According to CMHC (2026), closing costs typically add 3% to 4% on top of your purchase price — money you need in cash on closing day, separate from your down payment. Most buyers underestimate this amount and scramble at the last minute. Here’s every cost, clearly explained, so you can budget properly before making an offer.
💸 6 Major Cost Categories
1
Land Transfer Tax (LTT)
Doubled in Toronto — the biggest single cost
Ontario charges tiered LTT on every property purchase: 0.5% on first $55K, 1% to $250K, 1.5% to $400K, 2% to $2M, 2.5% above. Toronto adds a matching municipal LTT, roughly doubling the cost. On an $800K Toronto purchase: ~$22,950 combined. First-time buyers get rebates of up to $8,475. Outside Toronto: only the provincial LTT applies.
2
Legal Fees
$2,000–$3,500 all-in
Every Ontario real estate transaction requires a real estate lawyer. They handle title searches, document preparation, Teraview registration, and fund coordination on closing day. Base fee: $1,500–$2,500 + 13% HST + disbursements (title searches, registration fees, etc.) = $2,000–$3,500 total. Don’t choose a lawyer on price alone — closing day errors are costly.
A registered home inspector (look for OAHI membership) examines the structure, roof, foundation, electrical, plumbing, and HVAC systems over 2–3 hours. Cost: $400–$600 for a detached house. Skipping this to win a bidding war is one of the most common costly mistakes. In 2026’s buyer’s market, you usually have time to inspect.
4
Title Insurance
One-time, $300–$500
Title insurance protects you against title defects, unpaid liens, survey errors, and fraud. One-time cost: $300–$500, typically required by your lender. Even if not required, it’s worth buying. It stays in force as long as you own the property. Your lawyer will arrange this as part of the closing process.
5
CMHC Mortgage Insurance
Required when down payment < 20%
Federal regulations require mortgage default insurance if your down payment is less than 20%. Premiums: 5%–9.99% down = 4% premium; 10%–14.99% = 3.1%; 15%–19.99% = 2.8%. The premium is added to your mortgage principal (not due on closing day as cash), but it increases your monthly payment. Max insured purchase price: $1.5M (2026).
6
Other Costs (Often Forgotten)
Budget $2,000–$4,000 extra
Moving costs ($1,000–$3,000), home insurance (required before closing), property tax adjustment, utility connection fees, and lock replacement ($200–$400). Also factor in ongoing property taxes — Ontario average is 0.7%–1.2% of assessed value annually. On $800K that’s $5,600–$9,600/year.
💡 Arthur’s Budget Rule
For an $800,000 Toronto purchase (non-first-time buyer): LTT ~$22,950 + legal ~$2,500 + inspection ~$500 + title insurance ~$450 + moving ~$1,500 = approximately $28,000. First-time buyers subtract the $8,475 LTT rebate. Always budget at least 3.5%–4% of purchase price for closing costs — separate from your down payment.
$800K Toronto Purchase — Cost Summary ↓
+
Toronto Municipal LTT ≈ $11,475
+
Legal + Inspection + Insurance ≈ $3,500
+
Moving + Other ≈ $2,500 → Total ~$28,950
❓ FAQ
Q: Do buyers in Mississauga or Markham pay double land transfer tax?
No. Toronto is the only Ontario municipality that levies a municipal land transfer tax. Buyers in Mississauga, Markham, Vaughan, and other GTA cities outside Toronto pay only the provincial LTT — roughly half the Toronto amount.
Q: Are there any other fees for condo purchases?
Yes. Your lawyer will charge an additional fee (~$100) to review the Status Certificate. There may also be condo fee adjustments if the seller pre-paid fees for the remainder of the month. For pre-construction condos, expect development charges, education levies, and potential upgrade costs.
AZ
Arthur Zhao
Broker · FRI · ABR · SRS · MCNE · E-PRO | AZ Real Estate Partners
📞 416-888-6161 ｜ arthurzhao.realtor
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