Buyer Closing Costs in Ontario: A Complete Breakdown, With a Real $1M Toronto Example
Beyond the down payment, GTA buyers usually need another 1.5%–4% of the price in cash on closing day
What closing costs does a home buyer pay in Ontario, on top of the down payment?
Closing costs are the cash you need on closing day beyond your down payment. In Ontario the biggest item is Land Transfer Tax — the provincial tax runs 0.5%–2.5% of the price; if the home is in Toronto you pay a nearly identical Municipal Land Transfer Tax (MLTT) on top. Add legal fees, title insurance, a home inspection, an appraisal, and — if your down payment is under 20% — the 8% Ontario PST on the CMHC premium, which must be paid in cash and cannot be added to the loan. All in, closing costs typically land at 1.5%–4% of the purchase price.
Source: Ontario Ministry of Finance (Ontario.ca) / City of Toronto (Toronto.ca) / CMHC (2026)
I’m Arthur Zhao. Nearly every first-time GTA buyer I work with hits the same shock a few days before closing: “I’ve saved my down payment — why do I suddenly need tens of thousands more?” That is closing costs. They aren’t hidden fees; they’re a string of taxes and professional charges, each with its own source — it’s just that few people add them up before writing an offer. Here I break down every line, tag the source, and run the numbers on a real $1,000,000 Toronto home so you know exactly how much cash it takes to get to the keys.
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What closing costs are — and why they aren’t your down payment
First, separate two pots of money. Your down payment is the share of the price you pay from your own funds (price minus mortgage). Closing costs are the taxes and professional fees you incur on top of that to complete the transfer. Both settle on the same day, through your lawyer, but they are entirely different things. Many buyers park all their cash in the down payment and only discover the shortfall at closing — which is exactly why I estimate closing costs with clients before we write an offer. As a rule of thumb, Ontario closing costs run 1.5% to 4% of the purchase price, driven mostly by three things: whether the home is in Toronto, whether you’re a first-time buyer, and whether your down payment reaches 20%.
The biggest line: Ontario Land Transfer Tax (LTT)
• First $55,000: 0.5%
• $55,000.01–$250,000: 1.0%
• $250,000.01–$400,000: 1.5%
• $400,000.01–$2,000,000: 2.0%
• Over $2,000,000 (one/two single-family residences): 2.5%
“Marginal” means each rate applies only to the portion of the price within that band — you don’t multiply the whole price by the top rate. Your lawyer remits this at closing, and it cannot be rolled into the mortgage.
Buying in Toronto: a second, municipal land transfer tax (MLTT)
On top of that, per the City of Toronto, effective April 1, 2026, graduated luxury brackets apply to higher-value homes with one or two single-family residences: $3M–$4M 4.4%, $4M–$5M 5.45%, $5M–$10M 6.5%, $10M–$20M 7.55%, and over $20M 8.6%. GTA municipalities outside Toronto — Mississauga, Markham, Richmond Hill — have no municipal LTT; you pay the provincial tax only.
⚠️The trap Toronto buyers fall into: counting Land Transfer Tax once. The provincial LTT and Toronto’s MLTT are two separate taxes — on a $1M home that’s about $32,950 for this line alone. Buy outside Toronto’s city limits (Mississauga, Markham) and you pay only the single provincial tax.
💡 The key figure: on a $1,000,000 Toronto resale home, the Land Transfer Tax works out to — provincial LTT = 0.5%×$55,000 + 1.0%×$195,000 + 1.5%×$150,000 + 2.0%×$600,000 = $16,475; the Toronto MLTT base brackets are identical, so another $16,475. Combined, Land Transfer Tax alone is $32,950 before any first-time buyer rebate. That single line is why closing cash in Toronto so often dwarfs what buyers expect.
First-time buyers: up to $4,000 provincial + $4,475 Toronto MLTT back
Back to the $1M home: as a first-time buyer, you subtract $4,000 + $4,475 = $8,475 from the $32,950, leaving roughly $24,475. The rebate is normally applied directly by your lawyer at closing, not claimed afterward. Eligibility rules (such as never having owned a home anywhere in the world) are set out on the government sites.
Professional fees: legal + disbursements, title insurance, inspection, appraisal
• Legal fees + disbursements: handling the transfer, title search, and registration, commonly around $1,500–$2,500 (including disbursed registration and search costs).
• Title insurance: a one-time premium, commonly around $250–$500, covering title defects, fraud, and survey issues; usually arranged by your lawyer.
• Home inspection: commonly around $400–$700; strongly recommended on resale homes.
• Appraisal: so the lender can confirm value, commonly around $300–$500, sometimes covered by the bank.
All figures are market ranges, not official pricing.
🚨With less than 20% down, the CMHC premium can be added to your mortgage — but its 8% Ontario PST must be paid in cash at closing and cannot be financed. It’s the most commonly missed line, discovered right at closing. Set the cash aside in advance.
