In Ontario, closing costs when buying a house typically range between 3-5% of the purchase price. These costs include a variety of fees and taxes that need to be paid upon finalizing the home purchase. Below are some of the key closing costs in Ontario:

1. Land Transfer Tax (LTT)

• Cost: Varies based on property value.

• In Ontario, you must pay Land Transfer Tax when you purchase property. First-time homebuyers can receive a rebate of up to $4,000.

• LTT Calculation:

  • 0.5% on the first $55,000

  • 1.0% on the next $195,000

  • 1.5% on the next $150,000

  • 2.0% on the remaining amount above $400,000

If you're purchasing in Toronto, there's an additional Municipal Land Transfer Tax which follows the same structure as the provincial LTT.

2. Legal Fees

• Cost: Around $1,500 to $3,000.

• A real estate lawyer is required to handle the paperwork, including title searches and mortgage registration.

3. Title Insurance

• Cost: Typically between $250 and $500.

• This insurance protects you against title fraud or issues related to the ownership of the property.

4. Home Inspection Fee

• Cost: Around $300 to $600.

• While optional, a home inspection is recommended to identify potential issues with the property.

5. Property Tax Adjustment

• If the seller has pre-paid property taxes, you’ll need to reimburse them for the portion of the year that you’ll own the home.

6. Mortgage Default Insurance (if applicable)

• Cost: If your down payment is less than 20%, you’ll need to purchase mortgage default insurance (CMHC insurance). This cost can be rolled into your mortgage but is technically part of closing costs.

• The premium ranges from 2.8% to 4.0% of the mortgage amount.

7. Other Potential Costs

• Moving costs

• Utility setup costs

• Property appraisal fee (if required by the lender)

• Status certificate fee (if buying a condo, usually $100)

Overall, you should budget about 3-5% of the home's purchase price for closing costs.

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