Your down payment is not the only cash you need on closing day. Ontario buyers pay a cluster of closing costs on top of it, all in cash, none financeable through the mortgage. Here is each category and how it works. We do not publish invented “average” dollar figures — your lawyer quotes the real ones for your deal.
Land transfer tax
The largest closing cost for most Ontario buyers. It is calculated on a published tiered formula: 0.5% on the first $55,000 of the price, 1% to $250,000, 1.5% to $400,000, 2% to $2,000,000, and 2.5% above that for single-family homes. Qualifying first-time buyers can claim a refund of up to $4,000, usually applied automatically at registration. Buyers in Kitchener, Waterloo, Cambridge, and Guelph pay the provincial tax only — Toronto’s municipal land transfer tax does not apply here. Full brackets and a worked example are in our land transfer tax guide.
Legal fees and disbursements
You need a real estate lawyer to close a purchase in Ontario. Their bill has two parts. The fee is what the lawyer charges for the work: reviewing the agreement, searching title, preparing documents, registering the deed and mortgage, and moving the money. Disbursements are the out-of-pocket costs the lawyer incurs on your file — title search charges, registration fees, software and courier charges. Ask for a quote that itemizes both, plus HST, so there are no surprises in the final statement of account.
Title insurance
A one-time premium paid at closing that protects against title defects, survey issues, certain kinds of fraud, and problems that a records search cannot catch. There are two policies: a lender policy, which most mortgage lenders require, and an owner policy, which protects your equity. Both are usually purchased together through your lawyer, and the premium scales with the property value. It replaces the older practice of commissioning an up-to-date survey in most transactions.
Statement of adjustments
Closing day rarely lands exactly on a billing cycle. The statement of adjustments reconciles costs the seller has prepaid past the closing date — property taxes, fuel in an oil tank, and for condos, the month’s common expenses. You credit the seller back for your share. On new construction, adjustments can also include development-charge and utility-connection amounts capped or listed in the builder agreement, which is one more reason a lawyer reviews that agreement before you sign.
Inspection and condition costs
Costs you choose to incur before the deal goes firm. A home inspection is the common one. Depending on the property, you might also pay for a well or septic inspection, a WETT inspection on a wood stove, or a sewer-line camera scope on an older home. On a condo purchase, your lawyer reviews the status certificate — the corporation can charge at most $100 for it under the Condominium Act. These are paid when ordered, not at closing, but they belong in the same budget.
Costs that ride along
Three more items commonly show up in the first week of ownership rather than on the lawyer’s statement: mortgage default insurance PST (if your down payment is under 20%, the premium is added to the mortgage, but Ontario’s provincial sales tax on that premium is due in cash at closing), moving costs, and immediate utility hookups and locks. None are legally “closing costs,” but your bank balance will not know the difference.
How to budget without fake numbers
Run the land transfer tax formula on your target price — that number is exact. Then get a written legal-fee quote from a lawyer before you offer, and ask your lender to confirm the PST on any default-insurance premium. Those three items, plus a title insurance quote, give you a real closing-cost figure built from your deal instead of someone’s invented average.
Selling before you buy? Know what you are working with first at /home-value/. Estimates are ranges. A licensed District agent delivers the real number within 24 hours.