Buying in Toronto and hearing about double land transfer tax? You are not alone. Closing costs can surprise even seasoned buyers, especially in the City of Toronto where provincial and municipal taxes both apply. This guide breaks down what you pay, why it matters, how first-time buyer rebates work, and what to expect on closing day, with clear examples to help you budget. Let’s dive in.
What counts as closing costs
Closing costs are the non–purchase price amounts you pay to complete your purchase and register your mortgage. In Toronto, these typically include:
- Land transfer taxes: Ontario Land Transfer Tax plus the City of Toronto’s Municipal Land Transfer Tax.
- Mortgage-related items: mortgage default insurance (if your down payment is under 20 percent), appraisal, and any lender admin fees.
- Legal and title: lawyer fees, disbursements, and optional owner’s title insurance.
- Adjustments: property tax, utilities, and condo common expenses prorated between you and the seller.
- Inspections and reports: home inspection and, for condos, a status certificate.
- Pre-closing items: home insurance in place before closing and moving arrangements.
You will see a mix of one-time costs at closing and a few items you set up for ongoing ownership, like insurance.
Land transfer tax in Toronto
Two taxes, one purchase
If you buy in Toronto, you normally pay two land transfer taxes on the purchase price:
- The Ontario Land Transfer Tax, calculated using marginal brackets listed on the provincial site. See the official overview and calculation method on the Ontario page for land transfer tax.
- The City of Toronto’s Municipal Land Transfer Tax, which mirrors the provincial bracket structure. Review the City’s rules and calculation on the Municipal Land Transfer Tax page.
Because the municipal tax mirrors the provincial schedule, buying in Toronto effectively doubles your land transfer tax liability.
First-time buyer rebates
First-time buyers may qualify for a provincial rebate and a separate City of Toronto rebate. Eligibility, documentation and maximums are set by each program. Start with the province’s guidance on the Ontario land transfer tax and the City’s guidance on the Municipal Land Transfer Tax. The provincial rebate is usually up to $4,000. The City rebate has its own maximum. Your lawyer typically applies the rebate at closing if you qualify.
Mortgage-related costs
Mortgage default insurance
If your down payment is under 20 percent, mortgage default insurance is required. CMHC, Sagen and Canada Guaranty provide this coverage. The premium is a percentage of your mortgage amount and can usually be added to the mortgage or paid at closing. Review current program details with the insurers: CMHC mortgage loan insurance, Sagen mortgage insurance, and Canada Guaranty mortgage insurance.
Typical published premium ranges many buyers see in the market:
- About 4.00 percent of the mortgage for 5 percent down (95 percent LTV)
- About 3.10 percent for 10 percent down (90 percent LTV)
- About 2.80 percent for 15 percent down (85 percent LTV)
- About 2.40 percent for 20 percent down (80 percent LTV)
Confirm current rates with your lender and the insurer, and ask whether the premium will be added to your mortgage.
Appraisal and lender fees
- Appraisal fee if required by your lender: typically $300 to $600.
- Some alternative or private lenders may charge application or admin fees. Many mainstream lenders do not.
- There can be a small interest adjustment if your first payment date is not aligned with closing.
Legal, title and inspections
Legal fees and disbursements
Expect about $800 to $2,500 in Toronto, depending on complexity. Disbursements often include land registry fees, title searches, EFT and courier charges. Your lawyer usually pays taxes and registration out of funds held in trust. To learn more about hiring a lawyer and costs, consult the Law Society of Ontario’s public guidance.
Title insurance
Owner’s title insurance is optional but common. It protects against title defects, fraud and certain costs related to title problems. Many lenders require a lender’s policy. Owner’s policies often range from about $150 to $400 for lower purchase prices, and can be higher for more expensive properties.
Inspections and condo status certificates
- Home inspection: usually $400 to $800 depending on size and age.
- Specialty inspections such as pest, sewer camera, or HVAC range roughly $100 to $800 each.
- Condo status certificate: typically $100 to $200. Your lawyer will review it.
Adjustments and other items
- Property tax, condo fees and utilities are prorated so each party pays for the period they own the property. These are bookkeeping entries that may result in a small debit or credit at closing.
