Newcomers Guide · Ontario

Mortgage pre-approval is the essential first step — not something to handle after you fall in love with a property. Pre-approval confirms your borrowing limit, locks in an interest rate for 90–120 days, and signals to sellers that you’re a serious buyer. For newcomers, this process typically requires two years of income documentation (Notice of Assessment from CRA), proof of employment, bank statements showing your down payment funds, and a Canadian credit check. If you don’t yet have two years of Canadian income history, some lenders have newcomer programs that accept overseas income documentation — but options narrow quickly, so starting early gives you more choices.

Many newcomers assume they’ll have to pay their real estate agent out of pocket. In most Ontario transactions, the buyer’s agent commission is paid by the seller from the sale proceeds — so the buyer receives expert representation at no direct cost. Since 2024, however, Ontario requires that buyers sign a Buyer Representation Agreement (BRA) that explicitly states how the buyer’s agent will be compensated. This transparency is good for buyers: you’ll know upfront if there’s any gap between what the seller offers and what the BRA specifies. Before you sign, ask your agent to walk you through the BRA clearly. It’s a standard document, but the terms matter.

Every offer (formally called an Agreement of Purchase and Sale) in Ontario contains an Irrevocable Date and Time — a deadline by which the seller must accept, reject, or counter the offer. Until that deadline, the buyer cannot withdraw. After the deadline, the offer expires automatically — it is not considered accepted by silence. In the GTA, offer deadlines are often 24–48 hours, and in hot markets, sellers hold a set “offer night” where multiple buyers compete. You need to have your documents, your deposit (typically a certified cheque or bank draft), and your decisions ready in advance. There’s rarely time to deliberate once offers are submitted.

An offer “condition” is a clause that lets you exit the deal — with your deposit returned — if a specific requirement isn’t met. The three most common conditions are: Financing Condition (your mortgage comes through), Home Inspection Condition (the property passes inspection), and Status Certificate Condition (for condos — reviewing the condo corporation’s financials). In a competitive market, buyers sometimes waive conditions to make their offer more attractive. This can be a legitimate strategy, but it carries real financial risk. If your financing falls through after waiving the financing condition, you may lose your deposit — which can be $20,000 to $50,000 or more. Discuss each condition carefully with your agent before deciding.

Ontario does not legally require a home inspection before purchase, but for any resale property it’s highly advisable. A licensed home inspector (fee typically $400–$700) will assess the roof, foundation, HVAC, electrical, plumbing, and more. Resale homes in Ontario are sold “as-is” — meaning the seller is not required to fix anything unless it’s specifically agreed in the contract. Discovering a $30,000 furnace or a leaking roof after closing is a shock that a $500 inspection might have prevented. If you’re buying a new build, Tarion Warranty provides some coverage — but it’s not a substitute for due diligence on a resale home.

6. Your Lawyer Comes In About a Week Before Closing
Many newcomers are surprised to learn that the real estate lawyer doesn’t get involved at the time of signing the offer — they come in roughly 7–10 business days before the closing date to handle title transfer, review mortgage documents, and issue closing funds. That said, you should find and retain a real estate lawyer early, preferably before you start making offers. Legal fees typically run $1,500–$3,000, plus disbursements such as title insurance, land registration fees, and other adjustments. Your lawyer will also prepare a Closing Statement detailing all credits and debits at closing.

7. Property Tax Is Prorated at Closing
Ontario property tax is billed annually by the municipality, but payment often doesn’t align perfectly with your closing date. At closing, your lawyer will calculate a tax adjustment: if the seller has prepaid property tax beyond the closing date, you’ll reimburse them for the unused portion. If they’re behind, they’ll credit you. This adjustment is itemized in your Closing Statement and is usually a few hundred to a few thousand dollars — worth budgeting for.

8. Land Transfer Tax: The Closing Cost Many Newcomers Miss
Ontario’s Land Transfer Tax (LTT) is one of the largest closing costs buyers pay, and it often catches newcomers off guard because it doesn’t show up in the listing price or the mortgage estimate. The provincial LTT rates are tiered: 0.5% on the first $55,000; 1.0% on $55,001–$250,000; 1.5% on $250,001–$400,000; 2.0% on $400,001–$2,000,000; and 2.5% above $2 million. On an $800,000 home, the Ontario LTT is approximately $12,950. If you’re buying within the City of Toronto, you’ll also pay a matching Municipal Land Transfer Tax (MLTT). First-time buyers can claim rebates: up to $4,000 (provincial) and up to $4,475 (Toronto municipal).

9. Use the FHSA and RRSP Home Buyers’ Plan
Two powerful tax-sheltered tools are available specifically for first-time homebuyers in Canada. The First Home Savings Account (FHSA), introduced in 2023, lets you contribute up to $8,000 per year (lifetime maximum $40,000). Contributions are tax-deductible, and qualifying withdrawals for home purchase are tax-free. Open one as soon as you become a Canadian tax resident — even if you’re not ready to buy yet. The RRSP Home Buyers’ Plan (HBP) allows first-time buyers to withdraw up to $35,000 from their RRSP ($70,000 for couples) for a home purchase, repaid over 15 years with no immediate tax consequence. Used together, these plans can meaningfully reduce both your tax bill and your path to a down payment.

10. Newcomer Mortgage Rules: Plan for 30% Down
If you’ve been in Canada for less than two years and/or don’t have a Canadian credit history, most major banks will classify you as a non-traditional borrower. The standard requirement is a minimum 30% down payment for homes under $1 million (higher for more expensive properties). Some lenders — particularly those with dedicated newcomer programs — may accept as little as 20% with strong international income documentation, overseas credit references, or a letter from a major bank. Working with a mortgage broker (rather than going directly to one bank) gives you access to multiple lenders and programs simultaneously, improving your odds of finding the best rate and terms.

How much down payment does a newcomer need to buy a home in Ontario?

Newcomers without an established Canadian credit history or two years of Canadian income typically need a minimum 30% down payment. Some lenders offer newcomer mortgage programs that may accept 20–25% with additional documentation such as overseas income letters or international credit references. Speaking with a mortgage broker who specializes in newcomer clients is strongly recommended before you start shopping.

What is the Land Transfer Tax in Ontario and how much will I pay?

Ontario’s Land Transfer Tax is charged on a tiered basis: 0.5% on the first $55,000; 1.0% on $55,001–$250,000; 1.5% on $250,001–$400,000; 2.0% on $400,001–$2,000,000; and 2.5% above $2 million. On an $800,000 home in Toronto, the provincial LTT is approximately $12,950 — plus an equal Municipal LTT. First-time buyers can claim rebates of up to $4,000 (provincial) and $4,475 (Toronto).

What is the FHSA and can newcomers use it?

The First Home Savings Account (FHSA), introduced in 2023, lets you contribute up to $8,000 per year (lifetime maximum $40,000). Contributions are tax-deductible, and qualifying withdrawals for a home purchase are completely tax-free. Any Canadian tax resident who hasn’t owned a principal residence in the past four years is eligible — including most newcomers. Open one early, even before you’re ready to buy.

Do I need a home inspection when buying a house in Ontario?

Home inspections are not legally required in Ontario, but they are strongly recommended for any resale property. A professional inspection costs $400–$700 and can uncover structural, roof, HVAC, or electrical issues that could cost tens of thousands after closing. In competitive markets, some buyers waive the inspection condition to strengthen their offer — this carries real risk and should only be considered after careful discussion with your agent.