Closing Costs When Buying a House in Ontario (2026 Guide)
Buying a home is one of the biggest financial decisions you’ll make, and your down payment is only part of the money you’ll need. If you’re planning to purchase a property, understanding the closing costs when buying a house in Ontario can help you avoid surprises and budget with confidence.
In addition to your down payment, you may need to pay land transfer tax, real estate lawyer fees, title insurance, a home inspection, mortgage-related expenses, and other costs associated with completing your purchase.
The amount you’ll need depends on the purchase price, property type, mortgage arrangements, and whether you qualify for any first-time homebuyer rebates.
In this guide, I’ll explain the main closing costs for Ontario home buyers, provide example budgets at different price points, and highlight a few things buyers in Niagara should know before purchasing a home.
How Much Are Closing Costs When Buying a House in Ontario?
As a starting point, many resale-home buyers budget approximately 1.5% to 4% of the purchase price for closing costs, separate from their down payment. This is a broad planning range, not a guaranteed estimate. Your actual costs can fall outside it, particularly if land transfer tax is substantial or you’re purchasing a new-build property.
Your main expenses may include:
- Ontario land transfer tax
- Real estate lawyer fees and disbursements
- Title insurance
- Home inspection fees
- Mortgage appraisal or lender-related fees, if applicable
- Property tax and other closing adjustments
- Moving expenses and utility setup
- Additional expenses for new construction, where applicable
For example, someone purchasing a $600,000 resale home could face several thousand dollars in closing expenses, with land transfer tax often representing the largest component.
The best way to estimate your costs is to calculate land transfer tax first, then add the other expenses that apply to your purchase.
1. Ontario Land Transfer Tax
Ontario land transfer tax is one of the largest closing costs buyers need to plan for.
The tax is generally calculated using the property’s purchase price, with different rates applying to different portions of the price. Your real estate lawyer calculates and collects the amount when the transfer is registered.
For most residential purchases, the provincial rates are:
| Portion of purchase price | Tax rate |
|---|---|
| First $55,000 | 0.5% |
| $55,000.01 to $250,000 | 1.0% |
| $250,000.01 to $400,000 | 1.5% |
| $400,000.01 to $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
These are marginal rates, meaning each rate applies only to the portion of the purchase price within that bracket.
You can review the Ontario government’s official land transfer tax guide for the rules and calculation details.
Ontario land transfer tax examples
Here are examples of provincial land transfer tax for several common purchase prices.
| Purchase price | Provincial land transfer tax |
|---|---|
| $400,000 | $4,475 |
| $500,000 | $6,475 |
| $600,000 | $8,475 |
| $700,000 | $10,475 |
| $800,000 | $12,475 |
| $1,000,000 | $16,475 |
These figures assume a standard taxable purchase and do not include any rebate.
As you can see, land transfer tax can add thousands of dollars to the cost of buying a home. Fortunately, eligible first-time buyers may be able to reduce this expense significantly.
2. First-Time Homebuyer Land Transfer Tax Rebate
If you’re buying your first home, you may qualify for Ontario’s first-time homebuyer land transfer tax refund.
Eligible buyers can receive a refund of up to $4,000 toward Ontario land transfer tax.
For a qualifying buyer purchasing a home for $500,000, the provincial land transfer tax would normally be $6,475. After a full $4,000 refund, the remaining provincial tax would be $2,475.
Eligibility requirements apply, so don’t assume that you qualify simply because this is the first property you’re purchasing on your own.
Generally, requirements include:
- Being at least 18 years old
- Never having owned an eligible home, or an interest in one, anywhere in the world
- Meeting the applicable requirements relating to your spouse’s previous home ownership
- Intending to occupy the property as your principal residence within the required period
- Meeting applicable citizenship or permanent residency requirements
Special circumstances can affect eligibility, particularly when purchasing with someone who has owned property before.
The refund is generally claimed during registration through your real estate lawyer. If it isn’t claimed at that time, an eligible buyer may be able to apply afterward within the prescribed deadline.
Read the Ontario government’s first-time homebuyer refund requirements before relying on the rebate in your budget.
What if only one buyer is a first-time homebuyer?
This is an important question for couples and co-buyers.
If one purchaser has previously owned a home, the amount of the refund may be reduced or the purchase may not qualify for a refund in the way you expect.
