The True Costs of Buying a Home in Toronto
Land Transfer Tax
When purchasing property in Toronto, buyers are subject to two separate land transfer taxes: the Ontario Land Transfer Tax (LTT) and the Toronto Municipal Land Transfer Tax (MLTT). These taxes are calculated based on the property's purchase price and are payable upon closing.
For a $500,000 property in Toronto:
Total Land Transfer Tax: $6,475 + $6,475 = $12,950
For a $1,000,000 property in Toronto:
Total Land Transfer Tax: $16,475 + $16,475 = $32,950
For a $1,500,000 property in Toronto:
Total Land Transfer Tax: $27,475 + $27,475 = $54,950
First-time home buyers in Toronto may be eligible for a Land Transfer Tax rebate.
Total Possible Rebate: $8,475
Note: To qualify for these rebates, buyers must meet specific criteria, including:
You must be a Canadian citizen or permanent resident.
You must be at least 18 years old.
You cannot have owned a home anywhere in the world.
Your spouse (if applicable) must also be a first-time buyer.
You must occupy the home as your principal residence within 9 months of purchase.
Lawyer Fees (Closing Costs)
Hiring a real estate lawyer is essential to handle the legal aspects of your home purchase. Here’s what to expect:
Legal Fees: Typically range from $900 to $1,500
Disbursements: Additional costs for title searches, registration, courier fees, etc. — usually $300 to $600
Title Insurance: Often required by lenders, ranges from $250 to $500
Estimated Total Legal Closing Costs: $1,500 to $2,500
Home Inspections
A professional home inspection helps identify potential issues with the property before you finalize your purchase. It’s a smart investment, especially for older homes or fixer-uppers.
Standard Home Inspection: $400 to $700
Larger or Older Homes: Can range up to $800+
Specialty Inspections (e.g., mold, foundation, HVAC): Additional cost
Estimated Total Inspection Costs: $400 to $800+
Mortgage PST (Provincial Sales Tax on CMHC Insurance)
In Ontario, if you make a down payment of less than 20%, you’ll need to pay Mortgage Default Insurance (CMHC). The 8% PST on the CMHC premium is due at closing.
For a $500,000 property (10% down payment):
Mortgage PST: $1,116 (8% of $13,950 CMHC premium)
For a $1,000,000 property (10% down payment):
Mortgage PST: $2,232 (8% of $27,900 CMHC premium)
Home Insurance
Before closing, your lender will require you to have home insurance to protect against risks such as fire, theft, and water damage. The first year’s premium is typically paid upfront at closing.
Home Insurance Premium: $800 to $1,500+ per year for a standard home in Toronto
Required by the lender to ensure the property is insured
Paid upfront at closing (not added to your mortgage)
Estimated Total Insurance Cost at Closing:
$800 to $1,500+ (depending on size, value, and location of the home)
Final Steps Before Closing
Before closing, you’ll meet with your solicitor to sign the paperwork required to transfer the property’s title into your name. During this meeting:
Your solicitor will present a statement of adjustments, outlining all costs involved in the transaction.
You’ll provide instructions on how to transfer funds to the appropriate parties.
After the title transfer is complete, your lawyer will coordinate with you to arrange pickup of your new home keys.
