Closing Costs in Ontario: A Complete Breakdown for Buyers in 2025

 

Understanding closing costs in Ontario is one of the most important steps any homebuyer can take before signing on the dotted line. As of 2025, Ontario buyers are typically advised to budget between 1.5% and 4% of the purchase price in closing costs — on top of their down payment. For a $900,000 home in the Greater Toronto Area, that could mean an additional $13,500 to $36,000 in expenses that must be ready on or before closing day. This guide provides a clear, itemized breakdown of every major closing cost Ontario buyers face in 2025, so you can plan ahead with confidence.

Fardad Farhanian is a licensed real estate broker with RE/MAX REALTRON REALTY INC., Brokerage, serving clients across Ontario — including the GTA, Thornhill, Markham, Richmond Hill, North York, Vaughan, Mississauga, Barrie, Kingston, and beyond — with 25+ years of experience and $750M+ in successful transactions. Helping buyers understand the true cost of homeownership is a core part of his client-first approach. You can learn more about Fardad’s background and qualifications here.

What Are Closing Costs and Why Do Ontario Buyers Often Underestimate Them?

Closing costs are the fees, taxes, and expenses that must be paid to finalize a real estate transaction. They are separate from your down payment and are due on the closing date — the day legal ownership transfers from seller to buyer. Many first-time buyers in Ontario focus so heavily on saving for a down payment that closing costs catch them off guard.

The challenge is that closing costs are not a single fee — they are a collection of mandatory and optional charges, some of which are fixed (like government land transfer taxes) and others that vary by provider (like legal fees or title insurance). Knowing exactly what to expect allows buyers to avoid last-minute financial stress and negotiate more confidently.

Explore current residential properties available across Ontario and use this guide to estimate what your total purchase budget should look like before making an offer.

Ontario Land Transfer Tax: The Largest Single Closing Cost

The Ontario Land Transfer Tax (LTT) is a provincially mandated fee paid by the buyer at closing. As of 2025, Ontario’s LTT is calculated on a sliding scale based on the purchase price:

Purchase Price Range	Tax Rate
First $55,000	0.5%
$55,001 – $250,000	1.0%
$250,001 – $400,000	1.5%
$400,001 – $2,000,000	2.0%
Over $2,000,000	2.5%

For a home purchased at $900,000 in Ontario, the provincial land transfer tax alone would be approximately $16,475. Buyers in the City of Toronto also pay a Municipal Land Transfer Tax (MLTT), which mirrors the provincial structure and essentially doubles the land transfer tax burden. On that same $900,000 Toronto property, the combined LTT would be approximately $32,950.

First-Time Buyer Rebate: Eligible first-time homebuyers in Ontario receive a provincial LTT rebate of up to $4,000. Toronto first-time buyers also qualify for a municipal rebate of up to $4,475. These rebates can significantly reduce your closing cost exposure, but they come with eligibility conditions — always verify your status with a qualified real estate lawyer.

Legal Fees and Disbursements for Ontario Home Purchases

A real estate lawyer is legally required for every property transaction in Ontario. Legal fees for home purchases typically range from $1,500 to $2,500 for straightforward residential transactions as of 2025, though complex deals or higher-priced properties may cost more. This fee covers services such as reviewing the Agreement of Purchase and Sale, conducting title searches, registering the title, and managing the financial exchange on closing day.

In addition to the lawyer’s base fee, buyers pay disbursements — out-of-pocket expenses the lawyer incurs on your behalf. Common disbursements include:

• Title search and registration fees: $400 – $700
• Land registration fees (Teranet): $75 – $150
• Courier and administrative costs: $100 – $300
• Government search fees: $50 – $200

Total legal costs including disbursements often land between $2,000 and $3,500 for most Ontario residential purchases. Always obtain a written quote from your lawyer before proceeding, and never rely on online estimates alone.