The rules depend on the ownership interests and circumstances of everyone involved. Ask your real estate lawyer to confirm the amount you can claim before finalizing your closing budget.
3. Does Toronto Have an Additional Land Transfer Tax?
Yes. Properties located within the City of Toronto can be subject to both Ontario’s provincial land transfer tax and Toronto’s municipal land transfer tax.
This means buyers in Toronto may have a substantially higher tax bill than buyers purchasing a similarly priced property elsewhere in Ontario.
Toronto has its own calculation rules and first-time buyer rebate program. The provincial and municipal rebates are separate and have their own eligibility requirements.
If you’re purchasing in Niagara-on-the-Lake, St. Catharines, Niagara Falls, Welland, or another Niagara Region municipality, you generally pay Ontario’s provincial land transfer tax rather than Toronto’s municipal tax.
For buyers considering a property in Toronto, use the City of Toronto’s official land transfer tax calculator to estimate the municipal component.
4. Real Estate Lawyer Fees and Disbursements
A real estate lawyer is responsible for the legal work required to complete your purchase.
Your lawyer typically reviews the transaction documents, conducts relevant title searches, coordinates with your mortgage lender, calculates closing adjustments, registers the transfer, and arranges for the funds to be distributed.
Legal expenses may include:
- The lawyer’s professional fee
- Title searches and related searches
- Title registration expenses
- Title insurance, where applicable
- Administrative expenses and other disbursements
- Applicable HST
For budgeting purposes, you might set aside approximately $1,500 to $3,000 for legal fees and associated expenses on a straightforward residential resale purchase. This is only a planning estimate; obtain an itemized quote from your lawyer because the total varies by firm and transaction complexity.
A new build, rural property, complicated title history, or unusual ownership arrangement may involve additional work.
When comparing legal quotes, ask whether the amount includes HST, disbursements, title insurance, and mortgage-related work.
5. Title Insurance
Title insurance is commonly arranged as part of a residential real estate purchase.
It can provide coverage for certain title-related risks, subject to the policy’s terms, conditions, exclusions, and limits. Depending on the policy, coverage may address issues such as certain title defects, fraud, or specific problems involving ownership or registration.
It is not a substitute for a home inspection, and it does not cover every possible problem with a property.
The cost depends on factors such as the property’s value, insurer, and type of transaction. Your lawyer can explain whether title insurance is appropriate and what the policy covers.
In many transactions, the premium is included in the lawyer’s closing statement rather than paid as a separate bill directly to the insurer.
6. Home Inspection Costs
A home inspection is another expense worth budgeting for, particularly when purchasing a resale property.
A qualified home inspector can examine accessible components of the home, including the roof, foundation, electrical system, plumbing, heating, ventilation, and visible signs of moisture or other concerns.
The inspection can help you better understand the property’s condition and identify issues that may warrant further investigation.
As a rough planning estimate, a standard residential inspection might cost approximately $400 to $700 or more, depending on the property’s size, location, and complexity.
Additional inspections may be appropriate for certain properties, including:
- Older homes with potential electrical or plumbing concerns
- Rural properties with wells or septic systems
- Homes with wood-burning appliances
- Properties with suspected moisture or structural issues
- Homes where specialized systems need further assessment
Not every property requires the same inspections. Discuss the property’s characteristics with your agent and qualified inspectors to determine which assessments make sense.
If your offer includes an inspection condition, make sure you understand the condition’s wording, deadlines, and requirements before waiving it.
7. Mortgage and Lender-Related Costs
Depending on your mortgage and lender, you may encounter additional expenses when arranging financing.
Possible costs include:
- An appraisal fee, if one is required and charged to you
- Certain lender administration or processing fees
- Costs associated with specific mortgage products
- Mortgage default insurance premiums, where applicable
What is mortgage default insurance?
In Canada, mortgage default insurance is generally required for many mortgages where the down payment is less than 20% of the purchase price, subject to applicable eligibility rules.
This insurance protects the lender, not the buyer.
The premium may be added to the mortgage balance, but applicable provincial sales tax on the premium may need to be paid separately at closing. Your lender can confirm the amount and payment arrangements.
Don’t automatically count the entire premium as an upfront cash expense if it is being financed into the mortgage.