Under 20% down: the CMHC premium can go into the loan — but the 8% PST cannot
But there’s a detail that traps Ontario buyers: the premium carries an additional 8% Ontario provincial sales tax (PST/RST), and that 8% must be paid in cash on closing day — it cannot be added to the loan. On a $22,000 premium, for example, the 8% PST is $1,760 in extra closing-day cash.
Adjustments on closing: property tax and utilities, prorated by the day
On closing day your lawyer also prepares a Statement of Adjustments, which prorates any holding costs the seller prepaid but that belong to you. The most common is property tax: if the seller has paid the full year’s tax and you take over mid-year, you reimburse the seller for the portion after closing; if the seller is behind, it’s deducted from what you pay them. Condo maintenance fees, and in some arrangements utilities or fuel oil, can be adjusted the same way. This isn’t a fixed number — it depends on the closing date and what the seller prepaid — but it is real money folded into your closing figure.
ℹ️Buying a condo? Budget for the status certificate’s cost and review time: the corporation’s fee is capped at $100 (incl. tax) and must be produced within 10 days, but online platforms often add a $30–$50 convenience fee. Don’t order it at the last minute of your condition period.
Buying a condo? Add the status certificate fee (capped at $100 incl. HST)
If you’re buying a condo, you’ll usually order a status certificate before firming up, so your lawyer can review the building’s financial and legal health. According to Ontario’s Condominium Act, 1998 (section 76) and the Condominium Authority of Ontario (condoauthorityontario.ca), a condo corporation’s fee for producing a status certificate is capped by statute at $100, including all applicable taxes, and it must be provided within 10 days of a request. One caveat: many property managers add a $30–$50 “convenience fee” through online ordering platforms, so you may pay $130–$150 in practice — but the corporation’s own statutory ceiling is $100.
New build vs resale: HST is handled completely differently
Buyers often worry about paying 13% HST on a home — but it depends entirely on new versus resale. According to the Canada Revenue Agency (Canada.ca, 2026), a resale (previously occupied) residential home is generally HST-exempt — there’s no HST inside a resale price. A newly built home carries 13% HST, usually already baked into the builder’s list price (with the New Housing Rebate already netted out).
On top of that, per the Department of Finance (Canada.ca, 2025), a new federal First-Time Home Buyers’ GST/HST Rebate eliminates the GST (the federal part of HST) for eligible first-time buyers on a newly built principal residence up to $1M (phasing out between $1M and $1.5M), worth up to about $50,000 — provided the purchase agreement with the builder is signed on or after May 27, 2025. It applies to new builds only, not resale.
Frequently Asked Questions
Roughly what percentage of the price are closing costs in Ontario?
Adding up Land Transfer Tax, legal fees, title insurance, inspection, appraisal, and any PST on a CMHC premium, Ontario closing costs typically land at 1.5%–4% of the price. They skew higher when you buy in Toronto (a second, municipal land transfer tax), aren’t a first-time buyer, or put down less than 20% (the 8% PST on CMHC insurance is cash at closing).
Why is Toronto’s land transfer tax so much higher than the surrounding cities?
Because Toronto levies a Municipal Land Transfer Tax (MLTT) on top of the provincial LTT, and the rates under $3M are identical — effectively the same tax twice. Per the City of Toronto (Toronto.ca, 2026), a $1M home is about $16,475 provincial + $16,475 MLTT ≈ $32,950. Cities outside Toronto’s limits — Mississauga, Markham, Richmond Hill — charge only the provincial tax.
How much land transfer tax can a first-time buyer get back?
Per the Ontario Ministry of Finance (Ontario.ca), eligible first-time buyers get a provincial LTT refund of up to $4,000; per the City of Toronto (Toronto.ca), buying in Toronto adds an MLTT rebate of up to $4,475. Combined, that’s up to about $8,475, normally applied by your lawyer at closing. Eligibility rules are on the government sites.
Do I pay 13% HST when I buy a home?
It depends on new versus resale. Per the Canada Revenue Agency (Canada.ca, 2026), resale homes are generally HST-exempt; new builds carry 13% HST, usually already included in the builder’s price. There’s also a federal First-Time Home Buyers’ GST rebate — eligible buyers of a new principal residence up to $1M can have the GST portion eliminated (Canada.ca, 2025) — but it applies to new builds only.
Can the CMHC premium be added to my mortgage? What about the tax on it?
The CMHC premium itself can be added to your mortgage and paid over time (per CMHC, 2026, the rate runs from about 2.80% to 4.00% by LTV). But in Ontario the premium carries an 8% provincial sales tax (PST), and that 8% must be paid in cash at closing and cannot be financed — the line buyers with under-20% down most often forget.
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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