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Title Insurance, Power of Sale & HST in Ontario: What Every Buyer Must Know
Three things that catch buyers off guard at closing ↓
Three topics come up constantly in my conversations with buyers: title insurance, power of sale properties, and HST. Most people have a vague sense of what these mean — but vague knowledge can cost you thousands at the closing table. Let me break each one down clearly so you know exactly what you’re dealing with before you sign anything.
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Title Insurance — What It Covers and Why You Need Both Policies
Title insurance protects you against title defects, hidden liens, title fraud, and survey issues — problems that can surface after you’ve already closed. Example: the previous owner had an unpaid debt registered against the property, or someone forged signatures to transfer ownership. Without title insurance, you inherit the problem. There are two types: the Owner’s Policy (roughly $200–400, one-time, lifelong coverage) and the Lender’s Policy (required by your bank). Always get both — the lender’s policy only protects the bank, not you.
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Power of Sale — The Risks Every Buyer Must Understand
A power of sale property is sold by the bank after the owner defaults on their mortgage. The key phrase to remember: “as is, where is” — no repairs, no warranties, minimal disclosure. The bank typically has no knowledge of the property’s condition and accepts zero liability. Hidden risks include second liens, unpaid property taxes, or other encumbrances attached to the title. Title insurance is especially critical here — and note that standard lender’s title insurance can sometimes be harder to obtain for these properties, requiring special arrangements.
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HST — What Applies and What Doesn’t
This trips up a lot of buyers. The short answer:
resale home purchase prices do NOT attract HST. However, HST does apply to: title insurance premiums, legal fees, real estate commissions, appraisal fees,
home inspection fees, and survey fees. New construction is different — the purchase price includes HST, partially offset by the New Home HST Rebate. And in 2026, Ontario introduced a major policy: full 13% HST exemption for new homes and condos up to $1M, valid April 1, 2026 to March 31, 2027, with a maximum rebate of $130,000.
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Practical Checklist Before You Close
Before any closing, make sure you’ve confirmed:
both owner’s and lender’s title insurance are in place; for power of sale properties, a home inspection has been completed even if the bank doesn’t require it; all
closing cost estimates include HST where applicable; and for new construction buyers in 2026, your lawyer has confirmed eligibility for the HST exemption/rebate. These details seem minor until they aren’t — and catching them early saves real money.
Arthur’s Note
The 2026 Ontario HST exemption for new homes up to $1M is one of the most significant buyer incentives in years — up to $130,000 in savings. But the window closes March 31, 2027. If you’re considering new construction or pre-construction, this is worth running the numbers on right now. Have questions about title insurance or power of sale risks? I’m happy to walk you through it.
HST: What Applies in Ontario Real Estate
Resale Home Price → No HST
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Legal/Insurance/Commission → HST Applies
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New Home Price → HST Included (Rebate Available)
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2026 Policy: Up to $130K Rebate on Homes Under $1M
AZ
Arthur Zhao
Broker · SRS · ABR · MCNE | AZ Real Estate Team
📞 416-277-3836 · arthurzhao.realtor
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