Ontario Home Buying Costs: Every Dollar Beyond the Purchase Price

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TL;DR

On a $1,000,000 Ontario home purchase outside Toronto, expect to budget $16,000–$22,000 in closing costs on top of your down payment. Inside the City of Toronto, add another ~$12,000–$16,000 for the municipal land transfer tax. These costs must be in cash — they cannot be rolled into your mortgage.

Ontario’s land transfer tax (LTT) is calculated on a sliding scale based on the purchase price. It applies to every property purchase in the province — resale homes, condos, new builds, and rural properties alike.

Ontario LTT on a $1,000,000 purchase:
— 0.5% on the first $55,000 = $275
— 1.0% on $55,001–$250,000 = $1,950
— 1.5% on $250,001–$400,000 = $2,250
— 2.0% on $400,001–$2,000,000 = $12,000
Total Ontario LTT: ~$16,475

Toronto Municipal LTT (City of Toronto only):
If your property is within Toronto’s city limits — not Mississauga, Markham, Richmond Hill, Vaughan, Brampton, or Ajax — you also pay a second, parallel municipal LTT at approximately the same rate. On a $1M purchase: another ~$16,475.

First-Time Buyer Rebates:
Ontario offers a rebate of up to $4,000 on the provincial LTT. The City of Toronto offers up to $4,475 on the municipal LTT. To qualify, you must be at least 18 years old, a Canadian citizen or permanent resident, and have never owned a residential property anywhere in the world.

Net after rebates (first-time buyer, outside Toronto): ~$12,475
Net after rebates (first-time buyer, Toronto): ~$24,475

If your down payment is less than 20% of the purchase price, federal law requires you to purchase mortgage default insurance through CMHC, Sagen, or Canada Guaranty. This premium is calculated on the insured loan amount and added to your mortgage balance — it is not paid upfront in cash at closing.

Premium rates (as of 2025):
— 5%–9.99% down: 4.00% of loan
— 10%–14.99% down: 3.10% of loan
— 15%–19.99% down: 2.80% of loan

Example: You put 10% ($80,000) down on an $800,000 home. Your insured loan is $720,000 × 3.10% = $22,320 insurance premium added to your mortgage. You now owe $742,320 on your mortgage, but no cash is required at closing for this amount.

Important 2025 rule change: Since December 15, 2024, Canada raised the insured-mortgage price cap from $1,000,000 to $1,500,000, so homes under $1.5M can be insured with less than 20% down (minimum 5% on the first $500,000 plus 10% on the $500,000–$1.5M portion; $1.5M and over still requires 20%). For homes between $1M and $1.5M, the rules were recently updated to allow insured mortgages with a minimum 10% down on the portion between $500,000 and $1.5M — confirm with your mortgage broker for the current specifics.

Also note: HST (13%) applies to the insurance premium. If rolled into the mortgage, the HST portion ($2,902 on the example above) must be paid in cash at closing.

Legal Fees: $1,200–$2,000
Your real estate lawyer handles the title search, registration, trust accounting, and document preparation. Disbursements (search fees, registration costs, couriers) are typically $400–$700 on top of the base fee. Total all-in: usually $1,500–$2,200. This is not the place to cut corners — a mistake on a $1M+ transaction costs far more than the difference between a $900 and a $1,500 lawyer.

Title Insurance: $200–$400
A one-time premium covering the lender’s policy and an owner’s policy. Protects against title fraud, encroachments, survey errors, and certain zoning compliance issues. Your lawyer will arrange this; lenders require it.

Home Inspection: $400–$600
A licensed home inspector examines the structural, mechanical, and electrical systems of the property during the condition period. In competitive markets, some buyers waive inspections — but this should always be a strategic decision made with full awareness of the risk, not a default choice.

Home Insurance: $150–$300/month (first year ~$1,800–$3,600)
Required by your mortgage lender before funds are released on closing day. Shop for quotes from multiple insurers 2–3 weeks before your closing date. New homes and renovated properties often qualify for lower rates.

Property Tax Adjustment: $500–$4,000
On closing day, your lawyer calculates the pro-rated adjustment between you and the seller for the current year’s property taxes. The exact amount depends on the closing date and whether taxes have been paid ahead or are in arrears.

Arthur’s Budgeting Rule

Closing costs are just the entry fee. First-time buyers moving from a rental into ownership typically face a significant wave of spending in year one:

Moving costs: $800–$3,000+
Local GTA moves for a 2–3 bedroom home typically run $1,200–$2,500 for a licensed, insured moving company. Book 4–6 weeks in advance for spring and summer closings when movers are fully booked.

Furniture and appliances: $3,000–$20,000+
Renters who didn’t own appliances, window coverings, or furniture for larger spaces will face real costs furnishing a home. Budget conservatively and prioritize functional needs over aesthetics in year one.

Immediate repairs and updates: $0–$10,000+
Even well-inspected homes have immediate to-do lists: lock changes ($200–$400), caulking and weatherproofing, minor drywall work, fresh paint. Keep $2,000–$4,000 accessible as a repair reserve.

Condo maintenance fees (if applicable): $400–$1,200+/month
If you’re buying a condo, the monthly maintenance fee is a fixed obligation alongside your mortgage payment. It covers building insurance, common area maintenance, and reserve fund contributions. Factor this into your total monthly housing cost calculation before making your purchase decision.

$1M Purchase: Quick Cost Summary (Outside Toronto, First-Time Buyer)

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