What Is Closing Costs in Canada?
The additional expenses beyond the purchase price paid at closing, typically 1.5% to 4% of the home price. Includes land transfer tax, legal fees, title insurance, and home inspection.
Definition
Closing costs are the fees and expenses paid on completion of a real estate purchase, in addition to the down payment and purchase price. In Canada, closing costs typically range from 1.5% to 4% of the home's purchase price. Key components include: Land Transfer Tax (the largest variable, up to 2.5% or more in high-rate provinces); legal and notary fees ($1,500 to $3,000); title insurance ($150 to $400); home inspection ($400 to $600); property tax adjustment (buyer reimburses seller for prepaid taxes); title transfer registration fees; and a CMHC premium (if applicable, added to the mortgage). In Toronto, the additional municipal LTT can add another $5,000 to $20,000. Buyers should budget at least $15,000 to $25,000 in closing costs on a $600,000 purchase in Ontario.
Formula
Example
Purchasing a $650,000 condo in Toronto: Ontario LTT after first-time buyer rebate $9,225 + Toronto LTT $8,475 + legal fees $2,500 + title insurance $300 + inspection $500 = approximately $21,000 in total closing costs.