Closing Costs When Buying a Home in Ontario

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What Are Closing Costs & Why They Matter

When buying a home in Ontario, many assume that your down payment covers the bulk of your costs. But your closing costs are separate, unavoidable, and essential. These are the fees and charges that must be paid to finalize a real estate transaction, and they go beyond the purchase price. Without them, the deal simply doesn’t close.

Buyers are often surprised to learn that closing costs can range from a few thousand to tens of thousands of dollars depending on the purchase price and type of property. Having a clear understanding of what these costs are, how they're calculated, and which ones apply to your situation can help you avoid surprises on closing day.

List of Common Closing Costs

Land Transfer Tax (LTT)

Ontario charges a provincial Land Transfer Tax (LTT) on all property purchases. If you're buying a home in Toronto, you'll pay an additional Municipal LTT—effectively doubling the tax.

The LTT is calculated as a percentage of the purchase price and increases with property value. First-time homebuyers may qualify for rebates: up to $4,000 from the province and up to $4,475 from the City of Toronto. These rebates are applied at closing, reducing the amount you need to bring to the table.

To make things easier, our Legal Fee Calculator and Closing Cost Calculator estimates the exact LTT and total costs based on your purchase price and location — helping you budget accurately from the start.

Legal Fees & Disbursements

Expect to pay between $1,500 and $2,500 in legal fees for a standard residential transaction. This covers your real estate lawyer's time to review the Agreement of Purchase and Sale, conduct title searches, liaise with your mortgage lender, and register the transfer and mortgage documents.

Disbursements are extra charges your lawyer pays on your behalf and include title searches, bank fees, software charges, administrative costs and applicable HST. Some lawyers will advertise a lower legal fee with hidden disbursements that show up on the day of closing.

We prefer to provide all-inclusive quotes for predictability and transparency to our clients. It gives them the confidence to budget accurately, compare quotes fairly, and avoid unpleasant surprises when it matters most—on closing day.

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Title Insurance

Title insurance protects buyers and mortgage lenders from title defects, fraud, and survey errors that could arise after closing. Most lenders require it.

The cost typically ranges from $300 to $1,000, depending on the value and type of property. Condominiums often fall on the lower end of this scale because of simpler title history and fewer land-related risks.

Freehold properties may have more complex ownership histories, encumbrances, or easement concerns that influence the policy premium.

Title insurance is a one-time fee paid at closing that protects the owner for as long as they own the property.

Registration Fees

The Ontario Land Registry Office charges $84.23 per registration (2025). You’ll usually need two: one for the Transfer (deed) and one for the Charge (mortgage), if applicable.

These are paid electronically through your lawyer and are standardized across the province. While not large individually, they are necessary for registering ownership and encumbrances on title.

Adjustments on Closing

The standard Ontario Agreement of Purchase and Sale form includes a standard term requiring the buyer and seller to adjust for certain items:

• Property taxes
• Condo maintenance fees
• Unmetered utilities or fuel
• Mortgage interest (in cases assumed mortgages)
• Rents (in the case of tenanted properties)

The standard clause provides that these amounts "shall be apportioned and allowed to the day of completion, the day of completion itself to be apportioned to the Buyer." This means sellers are credited for any prepaid expenses and buyers are responsible for their share from the date of closing forward.

Importantly, adjustments can flow in both directions. If the seller is in arrears, the buyer receives a credit.

These adjustments are finalized in the Statement of Adjustments and can add or subtract hundreds or even thousands of dollars from the final amount due on closing.

While they aren’t exactly a “cost” in the traditional sense—since they reflect your share of prepaid expenses—they still affect how much money you need to bring to closing and should be reviewed carefully.

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Example of Closing Costs

For most resale residential transactions in Ontario, closing costs are approximately 2% of the purchase price.

This number increases to about 3.5% if the property is in Toronto due to the additional land transfer tax.

These percentages are just a reference point for quick math purposes, and will vary for each individual transaction depending on a variety of factors.

Let's look at some examples:

Tips to Keep Costs in Check

While many closing costs are fixed or set by government guidelines, legal fees remain the most variable. Here’s how to navigate them:

• Don’t just shop by lowest quote — look for value. A $300 difference may reflect the real estate lawyer’s experience, responsiveness, and attention to detail.
• Ask whether disbursements are included in the quote.
• Use tools like our Closing Cost Calculator to estimate total legal costs, including LTT, in advance.

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Summary

Closing costs in Ontario are a key part of every real estate purchase. From legal fees and land transfer taxes to title insurance and adjustments, understanding these fees helps you plan better and avoid surprises.

Budgeting 2% (3.5% for Toronto) of the purchase price is a good starting point. With the right knowledge — and the right legal team — you can navigate the process with confidence.

Work with a knowledgeable real estate lawyer who can explain the process, advocate on your behalf, and ensure your transaction closes smoothly and on time.

Contact Us

If you have questions about closing costs or any other real estate legal matter, we're here to help. As real estate law specialists, our mission is to provide the clarity and direction you need to protect your property rights.

Contact us today to schedule a free consultation.

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