Your down payment isn’t the only cash you’ll need to buy a home. Closing costs, the taxes, fees and expenses due on or before closing day, can add tens of thousands of dollars, especially in Toronto. Lenders also expect you to show you can cover them: a common guideline is to have at least 1.5% of the purchase price set aside on top of your down payment.
Here’s a complete checklist so nothing catches you off guard.
1. Land Transfer Tax (Usually the Biggest Cost)
Every buyer in Ontario pays the provincial land transfer tax. If the home is inside the City of Toronto, including North York, Scarborough, Etobicoke, East York and York, you also pay the Toronto municipal land transfer tax. That roughly doubles the bill.
First-time buyers can get a refund on part of the provincial tax, and Toronto offers its own first-time buyer rebate on the municipal tax. Buying outside Toronto, for example in Durham Region, means no municipal land transfer tax at all.
Land transfer tax must be paid in cash at closing. It can’t be added to your mortgage. Get your exact number with our Toronto Land Transfer Tax Calculator.
2. Legal Fees and Disbursements
You’ll need a real estate lawyer to review documents, register the property and mortgage, and handle the transfer of funds. Expect legal fees plus disbursements, such as title searches, registration fees and courier costs, typically in the range of about $1,500 to $2,500 or more, depending on the lawyer and the complexity of the deal. Ask for an all-in quote upfront.
3. Title Insurance
Most lenders require title insurance, which protects against problems like title fraud, survey errors or unpaid liens from a previous owner. It’s usually a one-time premium of a few hundred dollars, arranged through your lawyer.
4. Home Inspection
For resale freehold homes, a professional inspection, typically several hundred dollars, can uncover issues before you commit. Even in Toronto’s competitive market, it’s money well spent.
5. Status Certificate Review (Condos)
Buying a condo? Your lawyer should review the status certificate, which shows the building’s finances, reserve fund, any special assessments and lawsuits. The condo corporation charges a fee for the certificate, and your lawyer may charge to review it.
6. Appraisal
Lenders sometimes require an appraisal to confirm the home’s value. It’s often covered by the lender, but in some cases you’ll pay it yourself.
7. Tax on Mortgage Default Insurance
If your down payment is less than 20%, your mortgage needs default insurance (from CMHC, Sagen or Canada Guaranty). The insurance premium itself is added to your mortgage, but in Ontario, the 8% provincial sales tax on that premium must be paid in cash at closing. On a large mortgage this can be several thousand dollars, and many buyers miss it.
8. Property Tax and Utility Adjustments
If the seller has prepaid property taxes or utilities beyond your closing date, you’ll reimburse them on the “statement of adjustments” your lawyer prepares. For a condo, prepaid maintenance fees are adjusted the same way.
9. Home Insurance
Your lender requires proof of home insurance (or condo unit insurance) before closing. The first premium payment is often due right away.
10. New Build Extras
Buying new construction or pre-construction? Watch for additional closing charges in your agreement, such as development charges, utility connection fees, Tarion warranty enrolment, and HST adjustments. These can be significant, so have your lawyer review the purchase agreement carefully.
11. Moving and Setting Up
Not technically closing costs, but budget for movers, utility hook-ups, basic repairs, window coverings and furniture.
Your Closing Cost Checklist
- ☐ Ontario land transfer tax (and Toronto municipal tax if applicable)
- ☐ Legal fees and disbursements
- ☐ Title insurance
- ☐ Home inspection or status certificate
- ☐ Appraisal (if required)
- ☐ 8% PST on mortgage default insurance (if under 20% down)
- ☐ Property tax, utility and condo fee adjustments
- ☐ Home insurance
- ☐ New-build charges (if applicable)
- ☐ Moving and setup costs
How to Prepare
- Estimate early. Use our land transfer tax and affordability calculators before you start house hunting.
- Use first-time buyer programs. Your FHSA and RRSP Home Buyers’ Plan funds can be used toward your purchase.
- Keep the money where you can document it. Lenders want to see where your down payment and closing funds came from, usually over the previous 90 days.
- Get pre-approved. We’ll map out your full cash-to-close so there are no surprises.
Buying in Toronto, the GTA or Durham? Book a free discovery call and we’ll walk through your numbers, or call (647) 409-5155.
This article is for general information only and is not financial, tax or legal advice. Mortgage rules, rates and government programs change, so please speak with a licensed professional about your situation. Trilith Mortgages: Paul Oosh, Mortgage Agent, FSRA Licence #M25002936. Brokerage: Breezeful, FSRA Licence #13470.