Closing Costs (Ontario)

What are closing costs in Ontario?

Closing costs in Ontario are the additional fees, taxes, and adjustments a buyer must pay on top of the purchase price when a real estate transaction completes. They typically total 1.5% to 4% of the purchase price, with the largest single component being the provincial Land Transfer Tax (and Toronto's separate Municipal Land Transfer Tax for properties inside city limits). Closing costs cannot be financed into a standard mortgage in most cases, so the buyer needs cash on hand at closing.

Typical closing-cost components

A worked example, $700,000 freehold purchase outside Toronto

• Provincial LTT: ~$10,475
• Lawyer's fees + disbursements: ~$2,000
• Title insurance: ~$400
• Property tax adjustment: ~$600 credit to seller
• Total estimated closing costs: ~$13,475, or about 1.9% of price

The same property in Toronto would add ~$10,475 of MLTT, bringing total closing costs to ~$23,950 — roughly 3.4% of price.

What the buyer needs in cash on closing

A buyer with a 20% down payment on a $700,000 freehold needs:

• $140,000 down payment
• $13,475 closing costs (outside Toronto)
• Plus moving expenses

Total cash needed at or before closing: ~$155,000. New buyers consistently underestimate the closing-cost portion. Quoting it accurately during the offer process is one of the highest-impact things a registrant does.

Where this appears in your Humber program

Closing costs are core content in Course 2: Residential Transactions under the closing module, with deeper coverage of HST handling on new builds in Course 3: Additional Residential and commercial-specific closing costs in Course 4. The math is exam-tested across multiple courses.

Practical guidance for registrants

• Quote estimated total closing costs in writing as part of every offer presentation. Surprise closing-cost bills are a top source of buyer regret and a leading cause of last-minute deal collapse.
• For Toronto buyers, always quote provincial + Toronto MLTT together. Quoting only the provincial number is a common new-registrant mistake that causes pre-closing panic.
• For new builds, HST handling is a separate conversation — the price advertised is sometimes net of expected rebates, sometimes not.

Frequently asked questions

How much are closing costs in Ontario?

Closing costs in Ontario typically run 1.5% to 4% of the purchase price. The single largest component is provincial Land Transfer Tax, which scales with the price using marginal brackets. Toronto purchases pay a separate Municipal Land Transfer Tax that roughly doubles the LTT portion. Other components — legal fees, title insurance, disbursements, adjustments — are smaller and more predictable.

What does the buyer pay at closing in Ontario?

The buyer at closing pays the down payment, all closing costs (LTT, legal fees, disbursements, title insurance, prorated adjustments), and any HST on new builds. The seller pays their own legal fees, real estate commission, and any mortgage discharge fees. Cash needed at closing is the down payment plus closing costs minus any deposit already paid.

Can closing costs be added to the mortgage in Ontario?

Standard mortgages cannot include closing costs in the loan amount. Some lenders offer "cash-back mortgages" where a percentage of the loan amount is paid back to the borrower at closing — this can offset closing costs but typically comes with a higher interest rate. The math usually does not favour the borrower over five years.

Are closing costs tax-deductible in Ontario?

For a personal-use principal residence, closing costs are generally not tax-deductible. For investment or rental properties, certain closing costs (legal fees, land transfer tax) can be added to the property's adjusted cost base for capital-gains purposes. HST paid on new builds may be partly recoverable through the federal and Ontario new-housing rebates.

Practice this topic

ExamAce drills closing-cost calculations and component breakdowns in the Course 2 question bank, with HST-on-new-builds variations in the Course 3 bank.