One of the most common surprises for first-time buyers is the total cost of closing a real estate transaction. Beyond your down payment, you’ll need cash on hand for a collection of fees, taxes, and adjustments. Here’s exactly what to budget for on a typical GTA purchase.
Land Transfer Tax (Ontario)
Progressive tax on all Ontario real estate purchases. On a $900,000 home: approximately $14,475. First-time buyers get a rebate of up to $4,000, reducing the net cost to ~$10,475.
Toronto Municipal Land Transfer Tax
City of Toronto buyers pay an additional municipal LTT on top of the provincial tax. On the same $900K home: ~$13,975. First-time buyers in Toronto get a rebate of up to $4,475, for a net cost of ~$9,500. Combined LTT cost in Toronto: roughly $20,000 after rebates.
Legal Fees
$1,500–$2,500 for a real estate lawyer. This covers review of the agreement, title search, closing paperwork, and registration. Shop around — rates vary significantly between firms.
Title Insurance
$200–$400 one-time premium. Recommended by virtually every real estate lawyer in Ontario. Protects against fraud, survey issues, and unknown liens.
Home Inspection
$400–$600 for a licensed home inspector. An essential due diligence step that can save you from very costly surprises after closing.
Mortgage Default Insurance (CMHC)
Only applies if your down payment is under 20%. Premium ranges from 2.8%–4% of the mortgage amount, added to your loan. On a $800K mortgage with 10% down: ~$22,400 added to your mortgage balance.
Total Closing Cost Estimate
For a $900,000 home purchase in the City of Toronto with 20% down, a first-time buyer should budget approximately $25,000–$35,000 in total closing costs beyond the down payment.