Closing Costs When Buying a Home in Toronto

Closing costs are the expenses paid in addition to your down payment to legally transfer ownership of a property.

In Toronto, buyers should typically budget 3% – 5% of the purchase price
(depending on price range, mortgage type, and rebates).

Example:

$800,000 home → roughly $24,000–$40,000 total closing costs.

The Main Closing Costs

Land Transfer Tax (Biggest Cost)

Toronto buyers pay two land transfer taxes:

1. Ontario Land Transfer Tax

2. Toronto Municipal Land Transfer Tax

Both are paid at closing through your real estate lawyer.

Ontario Land Transfer Tax Rates

First $55,000 → 0.5%
$55,001–$250,000 → 1%
$250,001–$400,000 → 1.5%
$400,001–$2,000,000 → 2%
Over $2,000,000 → 2.5%

Toronto Municipal Land Transfer Tax

Uses nearly identical rate tiers and effectively doubles the tax payable within city limits.

Example:

$800,000 home ≈ $24,950 total land transfer tax

First-Time Buyer Rebates

Eligible first-time buyers may receive:

• Up to $4,000 Ontario rebate

• Up to $4,475 Toronto rebate

Real Estate Lawyer Fees & Disbursements

A real estate lawyer completes the legal transfer of ownership.

Typical Toronto costs:

Legal fee: $1,200 – $2,000
Disbursements: $300 – $700

They handle:

• Title search

• Mortgage registration

• Funds transfer

• Property registration

Title Insurance

Protects against ownership disputes or title defects.

Typical cost:

$300 – $500

Usually required by lenders.

Property Tax & Utility Adjustments

You reimburse the seller for prepaid expenses such as:

• Property taxes

• Condo fees

• Utilities

Amounts vary depending on possession date.

Mortgage-Related Costs

Appraisal Fee
$300 – $600 (if required)

Mortgage Default Insurance (CMHC)
Required if down payment is under 20%.

Added to mortgage balance; provincial tax portion payable at closing.

Home Insurance (Required Before Possession)

Proof of insurance must be provided before mortgage funding.

Interest Adjustment

Interest covering the period between closing and your first mortgage payment.

Calculated by your lawyer.

Costs Some Buyers Forget

Common surprises include:

• Moving expenses

• Parking permits

• Condo status certificate fees

• Immediate repairs or upgrades

Experts often recommend saving 4–5% of purchase price in Toronto.

Simple Rule of Thumb

Budget about $20,000 per $500,000 of purchase price in Toronto.