The Costs You Have to Plan For When Buying A Home

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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 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

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Lawyer Fees (Closing Costs)

Hiring a real estate lawyer is essential to handle the legal side of your home purchase. Here's what to expect:

  • Legal Fees: Typically range from $900 to $1,500

  • Disbursements: Additional costs for things like title searches, registration, and courier fees — 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

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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) may cost extra

Estimated Total Inspection Costs: $400 to $800+

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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)

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Home Insurance

Before closing on your home, your lender will require you to have home insurance to protect against potential risks (e.g., fire, theft, water damage). The first year’s premium is typically paid upfront at closing.

  • Home Insurance Premium: Typically ranges from $800 to $1,500+ per year for a standard home in Toronto

  • Required by 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 the size, value, and location of the home)

Before closing, you'll meet with your solicitor to sign the necessary paperwork to officially transfer the property's title to your name. During this meeting, your solicitor will present a statement of adjustments, outlining the costs involved in the transaction. You'll give your lawyer instructions on how to transfer funds to the relevant parties. After the title transfer is complete, your lawyer will coordinate with you to arrange for the pickup of your new home keys.