Closing Costs Canada — First-Time Buyer Guide

Closing costs catch many first-time buyers off guard. Budget 1.5%–4% of your purchase price on top of your down payment. Here's every cost itemized.

The Full Closing Cost Breakdown

Cost Item	Typical Range	Notes
Land Transfer Tax (Ontario)	$4,000–$16,000+	First-time buyers get up to $4,000 rebate
Toronto Municipal LTT	$4,000–$14,000+	Toronto only; FTHB rebate up to $4,475
Legal Fees + Disbursements	$1,500–$2,500	Covers title search, closing documents, registration
Title Insurance	$300–$500	One-time premium; protects against title defects
Home Inspection	$400–$600	Strongly recommended for all resale properties
CMHC Insurance PST/QST	$800–$2,000+	Ontario 8%, Quebec 9.975% on CMHC premium
Property Tax Adjustment	$500–$3,000	Prepaid tax owed to seller based on closing date
Utility/Condo Fee Adjustment	$100–$500	Pro-rated to closing date
Home Insurance (first year)	$1,200–$2,400	Required by lender before closing
Moving Costs	$1,000–$5,000	Local vs. long-distance; DIY vs. professional
Immediate Repairs/Updates	$0–$20,000+	Budget based on inspection findings

Total Closing Cost Estimates by Purchase Price

Purchase Price	Province	Estimated Closing Costs
$500,000	Ontario (outside Toronto), FTHB	$8,000–$14,000
$500,000	Toronto, FTHB	$100–$18,000
$700,000	BC (Vancouver), FTHB	$12,000–$20,000
$600,000	Alberta, FTHB	$6,000–$12,000
$650,000	Quebec (Montreal), FTHB	$15,000–$25,000

Land Transfer Tax — The Biggest Variable

Land transfer tax is the single largest closing cost in most provinces. In Ontario, LTT on a $700,000 purchase is $10,475 provincial (before the $4,000 FTHB rebate) plus $10,475 municipal (before the $4,475 rebate) if in Toronto. That's $21,000 gross, reduced to $12,500 after both rebates. In Alberta and Saskatchewan, there is no provincial LTT — a significant cost advantage.

Legal Fees — What's Included

Your real estate lawyer handles the legal aspects of your purchase: conducting a title search to confirm clear ownership, reviewing your mortgage documents, reviewing the APS, conducting the closing, registering the title and mortgage, and disbursing funds. Most Ontario lawyers charge $1,200–$1,800 in professional fees, plus disbursements (registration fees, title search costs, couriers) of $500–$700. Always get a written fee estimate before engaging a lawyer.

Title Insurance — Strongly Recommended

Title insurance is a one-time premium ($300–$500) that protects you against losses from title defects, survey issues, encroachments, or fraud that existed before you purchased. Most lenders require it. Your lawyer arranges it as part of the closing process. Given the relatively small cost versus the protection provided, title insurance is almost always worth purchasing even when not strictly required.

Property Tax Adjustment

Property taxes are typically paid in advance by the seller. At closing, if the seller has paid property taxes beyond your closing date, you reimburse them for the pro-rated amount. If taxes are in arrears, the seller credits you. This adjustment appears on your Statement of Adjustments prepared by your lawyer and can range from a few hundred to a few thousand dollars depending on timing.

Saving for Closing Costs — Practical Tips

Save for closing costs separately from your down payment so you have clarity on both amounts. A reasonable rule of thumb for Ontario buyers is to budget 3%–4% of the purchase price in addition to your down payment. For Alberta buyers, 1.5%–2% is more realistic given the absence of LTT. Keep closing cost funds in a liquid, accessible account — not locked-in investments — as they are needed quickly after your offer is accepted.