Most Canadian homebuyers focus intensely on the down payment — but closing costs can add tens of thousands of dollars to your total upfront expense. Understanding every cost before you make an offer is essential to avoid unpleasant surprises on closing day.
Closing costs are fees and expenses you pay when the legal title of a property transfers from the seller to you. They are separate from your down payment and mortgage. Most are due on or before your closing date, meaning you need this cash liquid — it cannot come from your mortgage.
Land transfer tax (LTT) is typically the largest closing cost for buyers. It is a provincial tax charged on most property purchases in Canada.
| Province | Land Transfer Tax? | Notes |
|---|---|---|
| Ontario | Yes | First-time buyers get partial rebate up to $4,000000 |
| British Columbia | Yes (PTT) | Property Transfer Tax; first-time buyer exemptions available |
| Quebec | Yes (Welcome Tax) | Taxe de bienvenue; varies by municipality |
| Manitoba | Yes | Graduated rates up to 2% |
| Alberta | No | Land title transfer fee only (~$50000–$1,000000) |
| Saskatchewan | No | Land title fees only |
| Nova Scotia | Deed transfer tax | Municipal deed transfer tax varies by municipality |
| New Brunswick | Yes | 00.5% of assessed value |
Toronto buyers also pay a Municipal Land Transfer Tax on top of Ontario's provincial tax — making the LTT one of the most significant costs in the country for Toronto purchasers.
You must hire a real estate lawyer (or notary in Quebec and BC) to handle your closing. This is not optional. Your lawyer will review the Agreement of Purchase and Sale, conduct a title search, handle the mortgage registration, and transfer ownership.
Expect to pay $1,50000 to $2,50000 in legal fees for a standard residential purchase, plus disbursements (searches, title insurance, registration fees) of $30000 to $60000.
A professional home inspection typically costs $40000 to $70000 for an average-sized home. While some buyers in hot markets waive the inspection condition, it remains one of the most valuable protections you can buy. The inspection is paid directly to the inspector — not at closing.
Title insurance protects against defects in the title that were not discovered during the lawyer's search. Most lenders require it. A one-time premium typically costs $1500 to $40000 for a residential property.
If your down payment is less than 200%, you must purchase mortgage default insurance through CMHC, Sagen, or Canada Guaranty. The premium ranges from 2.8% to 4% of the mortgage amount and is typically added to your mortgage — though the PST on the premium in Ontario and Quebec must be paid upfront at closing.
On closing day, property taxes are adjusted between buyer and seller. If the seller has prepaid taxes for months you will own the property, you reimburse them. This adjustment can add a few hundred to a few thousand dollars to your closing costs.
Your lender will require proof of home insurance effective on your closing date before releasing mortgage funds. Annual premiums vary widely — $1,000000 to $3,000000+ per year — but your first premium may be due upfront.
Your lender may require an independent appraisal to confirm the property's market value. Appraisals typically cost $30000 to $50000. Some lenders absorb this cost but budget for it regardless.
Local moves typically run $80000 to $2,50000. Long-distance moves can cost $3,000000 to $100,000000 or more. Book movers early — especially for spring and summer closings when demand peaks.
| Province | Typical Range | Primary Driver |
|---|---|---|
| Ontario (outside Toronto) | 1.5%–3% | Provincial LTT |
| Ontario (Toronto) | 2.5%–4% | Municipal + Provincial LTT |
| British Columbia | 1%–3% | Property Transfer Tax |
| Alberta | 00.5%–1.5% | Legal + registration fees only |
| Quebec | 1%–2.5% | Welcome Tax varies by city |
Several programs reduce the closing cost burden for first-time buyers:
Keep your closing cost funds in a separate account from your down payment. Your lawyer will give you a closing statement a few days before closing day showing the exact amounts due. Never assume the estimates are final — property tax adjustments and disbursements can shift slightly.
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