Buying in Toronto? The biggest surprise for many buyers is not the list price. It is the closing costs that show up just before you get the keys. You want a clear number to budget, what is included, and how Toronto’s land transfer taxes change the math. This guide breaks it down in plain language, with examples, a simple worksheet, and trusted resources to double-check your numbers. Let’s dive in.
What to budget beyond your down payment
Closing costs in Ontario cover one-time taxes, legal work, insurance, and a few property-specific items. Outside Toronto, many buyers plan for roughly 1.5% to 3% of the purchase price. In Toronto, totals are commonly higher, often 2.5% to 6% or more, because the City adds its own land transfer tax. Your exact number depends on price, rebates, and whether you buy a condo or freehold.
What closing costs include in Ontario
Land transfer tax (LTT)
Ontario charges a one-time LTT when ownership transfers. In Toronto, you also pay a municipal LTT, calculated on the same bracket method as the provincial tax. The lawyer typically pays it on closing and collects the funds from you in advance.
Legal fees and disbursements
Your real estate lawyer prepares and reviews documents, registers the transfer and mortgage, and handles funds. Base legal fees for a standard purchase often run in the low hundreds up to about 1,000 to 1,800 dollars, with disbursements extra. Ask for an itemized quote early so you can plan.
Title insurance
Title insurance is commonly purchased through your lawyer at closing. It protects against title defects, fraud, and registration issues. Premiums are a one-time fee tied to price and are often a few hundred dollars for a typical Toronto purchase.
Adjustments and prorations
Property taxes, utilities, and condo common expenses are prorated to the closing date. These show up as credits or debits on your final statement. For condos, reserve fund or fee adjustments can be more detailed.
Mortgage-related items
- Appraisal fee if required by the lender, commonly 300 to 600 dollars.
- Interest adjustment between closing and your first payment date.
- Mortgage default insurance premium if your down payment is under 20 percent. The premium is usually added to your mortgage amount, not paid in cash at closing.
Inspections and property-specific costs
- Home inspection, typically 300 to 700 dollars depending on size and scope.
- Condo status certificate, often 100 to 200 dollars in Toronto.
- Survey or real property report if your lender requires it. Costs vary.
Registration and miscellaneous
Land registration fees are modest and usually included in your lawyer’s disbursements. Also plan for movers, utility hookups, and immediate repairs or cleaning.
Toronto-specific costs to expect
Two land transfer taxes
Toronto buyers pay both the provincial LTT and the City of Toronto LTT. The two are calculated separately using a bracketed schedule, then added together. This is why Toronto closing costs can be notably higher than elsewhere in Ontario.
- Review the provincial rules and run the official calculator on the Ontario Land Transfer Tax page.
- Review the municipal rules on the City of Toronto Land Transfer Tax page.
First-time buyer rebates
Ontario and Toronto each offer programs that can reduce LTT for eligible first-time buyers who will live in the home as their principal residence. Eligibility rules, documentation, and maximums differ. Your lawyer can help apply at or shortly after closing.
- Check provincial rebates on the Ontario Land Transfer Tax page.
- Check municipal rebates and applications on the City of Toronto Land Transfer Tax page.
Condo considerations
Condos are common in Toronto and can have extra paperwork and adjustments. Budget for the condo status certificate fee and possible adjustments for common-element fees. Ask your lawyer to review the status certificate early.
Higher purchase prices amplify LTT
Because LTT uses price brackets, higher prices increase the total tax at a faster rate. For mid-range and higher-end purchases in Toronto, the combined LTT often becomes the largest part of your closing costs.
New build vs resale
New construction can involve HST, Tarion-related documents, interim occupancy periods, and builder development charges. These differ from resale transactions. Confirm the cost items and timing with your lawyer if you are buying pre-construction.
How Toronto LTT is calculated
Both the Province of Ontario and the City of Toronto apply a bracketed, marginal-rate calculation. You apply the rate for each price bracket only to the portion of the price that falls in that bracket, then add up the results.
- Step 1: Calculate the provincial LTT using the bracketed method on the Ontario Land Transfer Tax page.
- Step 2: Calculate the City of Toronto LTT using the City of Toronto Land Transfer Tax page.
- Step 3: Add the two totals together. That combined figure is your total LTT.
Brackets can change. Always confirm with the current government pages or run the official calculators when you write your offer.
Illustrative examples: the process
Below are two planning examples. These are illustrations only. Use the official calculators to get your actual tax numbers.
Example A: $800,000 Toronto purchase (illustrative)
- Provincial LTT: calculate on the Ontario Land Transfer Tax page.
- City of Toronto LTT: calculate on the City of Toronto Land Transfer Tax page.
