Closing Costs in Ontario

Estimated Closing Costs for Residential Real Estate Purchase in Ontario

Deposit Typically the buyer provides a deposit to the seller’s real estate brokerage “in trust” at the time of acceptance of the offer to purchase. The deposit is held by the seller’s brokerage pending completion or termination of the purchase agreement and is credited against the purchase price on completion of the transaction. Approximate Cost: negotiated at time of offer.
Appraisal Fee Mortgage lenders will usually loan a percentage of the home’s purchase price or the market appraisal of the property, whichever is lower. The appraisal is either done by someone on the lender’s staff or by an outside professional approved by the lender. The cost of the appraisal is most often the responsibility of the home buyer. Approximate Cost: $200 to $350
Land Survey Fee/Title Insurance Lenders require a plot plan or survey of the property you intend to buy. on properties located in subdivisions in urban areas, lenders will often accept an existing survey, depending on when it was done. However, if there is no existing survey, be prepared to pay a substantial fee for a new survey. Also, ask your lawyer about title insurance. A title insurance policy can eliminate the requirement for a new survey. Title insurance is an insured statement of the condition of title or ownership of real property, at the time the policy is issued. Approximate Cost: $250 to $275 (for residential title insurance)
Home Inspection Fee It is good practice to have a home inspection done prior to finalizing your offer to purchase. Some lenders require a professional home inspection as well. Approximate Cost: $250 to $450. In the case of rural properties, it is also good practice to have a professional inspection of the septic system and a water potability report. Costs Vary.
HST If you are buying a new home, in most cases you will be required to pay the Harmonized Sales Tax on the price of your home. HST does not apply to most resale homes.
Legal Fees You will need to pay your lawyer to arrange your mortgage as well as for “disbursements” such as title search, drawing up the title deed and preparing and registering the mortgage. Approximate Cost: $700 to $1,000 plus disbursements.
Land Transfer Tax This tax is payable by anyone who purchases property in Ontario. A REALTOR or lawyer can help you calculate how much tax you will pay on your purchase.

Here is the table for calculating land transfer tax:

Current tax rates (Effective from June 1, 1989)

  • 0.5% of the value of consideration for the transfer up to and including $55,000.
  • 1% of the value of the consideration which exceeds $55,000 up to and including $250,000.
  • 1.5% of the value of the consideration exceeds $250,000.
  • 2% of the amount by which the value of the consideration exceeds $400,000 for land that contains at least one and not more than two single family residences.

 

Insurance There are several types of insurance that may be required when buying your home. If you are arranging a “high-ratio” mortgage (less than 20% down payment) you will need to purchase mortgage insurance. Mortgage lenders require you to carry fire and extended coverage insurance that exceeds the amount of the outstanding balance of the buildings. Other insurance you may want to consider include title insurance and life insurance.
Other Costs You will likely have to make property tax adjustments and interest adjustments on utility bills, heating oil etc. Ask your REALTOR to explain these additional costs so you have no surprises on closing day.
Maintenance and Utility Costs Finally, be sure to budget for heating, electricity, water and any immediate renovations you may have planned. It’s a good idea to put aside any spare cash and contribute regularly to maintenance fund so you will be prepared for any repairs or upgrades you need to make along the way.