Will my lender charge for an appraisal?
Some lenders cover appraisal costs, while others may require the buyer to pay. An appraisal may be used to help establish the property’s value for lending purposes.
Ask your mortgage professional which fees apply to your specific financing arrangement and when they must be paid.
8. Property Tax and Other Closing Adjustments
When a property changes hands, the buyer and seller may need to divide expenses that have already been paid or incurred.
These are called closing adjustments.
Property taxes are a common example.
Suppose the seller has already paid property taxes covering a period after your purchase closes. You may need to reimburse the seller for the portion attributable to your ownership period.
If taxes remain unpaid, the adjustment may work differently.
Depending on the property and agreement, other adjustments may involve:
- Condominium fees
- Certain utility charges
- Municipal charges or amounts owing against the property
- Other prepaid or outstanding expenses
Your real estate lawyer calculates the applicable adjustments and includes them in the closing statement.
The exact amount depends on the closing date, payment history, property type, and terms of the agreement.
This is why your final cash requirement can differ from an estimate prepared when you first make an offer.
9. What About HST When Buying a Home?
For a typical resale home purchased from an individual, HST generally does not apply to the purchase price.
However, new construction and substantially renovated properties can have different tax treatment.
When purchasing a newly built home from a builder, carefully review the agreement to understand:
- Whether HST is included in the advertised purchase price
- Whether any new housing rebate is assumed in the price
- Whether the agreement requires you to repay a rebate if you don’t qualify
- Which development charges, levies, or other adjustments may be payable
- Whether the builder’s closing-cost estimates include all applicable expenses
Some new-home purchases may qualify for federal or provincial housing rebates, depending on the program and eligibility rules. Programs and eligibility can change, so verify the current rules rather than relying on an older online calculator.
The Canada Revenue Agency provides information about the GST/HST new housing rebate.
If you’re considering a new build, have your lawyer review the purchase agreement and request a detailed estimate of closing adjustments before committing to the purchase.
10. Other Expenses to Consider When Buying a House
Some expenses aren’t technically closing costs, but they still affect how much money you need when moving into your new home.
Consider budgeting for:
- Moving services or a rental truck
- Utility account setup or deposits, where applicable
- Home insurance
- Immediate repairs or maintenance
- Appliances or furnishings, if not included
- Changing locks or arranging locksmith services
- Internet installation
- Initial supplies and unexpected expenses
For rural homes in Niagara, you may also need to budget for inspections or servicing related to wells, septic systems, or other property-specific infrastructure.
It is sensible to keep some money available after closing rather than using every dollar of your available savings toward the purchase.
11. Example: Closing Costs on a $500,000 House in Ontario
Let’s put the numbers together for a hypothetical $500,000 resale home outside Toronto.
Assume the buyer is not eligible for the first-time homebuyer rebate and has the following estimated expenses.
| Expense | Estimated amount |
|---|---|
| Ontario land transfer tax | $6,475 |
| Legal fees and disbursements, including estimated applicable tax | $2,000 |
| Home inspection | $550 |
| Other lender or transaction expenses | $300 |
| Estimated total | $9,325 |
Under these assumptions, the buyer should budget approximately $10,000 in the listed closing expenses, separate from the down payment.
This is an illustration, not a quote. Actual legal fees, inspection fees, lender costs, title insurance arrangements, and adjustments can vary. The example excludes moving costs, home insurance, and other personal expenses.
What if the buyer qualifies for the first-time homebuyer rebate?
If the buyer qualifies for the full $4,000 Ontario land transfer tax refund, the estimated provincial land transfer tax would decrease from $6,475 to $2,475.
The example’s estimated total would then fall to $5,325, assuming all other amounts remain unchanged.
That is a substantial difference, which is why it is worth checking eligibility before deciding how much money to set aside.
12. How Much Money Do You Need Besides Your Down Payment?
The most useful way to prepare for closing is to calculate your down payment and closing expenses separately.
For example, consider a $500,000 home purchased with a 10% down payment.
The down payment would be $50,000. Using the non-first-time-buyer example above, estimated closing costs would be another $9,325.
That means the buyer would need approximately $60,000 for the down payment and the listed closing expenses combined, before accounting for any additional costs or adjustments.
