Closing Costs in Ontario: What Buyers Pay Beyond the Price (2026)
Land transfer tax, legal fees, title insurance, adjustments — a buyer’s checklist
How much should an Ontario buyer budget for closing costs?
A common rule of thumb is 1.5%–4% of the purchase price. According to Homewise (2026), these one-time costs include land transfer tax, legal fees, title insurance, inspection, appraisal and closing adjustments. The largest piece is land transfer tax — and inside the City of Toronto you pay it twice, because a municipal land transfer tax (MLTT) layers on top of the provincial one.
Sources: Ontario Ministry of Finance (ontario.ca); City of Toronto (MLTT); Homewise 2026 Closing Costs Guide.
Many first-time buyers pour every dollar into the down payment, then discover during closing week that a stack of closing costs is still due — in cash, on top of the price. These costs can’t be financed and must be ready, or the deal stalls. Here is a line-by-line breakdown of what an Ontario buyer pays at closing, with a worked $1,000,000 example.
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The biggest line: Land Transfer Tax (LTT)
ℹ️To tell whether Toronto MLTT applies, check whether the postal code starts with “M” (inside the City of Toronto). The 905 region (Markham, Richmond Hill, Mississauga, etc.) pays provincial LTT only.
First-time buyers get part of the LTT back
Legal fees, title insurance and third-party costs
Less than 20% down? Add a PST
Adjustments and HST
⚠️Adjustment amounts depend on the closing date and the actual tax bill — there is no standard figure. Don’t estimate from an online “average”; rely on the actual numbers on your lawyer’s statement of adjustments.
💡 Closing costs are a cash, non-financeable expense. When you budget your down payment, set aside an extra 1.5%–4% of the price in cash — and budget toward the high end inside Toronto because of the double land transfer tax.
A worked example: a $1,000,000 home
Using the verified provincial tiers, Ontario LTT on $1,000,000 = 0.5%×$55,000 + 1.0%×$195,000 + 1.5%×$150,000 + 2.0%×$600,000 = $16,475. In the 905 (provincial LTT only), adding legal fees, title insurance, inspection and appraisal, total closing costs run roughly $18,600–$20,500. Inside Toronto, add another $16,475 of MLTT for a total of roughly $35,100–$37,000 (sources: Ontario.ca tiers + Homewise/WOWA ranges).
Frequently Asked Questions
What percentage of the price are Ontario closing costs?
According to Homewise (2026), the rule of thumb is 1.5%–4% of the purchase price. Ontario — especially Toronto — usually lands at the higher end because of the double land transfer tax.
How do closing costs differ between Toronto and the 905?
Mostly in land transfer tax. Inside the City of Toronto (postal code “M”) you pay both provincial LTT and municipal MLTT — twice; the 905 pays provincial LTT only. On a $1,000,000 home, Toronto costs roughly $16,475 more.
How much LTT can a first-time buyer recover?
According to Ontario.ca and the City of Toronto/Ratehub (2026), up to $4,000 provincially and up to $4,475 municipally in Toronto — a qualifying Toronto first-time buyer can save up to about $8,475.
Can closing costs be added to the mortgage?
Generally no. Land transfer tax, legal fees and adjustments are due in cash at closing. CMHC insurance premiums can be financed, but the 8% Ontario PST on them must be paid in cash (Ratehub.ca).
Arthur Zhao
Real Estate Broker · FRI · ABR · SRS · PSA · MCNE · E-PRO · CLHMS & GUILD Elite · REAIS
VP & Branch Manager, Bay Street Group Inc.
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