- Home insurance must be in place before closing if you have a mortgage.
- Moving costs, utility connections and, for pre-construction, any interim occupancy fees are separate from your closing statement.
How much to budget
A simple way to plan:
- If your down payment is 20 percent or more, budget roughly 1.5 to 4 percent of the purchase price for closing costs, with land transfer taxes as the largest single item.
- If your down payment is under 20 percent, add the effect of mortgage default insurance. Many buyers roll the premium into the mortgage, which reduces cash needed at closing but increases the loan amount.
- Land transfer tax typically cannot be financed and is due at closing. Rebates for eligible first-time buyers can reduce the cash you need that day.
Toronto closing cost examples
These examples illustrate how the pieces fit together. Always verify exact figures with the official calculators and your lawyer or lender.
Example A: First-time buyer, $700,000 purchase, 5 percent down
- Purchase price: $700,000
- Down payment: $35,000
- Mortgage before insurance: $665,000
- Estimated mortgage insurance premium at 4.00 percent: $26,600
- Ontario LTT (illustrative): about $10,475
- Toronto municipal LTT (illustrative): about $10,475
- Combined land transfer tax: about $20,950
- First-time buyer rebates: provincial and City rebates may reduce the LTT if you qualify
- Legal and disbursements: about $1,200 to $2,000
- Home inspection: about $400 to $800
- Title insurance: about $150 to $400
- Estimated cash at closing if premium is added to the mortgage: down payment + combined LTT + legal/disbursements ≈ $57,000 to $60,000 before any rebates
Example B: Move-up buyer, $1,200,000 purchase, 20 percent down
- Purchase price: $1,200,000
- Down payment: $240,000
- Mortgage: $960,000
- Ontario LTT (illustrative): about $20,475
- Toronto municipal LTT (illustrative): about $20,475
- Combined land transfer tax: about $40,950
- Legal and disbursements: about $1,200 to $2,500
- Home inspection: about $400 to $800
- Title insurance: about $200 to $500
- Estimated cash at closing: about $282,000 to $285,000, plus moving and insurance
First-time buyer rebates: quick overview
If you have never owned a home before and meet the eligibility rules, you may qualify for both the provincial and City rebates. Each program has its own documentation and maximum rebate amount. Your lawyer typically applies on your behalf at closing. Start with the official resources for full details and current thresholds: the Ontario land transfer tax page and the City’s Municipal Land Transfer Tax page.
Your closing day checklist
Use this short list to stay on track:
- Confirm your final funds to close with your lawyer and how to deliver them.
- Bring government-issued photo ID as requested by your lawyer.
- Provide proof of home insurance to your lender and lawyer.
- Review the title search and any condo status certificate with your lawyer.
- Ask your lender to confirm the mortgage insurance premium, how it is paid, and your first payment date.
- Keep certified funds or a bank draft ready as directed by your lawyer.
Buying with clarity saves stress and money. If you want a tailored estimate of your Toronto closing costs and a plan to structure your purchase with confidence, connect with Nancy Hate to get started.
FAQs
What closing costs do Toronto buyers pay besides the purchase price?
- Expect land transfer taxes (Ontario and Toronto), legal and title fees, possible mortgage insurance and appraisal, inspections, and adjustments for taxes and utilities.
How do Toronto land transfer taxes work on a home purchase?
- You pay the Ontario Land Transfer Tax and a matching City of Toronto tax, both calculated using price brackets, which effectively doubles the tax in Toronto.
Can first-time buyers reduce land transfer tax in Toronto?
- Yes, eligible first-time buyers may receive separate provincial and City rebates; your lawyer typically applies these at closing using official program rules.
Do I need mortgage default insurance in Canada with under 20 percent down?
- Yes, if your down payment is under 20 percent, CMHC, Sagen or Canada Guaranty insurance is required and the premium can usually be added to your mortgage.
How much are legal fees for a Toronto home purchase?
- Legal fees and disbursements commonly range from about $800 to $2,500, depending on complexity and disbursement totals.