Title Insurance Cost in Ontario: What It Covers and What It Costs

Title insurance is a one-time premium paid at closing that protects buyers (and lenders) against losses arising from title defects, survey errors, fraud, encroachments, and certain issues not discovered during the title search. As of 2025, title insurance in Ontario typically costs between $150 and $400 for residential properties, depending on the purchase price and insurer.

Most Ontario real estate lawyers strongly recommend title insurance, and most lenders require a lender’s policy as a condition of mortgage approval. A separate owner’s policy protects the buyer and is purchased in addition to — not instead of — the lender’s policy. Given that title fraud remains a real risk in Ontario, the cost of title insurance is widely considered excellent value relative to the protection it provides.

Home Inspection Fees in Ontario

A professional home inspection is not legally mandatory in Ontario, but it is one of the most valuable investments a buyer can make. As of 2025, home inspection fees in Ontario typically range from $400 to $700 for a standard detached home, with larger or older properties potentially costing more. Specialty inspections — such as for radon, WETT (wood-burning fireplace/stove), or sewer scoping — are additional and usually range from $100 to $300 each.

In competitive multiple-offer situations, some buyers have waived home inspection conditions. However, as market conditions normalize in parts of Ontario in 2025, more buyers are successfully negotiating inspection conditions back into their offers. Fardad Farhanian advises clients on when and how to include protective conditions without losing a competitive edge.

HST on New Construction Homes in Ontario

If you are purchasing a newly built home or condo in Ontario, HST (Harmonized Sales Tax) at 13% applies to the purchase price. This is a critical distinction between resale and new construction purchases. However, buyers of new homes priced under $450,000 may qualify for a partial HST rebate through the Federal New Residential Rental Property Rebate or the Ontario New Housing Rebate.

For new construction condos and pre-construction properties priced above the rebate threshold, HST can add tens of thousands of dollars to the purchase cost. In many cases, builders include the HST and rebate in the listed price — but buyers must confirm this with their builder and lawyer before finalizing any agreement. Explore available properties across Canada including new construction opportunities listed by Fardad’s team.

Mortgage Default Insurance (CMHC Premiums) and Related Costs

Buyers in Ontario who put down less than 20% of the purchase price are required by federal law to carry mortgage default insurance, administered through CMHC (Canada Mortgage and Housing Corporation), Sagen, or Canada Guaranty. As of 2025, the premiums are:

Down Payment	Insurance Premium (% of Mortgage)
5% – 9.99%	4.00%
10% – 14.99%	3.10%
15% – 19.99%	2.80%

The insurance premium is added to your mortgage balance, not paid upfront — however, PST (provincial sales tax) on the premium IS due at closing in Ontario and cannot be rolled into the mortgage. On a $500,000 insured mortgage with a 4% premium, the PST on the $20,000 insurance cost would be approximately $1,600 due at closing. For guidance on affordability and monthly payment estimates, try the RealtyMan mortgage calculator.

Property Tax Adjustments at Closing

On closing day, property taxes are adjusted between buyer and seller. If the seller has pre-paid property taxes beyond the closing date, the buyer reimburses the seller for the overpaid portion. Conversely, if taxes are unpaid to the closing date, the seller credits the buyer. These adjustments are calculated by your real estate lawyer and are typically included in the final Statement of Adjustments provided at closing. The amount varies depending on the municipality and time of year.

Additional Closing Costs Ontario Buyers Should Budget For

Beyond the major items listed above, Ontario buyers should plan for these commonly overlooked closing expenses:

• Moving costs: $1,000 – $5,000+ depending on distance and volume
• Utility connection and setup fees: $100 – $300
• Home insurance (first year’s premium or deposit): $800 – $2,000+ depending on property type and location
• Estoppel certificate (condos only): $100 – $200, required by the buyer’s lawyer
• Status certificate review (condos): $100 – $200 in legal fees to review the condo corporation’s documents
• Interest adjustment (mortgage): A small amount due if the first mortgage payment doesn’t align perfectly with the closing date — typically under $500

