Most buyers budget carefully for the down payment and then get surprised by the second bill — the one that lands on closing day. Closing costs are the one-time expenses you pay to actually complete the purchase and take title, and they sit on top of your down payment. In Ontario, a reasonable planning range is 1.5% to 4% of the purchase price, with land transfer tax usually the single largest line — and much larger inside the City of Toronto, which charges its own municipal tax on top of the provincial one.
The good news is that closing costs are predictable. Once you know the line items, you can price them out to within a few hundred dollars well before you make an offer. Here is the full list, what each one runs, and two worked GTA examples so you can see the real numbers.
What “closing costs” actually covers
Closing costs are separate from your down payment and separate from your ongoing monthly mortgage payment. They are the transactional costs of buying — taxes, legal work, insurance, and inspections — most of which are due on or shortly before your closing date. Some are fixed fees, some scale with the price of the home, and a couple depend on how you finance the purchase. Lenders also want to see that you have these funds available, so they factor into how much home you can comfortably carry.
The main line items
Land transfer tax (usually your biggest cost). Ontario charges a provincial land transfer tax on every residential purchase, calculated on a sliding scale: 0.5% on the first $55,000, 1.0% from $55,000 to $250,000, 1.5% from $250,000 to $400,000, and 2.0% above $400,000 (with a higher bracket above $2 million). If the property is inside the City of Toronto, you pay a second, municipal land transfer tax that roughly mirrors the provincial one — effectively doubling this cost. Buying in Peel, York, Durham, or Halton means you pay only the provincial tax.
Legal fees and disbursements. A real estate lawyer handles title transfer, registration, and the closing itself. Budget roughly $1,500 to $2,500 including disbursements (title search, registration fees, software charges). This is close to fixed regardless of price.
Title insurance. A one-time premium, typically $250 to $500, that protects you and your lender against title defects, fraud, and survey issues. Most lenders require it.
Home inspection. Optional but recommended, especially on resale homes — usually $400 to $700, paid before closing (in fact, before you firm up the offer).
Appraisal fee. Your lender may require an appraisal to confirm the property’s value, often $300 to $500. In many cases the lender covers or waives it, so ask.
PST on mortgage default insurance. If your down payment is under 20%, your mortgage carries default (CMHC-type) insurance. The premium itself is added to your mortgage, but Ontario’s 8% PST on that premium is due in cash at closing and cannot be rolled in. On a typical insured purchase this can be a four-figure line, so it is worth calculating early.
Property tax and utility adjustments. If the seller prepaid property taxes or utilities past your closing date, you reimburse them the prepaid portion. This is usually modest but varies with timing.
Moving, and a small cushion. Movers, a locksmith, and immediate setup costs are easy to forget — leave a few hundred dollars of margin.
Two worked GTA examples
$700,000 home in Mississauga (Peel — provincial land transfer tax only): Provincial land transfer tax works out to about $10,475. Add roughly $2,000 legal, $350 title insurance, $500 inspection, and an appraisal, and you land near $13,500 to $14,000 in closing costs — before any first time buyer rebate.
$800,000 home in Toronto (provincial + municipal land transfer tax): Provincial land transfer tax is about $12,475, and Toronto’s municipal land transfer tax adds roughly another $12,475 — about $24,950 in land transfer tax alone. With legal, title insurance, and inspection on top, total closing costs land near $28,000 before rebates. Toronto’s double tax is exactly why the city line item deserves its own row in your budget.
You can run your own numbers — including the land transfer tax on your target price and city — on our mortgage calculators page.
First time buyer rebates can claw a lot of it back
If you are a first time buyer, Ontario offers a land transfer tax rebate of up to $4,000, and the City of Toronto offers its own rebate of up to $4,475 on the municipal tax. Buying your first home in Toronto, you could recover close to $8,475 of that land transfer tax — turning the $800,000 example above from roughly $28,000 down toward $20,000 in closing costs. To qualify you generally must be 18 or older, never have owned a home anywhere, and move in within nine months. Your lawyer typically applies the rebate at closing so you pay the reduced amount rather than claiming it back later.
How to plan for it
Price your closing costs at the same time you set your down payment, not after. Take your target purchase price, calculate the land transfer tax for that specific city, add the roughly fixed items (legal, title insurance, inspection, appraisal), add the PST on default insurance if your down payment is under 20%, and subtract any first time buyer rebate you qualify for. That gives you a closing-day cash figure you can actually save toward — and it keeps your down payment and closing costs from competing for the same dollars at the worst possible moment. And before you settle on a target price, it helps to know your borrowing ceiling — our guide to how mortgage pre-approval works in Ontario walks through getting that number confirmed.
If you would like the numbers run for your exact price, city, and down payment, that is part of what a free assessment covers — no obligation, no pressure.
FAQ
How much are closing costs in Ontario?
A common planning range is 1.5% to 4% of the purchase price. Land transfer tax is the main driver, so buying inside the City of Toronto (which charges a second municipal tax) pushes you toward the top of that range, while the rest of the GTA sits lower.
Are closing costs part of my down payment?
No. Closing costs are separate one-time expenses due at closing, on top of your down payment. Lenders want to see you have both sets of funds available.
Do first time buyers pay closing costs?
Yes, but first time buyers can claim a land transfer tax rebate of up to $4,000 in Ontario and up to $4,475 in Toronto, which meaningfully reduces the largest line item.
Can I add closing costs to my mortgage?
Generally no — most closing costs must be paid in cash at closing and cannot be rolled into the loan. This is why budgeting for them early matters.
Thinking about your first purchase in the GTA?
I will map your full closing-day number — land transfer tax for your city, rebates you qualify for, and the cash you actually need — so there are no surprises on closing day.
Book a free 30-minute call · or start a free assessment
Miroshan Nithiyananthan · Licensed Mortgage Agent, Smooth Financing
FSRA Licence #M26000255 · Brokerage: Mortgage Foundations (FSRA #13614)