Mortgage default insurance and lender rules may also affect the overall financing arrangement.
Your lender can confirm the minimum down payment requirements and whether any mortgage insurance premium applies.
The important point is to avoid treating your entire savings balance as available for the down payment. You need to account for closing expenses and leave a reasonable cushion for the unexpected.
13. How to Prepare for Closing Day
Once your offer has been accepted, there are several practical steps you can take to make the closing process smoother.
Get a lawyer’s quote early. Ask for a breakdown of legal fees, disbursements, title insurance, and other expected expenses.
Confirm your financing. Review your mortgage terms and ask your lender about any fees, insurance premiums, or documentation requirements.
Estimate land transfer tax. Calculate the provincial tax and determine whether any first-time buyer refund or other applicable relief may be available.
Arrange insurance. Your lender and lawyer may require proof of home insurance before the transaction closes.
Review your statement of adjustments. Your lawyer will provide the final figures for the money required to complete the purchase.
Arrange your closing funds. Confirm the required amount, payment method, and deadline with your lawyer. Do not assume a personal cheque or an ordinary bank transfer will be accepted.
Planning these details in advance helps prevent last-minute surprises.
Frequently Asked Questions About Closing Costs in Ontario
What are the closing costs when buying a house in Ontario?
Common expenses include provincial land transfer tax, legal fees, title insurance, home inspection fees, mortgage-related expenses, and closing adjustments. Moving and home setup expenses should also be included in your overall budget.
How much should I budget for closing costs in Ontario?
A rough starting point for many resale purchases is 1.5% to 4% of the purchase price, separate from your down payment. The actual amount depends on land transfer tax, eligibility for rebates, legal costs, and the specifics of your transaction.
Do first-time homebuyers pay land transfer tax in Ontario?
They may still pay some land transfer tax, but eligible first-time buyers can receive an Ontario refund of up to $4,000. Eligibility requirements apply, and the refund may not cover the entire tax bill.
Do buyers pay land transfer tax in Niagara?
Yes. Buyers generally pay Ontario’s provincial land transfer tax when purchasing a taxable property in Niagara. Toronto’s separate municipal land transfer tax generally does not apply to purchases in Niagara Region municipalities.
Who pays the lawyer fees when buying a house?
Buyers generally pay their own real estate lawyer’s fees and associated disbursements for the purchase. The seller normally has their own lawyer for the sale.
Do I need a home inspection when buying a house?
An inspection can provide valuable information about a property’s visible condition and help identify issues requiring further investigation. Whether to arrange one, and how to structure any inspection condition, depends on the property and the agreement.
Are closing costs included in the mortgage?
Usually, buyers need to plan to pay their closing expenses separately from their down payment. Some mortgage-related premiums or expenses may be financed or handled differently, depending on the product and lender. Confirm the requirements with your mortgage professional.
Are closing costs higher on a new-build home?
They can be. New construction may involve additional charges, HST-related considerations, builder adjustments, and other expenses that differ from a typical resale purchase. Review the purchase agreement with your lawyer and request a detailed estimate.
When do you pay closing costs?
Many expenses are settled through your lawyer immediately before or on closing day. Other costs, such as a home inspection or certain lender fees, may be paid earlier.
Buying a Home in Niagara? Let’s Plan Your Next Move.
Understanding closing costs is an important part of preparing to buy a home. But knowing what to budget for is only one piece of the puzzle.
You also need to find the right property, understand local market conditions, evaluate comparable sales, and structure an offer that makes sense for your situation.
As a Niagara Region real estate agent, I help buyers navigate the process with a practical, data-driven approach. Whether you’re a first-time buyer, moving up to a larger home, downsizing, or relocating to Niagara, having a clear plan can make the experience much more manageable.
Thinking about buying a home in Niagara-on-the-Lake, St. Catharines, Niagara Falls, or the surrounding area?
Visit westonsagle.ca to learn more about working with me, explore your buying options, or get in touch to discuss your plans.
Let’s make sure you understand the numbers before you make your next move.
Disclaimer: This article is for general informational purposes only and does not constitute legal, mortgage, tax, or financial advice. Closing costs and rebate eligibility vary by transaction and may change. Confirm your figures with your real estate lawyer, mortgage professional, and the relevant government authorities.