Closing Costs in Ontario: Every Line Item, Priced

Closing Costs in Ontario: Every Line Item, Priced

Short answer: Budget roughly 1.5% to 4% of the purchase price for closing costs in Ontario, on top of your down payment. The big line is land transfer tax: 0.5% on the first $55,000, 1% to $250,000, 1.5% to $400,000, 2% to $2 million, and 2.5% above $2 million for one- and two-family homes. Toronto buyers pay a second, municipal tax on top. First-time buyers get up to $4,000 back provincially, and up to $4,475 more inside Toronto. Add legal fees, the provincial tax on your CMHC premium if insured, and HST if the home is newly built.

Ontario closing costs have a reputation for ambushing buyers, and the ambush is almost always the same: nobody added up the whole stack at offer time. The down payment gets all the attention in our down payment guide, but the closing stack is separate cash, due on closing day, and mostly not financeable. This guide prices every line for Ontario specifically. Our national closing costs hub has the cross-Canada frame; our sibling land transfer tax explainer digs into transfer taxes country-wide.

Line 1: Ontario land transfer tax

The tax is graduated, so each rate applies only to the slice of price inside its bracket:

Slice of price	Rate
First $55,000	0.5%
$55,000 to $250,000	1.0%
$250,000 to $400,000	1.5%
$400,000 to $2,000,000	2.0%
Above $2,000,000 (one or two single-family residences)	2.5%

Worked examples (provincial tax only):

• $600,000: $275 + $1,950 + $2,250 + $4,000 = $8,475.
• $900,000: $275 + $1,950 + $2,250 + $10,000 = $14,475.

The tax is calculated on the purchase price, not your mortgage, and it is due at registration. It cannot be added to your mortgage. Your lawyer collects it with the closing funds.

Line 2: The Toronto second tax

The City of Toronto is the only Ontario municipality with its own land transfer tax, and its brackets broadly mirror the provincial ones, so a Toronto purchase roughly doubles the line: about $16,950 of combined tax on a $600,000 Toronto home before rebates. Etobicoke, North York, and Scarborough are inside Toronto for this purpose. Mississauga, Markham, Ottawa, and everywhere else in Ontario pay the provincial tax only. Budget accordingly if your search straddles the city boundary; two similar homes on either side of it can differ by five figures of cash to close.

Line 3: The first-time buyer refunds

Eligible first-time buyers (at least 18, Canadian citizen or permanent resident, never owned a home anywhere in the world, occupying as a principal residence within nine months; a spouse's prior ownership while you were spouses also disqualifies) can claim:

• Ontario refund: up to $4,000. That fully covers the provincial tax on a purchase of $368,000. On our $600,000 example it cuts the provincial bill from $8,475 to $4,475.
• Toronto rebate: up to $4,475 on the municipal tax, with its own eligibility rules (similar first-time and occupancy tests).

Combined maximum relief inside Toronto is $8,475. Most buyers claim at closing through their lawyer so the refund reduces the cash they must bring; claims can also be filed afterward within the window the Ministry allows. One caution buyers miss: lenders still want to see you have roughly 1.5% of the price available for closing costs regardless of the expected refund.

Line 4: Provincial tax on the CMHC premium

If you put less than 20% down, your mortgage carries a default insurance premium (0.60% to 4.00% of the loan by loan-to-value; see our premium guide). The premium itself is usually added to the mortgage. Ontario, however, charges 8% provincial sales tax on that premium, and the tax cannot be financed; it is cash at closing. On a $600,000 purchase with 10% down, the premium at the 3.10% band is about $16,740 on a $540,000 loan, and the Ontario tax on it is roughly $1,340. Small next to the land transfer tax, invisible until it is not: this line is the one first-time buyers most often discover from their lawyer's statement of adjustments.

Line 5: HST on new construction

Resale homes are generally exempt from HST; newly built homes are not. A new build in Ontario carries 13% HST on the purchase price, softened by two rebates: the federal GST/HST New Housing Rebate and Ontario's New Housing Rebate for the provincial portion, both price-sensitive and phased out at higher prices, and, for first-time buyers, the new First-Time Home Buyers' GST/HST rebate that can return up to 100% of the federal portion to a maximum of $50,000 on homes up to $1 million, phasing out by $1.5 million (our GST rebate guide has the full formula and the traps). Assignment sales and substantially renovated homes have their own wrinkles. New-build buyers should model the tax and the rebates together before comparing a new build to a resale home on sticker price alone.

Lines 6 to 10: The professional and administrative stack

• Legal fees and disbursements: your lawyer's fee plus registration, title search, and courier costs. Quote-dependent; get the all-in figure in writing.
• Title insurance: commonly purchased at closing to cover title defects and certain off-title risks; a one-time premium scaled to the property.
• Appraisal: your lender may order one; the buyer typically pays.
• Home inspection: optional on resale, strongly recommended, paid before or at condition removal rather than closing.
• Status certificate (condos): the condominium corporation's disclosure package; budget for it on any condo purchase.
• Adjustments: property tax, utilities, and (for condos) common expenses are apportioned between buyer and seller to the closing date. Depending on timing, this line can add or return cash.
• Development levies (new builds): many builder agreements pass municipal development charges and utility connection fees to the buyer at closing. Read the agreement's closing-cost schedule before signing; on new construction this can be the second-largest line after the tax itself.

The full stack at two price points

$600,000 resale in Ontario (outside Toronto), 10% down, first-time buyer: down payment $60,000 (separate); land transfer tax $8,475 less $4,000 refund = $4,475; tax on CMHC premium about $1,340; legal and disbursements, appraisal, title insurance, inspection, and adjustments on top. Cash to close beyond the down payment: plan for roughly $8,000 to $11,000 depending on quotes and timing.

$900,000 resale inside Toronto, 20% down, not a first-time buyer: provincial tax $14,475 plus a broadly similar municipal tax, so about $29,000 of transfer taxes; no CMHC premium and no tax on it (20% down); professional stack on top. Cash to close beyond the $180,000 down payment: roughly $33,000 to $37,000.

The pattern to remember: Toronto doubles the tax line, new construction adds HST net of rebates, insured purchases add the premium tax, and first-time status subtracts up to $8,475. Every Ontario budget is some combination of those four switches.

Ontario closing discipline

1. Calculate the land transfer tax with the bracket table, not a flat percentage.
2. If buying in Toronto, double the tax line and check both rebates separately.
3. If insured, add 8% of the CMHC premium as closing cash.
4. If new construction, model HST and all three rebates (federal new housing, Ontario new housing, first-time buyer GST rebate) before comparing to resale.
5. Keep the closing reserve in a separate account from the down payment. Money that does double duty has a way of being spent twice.

Citations: Ontario Ministry of Finance, land transfer tax rates and first-time homebuyer refund (ontario.ca); City of Toronto, Municipal Land Transfer Tax and first-time buyer rebate (toronto.ca); CMHC premium schedule and provincial tax treatment of premiums (cmhc-schl.gc.ca). Legal and service fees vary by provider; obtain written quotes.