Total Estimated Closing Costs for Ontario Buyers in 2025: Summary

To illustrate the full picture, here is a realistic closing cost estimate for a $900,000 resale detached home in the GTA (outside Toronto) in 2025, with a 20% down payment:

Cost Item	Estimated Amount
Ontario Land Transfer Tax	~$16,475
Legal Fees + Disbursements	~$2,500 – $3,500
Title Insurance	~$250 – $400
Home Inspection	~$500 – $700
Home Insurance (first year)	~$1,200 – $2,000
Moving Costs	~$1,500 – $3,000
Miscellaneous / Utility Setup	~$300 – $500
Total Estimated Range	~$22,700 – $26,575

Note: Toronto buyers should add approximately $16,475 in Municipal Land Transfer Tax. First-time buyers may qualify for rebates that reduce these figures significantly.

Frequently Asked Questions: Closing Costs in Ontario 2025

How much should Ontario buyers budget for closing costs in 2025?

As of 2025, Ontario homebuyers should budget between 1.5% and 4% of the purchase price for closing costs, in addition to their down payment. The exact amount depends on the property’s location (Toronto buyers pay a municipal land transfer tax), whether the home is new construction (which triggers HST), and the size of the down payment. For a $900,000 GTA home, expect $20,000–$30,000+ in closing costs.

Do buyers or sellers pay closing costs in Ontario?

In Ontario, both buyers and sellers have closing costs, but they are different. Buyers are responsible for land transfer taxes, legal fees, title insurance, home inspection, and HST on new builds. Sellers typically pay real estate commission, their own legal fees, and any outstanding mortgage discharge penalties. The buyer’s closing costs are generally higher in Ontario because of land transfer taxes.

Are closing costs negotiable in Ontario?

Some closing costs are fixed by government — such as Ontario’s Land Transfer Tax, which cannot be negotiated. Others, like legal fees, home inspection fees, and title insurance premiums, can vary by provider. It is worth obtaining multiple quotes for legal services and home inspections. However, buyers should prioritize quality and credentials over price when selecting professionals for these critical roles.

What is title insurance and do Ontario buyers really need it?

Title insurance in Ontario is a one-time policy, typically costing $150 to $400, that protects buyers from financial losses caused by title defects, fraud, survey errors, or issues not discovered during the title search. Most mortgage lenders require a lender’s policy, and a separate owner’s policy protects the buyer directly. Given the relatively low cost and the protection it provides, title insurance is strongly recommended for all Ontario homebuyers.

Do first-time buyers in Ontario pay less in closing costs?

Yes. First-time buyers in Ontario are eligible for a provincial Land Transfer Tax rebate of up to $4,000, which can eliminate LTT entirely on homes priced under approximately $368,000. Toronto first-time buyers also qualify for a municipal LTT rebate of up to $4,475. To qualify, the buyer must never have owned a home anywhere in the world. Eligibility should always be confirmed with a licensed real estate lawyer before closing.

Work With a Broker Who Prepares You for Every Cost

Closing costs in Ontario can be significant — but with the right guidance, they are never a surprise. Fardad Farhanian, Broker at RE/MAX REALTRON REALTY INC., Brokerage, has helped hundreds of buyers across Ontario — from first-time condo buyers in North York to luxury home purchasers in Thornhill and Markham — navigate every financial aspect of their transaction with full transparency.

With 25+ years of experience, $750M+ in completed transactions, and fluency in both English and Farsi, Fardad ensures his clients understand what they are paying, why they are paying it, and how to plan strategically. Whether you are exploring your first home or your fifth investment property, visit the RealtyMan homepage for resources, listings, and expert insights — or contact Fardad directly to schedule a consultation.

Fardad Farhanian is reachable by phone at +1 416-707-1031 or by email at info@realtyman.ca. His office is located at 7646 Yonge Street, Thornhill, ON L4J 1V9 (by appointment). Browse all service areas and locations to confirm coverage in your target market.