- Combined LTT: provincial result plus municipal result.
- Other typical items: legal fee, title insurance, appraisal, inspection, condo status certificate if applicable.
How to use this: plug in your price on both LTT calculators, add your lawyer’s quote and other items, then build your cash-to-close number with your mortgage advisor.
Example B: $1,000,000 Toronto purchase (illustrative)
- Repeat the same steps for provincial and municipal LTT using the official pages.
- Expect the combined LTT to be materially larger at this price point.
- Add your non-tax closing items to complete your budget.
Simple buyer worksheet
Use this checklist to map your closing budget. Fields marked illustrative are examples only.
Transaction basics
- Purchase price: $800,000 (illustrative)
- Deposit paid: $40,000 on offer acceptance (illustrative)
- Closing date: ____
One-time taxes and levies
- Provincial LTT: use the Ontario calculator result
- City of Toronto LTT: use the City calculator result
- HST on new home: if applicable per builder paperwork
Professional and administrative fees
- Lawyer fee: $1,400 (illustrative within typical range)
- Lawyer disbursements and land registry: estimate with your lawyer
- Title insurance: $500 (illustrative)
- Home inspection: $500 (illustrative)
- Appraisal fee: $450 if required (illustrative)
- Condo status certificate: $150 if condo (illustrative)
Illustrative subtotal for the items above, excluding LTT and disbursements: about $3,000 to $4,000.
Adjustments and prepaid items
- Property tax adjustment: to be confirmed on the closing statement
- Condo common fees adjustment: if applicable
- Utility adjustments: if applicable
- Interest adjustment on mortgage: lender will provide
Mortgage-related amounts
- Mortgage principal advanced: $____
- Mortgage default insurance: note if added to the mortgage
- Cash to close: purchase price minus deposit minus mortgage amount, plus LTT and other closing costs
Other one-time moving costs
- Movers and truck
- Immediate cleaning or repairs
- Appliances or window coverings
- Utility hookups and internet/cable deposits
To test monthly payments, try the Ratehub mortgage payment calculator to model different rates and amortizations. For mortgage insurance information, visit the CMHC site.
When and how you pay
Your lawyer will request closing funds 1 to 3 business days before closing. You bring a certified bank draft or wire transfer for the balance of your cash to close and any closing costs that must be paid in cash. Personal cheques are not typically accepted for large amounts. Your lender sends the mortgage funds directly to the lawyer on closing day.
Tips to manage closing costs
- Price out your legal fee, disbursements, and title insurance early. Ask for an itemized quote.
- Calculate provincial and City LTT as soon as you set a target price. Use the official Ontario and City calculators.
- If you are a first-time buyer, review eligibility for LTT rebates with your lawyer and prepare documents in advance.
- For condos, request and review the status certificate early so you are not surprised by adjustments.
- Keep a buffer. Budget for the high end of ranges to reduce stress on closing week.
Helpful resources
- Review the official Ontario Land Transfer Tax page for rules and the calculator.
- See the City of Toronto Land Transfer Tax page for municipal rules and rebates.
- Explore mortgage insurance and buying information on the CMHC site.
- Model payments with the Ratehub mortgage payment calculator.
Ready for numbers you can trust?
If you want a clear, step-by-step closing plan tailored to your price point and timeline, we are here to help. Our team coordinates with your lawyer and lender so you know your exact cash-to-close well before moving day. Connect with the McDougall Team to plan your Toronto purchase with confidence.
FAQs
How much should a Toronto buyer budget beyond the down payment?
- Many Toronto buyers plan for roughly 2.5% to 6% or more of the purchase price, largely due to the combined provincial and City land transfer taxes, plus legal, title, and other items.
When are closing funds due in Ontario real estate purchases?
- Funds are typically required by your lawyer 1 to 3 business days before closing by certified bank draft or wire, so they can pay the seller and taxes on closing day.
What is the difference between provincial and Toronto land transfer tax?
- Ontario charges a provincial LTT and the City of Toronto charges a separate municipal LTT using a similar bracket method; you calculate each and add them together.
Do first-time buyers in Toronto get help with land transfer tax?
- Eligible first-time buyers may apply for provincial and municipal LTT rebates, with rules and maximums set by each program and applications usually handled at or shortly after closing.
What extra closing items should Toronto condo buyers expect?
- Budget for a condo status certificate fee, potential adjustments for common-element fees or arrears, and typical professional fees like legal, title insurance, and inspection.
How do closing costs differ for new-build homes in Toronto?
- New builds can involve HST, interim occupancy fees, Tarion-related documents, and builder pass-through charges, which differ from resale transactions and should be reviewed with your lawyer.
