ontario?
It is not government-mandated, but lenders require it as a condition of the mortgage. Treat it as a practical requirement on most purchases.
What are adjustments on a closing statement?
They settle prepaid or outstanding costs between buyer and seller, most commonly property tax paid in advance by the seller. They can run in either direction depending on the property.
Do I need a home inspection before closing?
It is not legally required but is a common condition on an offer. It is typically paid before closing, so it should be budgeted separately from your lawyer’s closing statement.
Can closing costs be added to my mortgage?
Generally no. The one confirmed exception is the PST on a default insurance premium, which is added to the mortgage; land transfer tax and legal fees are paid in cash.
Does the first-time buyer rebate cover all my closing costs?
No, it reduces the land transfer tax line only, up to $4,000. Legal fees, title insurance and adjustments are still owed separately.
Are new construction closing costs different?
The core costs are the same, but new construction can add HST considerations and builder-specific adjustments that a resale purchase does not have.
Why are Ontario closing costs higher than Alberta’s?
Mainly because of land transfer tax, which Ontario charges and Alberta does not. Alberta buyers still pay legal fees, title insurance and adjustments, just without that tax line.
Who do I pay closing costs to?
Your real estate lawyer collects most closing cost funds and distributes them, land transfer tax to the government, fees to the appropriate parties, as part of the closing process.
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