It is essential to budget for more than just the property’s purchase price when purchasing a home in Canada.
Closing costs (typically range between 1.5% and 4%) of the home’s purchase price, are a collection of fees and expenses that must be settled before the transaction is finalized. The calculator below can help you break down most of the common closing costs.
Closing Cost Calculator for Buyer
Cost Breakdown
Land Transfer Tax: $0.00
First-Time Buyer Rebate: $0.00
CMHC Fee: $0.00
Legal Fees: $0.00
Title Insurance: $0.00
Home Inspection: $0.00
Appraisal Fee: $0.00
Land Survey: $0.00
Property Tax Adjustment: $0.00
Utility Adjustments: $0.00
Moving Costs: $0.00
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Land Transfer Tax (LTT)
Land transfer tax is one of the largest closing costs and is imposed by provincial and municipal governments.
- Calculation: It is calculated as a percentage of the property’s purchase price and is different by province.
- For instance, in Ontario, the tax rate is:
0.5% on the first $55,000
1% on the portion between $55,000 and $250,000
1.5% on amounts between $250,000 and $400,000
More expensive homes = higher rates.
- Municipal Rates: Toronto adds a municipal land transfer tax, effectively doubling the tax for properties within the city.
First-time homebuyers may qualify for rebates in certain provinces.
A real estate lawyer ensures the transaction complies with all legal requirements, handles title transfers, and manages funds.
- Cost: Legal fees often range from $1,000 to $1,800 (depending on the complexity of the deal and the lawyer.)
- Additional Costs: Disbursements (e.g., title searches) may add to this expense
Title insurance protects the buyer against potential disputes over property ownership or boundary issues.
- Cost: This one-time premium is generally between $250 and $400.
Inspection of the home that you plan on buying, is highly recommended to uncover structural or maintenance issues before purchase, even though not mandatory.
- Cost: Expect to pay between $250 and $700 (depending on the property size and inspector’s experience.)
For a home’s market value, lenders often require an appraisal to confirm.
- Cost: Appraisal fees could normally range from $300 to $600.
Typically, lenders carry the weight; however, as a buyer, you should confirm.
If a recent survey isn’t available, lenders or buyers may require one to confirm property boundaries.
- Cost: A professional property survey can cost anywhere from $1,500 to $6,000 (that too, depending on the location and property complexity.)
Typically, lenders carry the weight; however, as a buyer, you should confirm.
If your down payment is less than 20%, you’re required to purchase mortgage default insurance.
- Cost: Premiums range from 2.8% to 4% of the mortgage amount, which can be added to the mortgage balance.
- Provincial Sales Tax: This must be paid upfront and cannot be rolled into the mortgage.
Registering the mortgage and title fee (with the provincial land registry office) are common incurring costs.
- Cost: These fees normally total around $200 but are different by province.
For condo purchases, an estoppel certificate provides details on the financial and legal standing of the condo unit and its association.
- Cost: Usually around $100.
For prepaid costs such as below, you may need to reimburse the seller.
- Property taxes
- Utility bills
- Condo fees (if applicable)
The amount will depend on the closing date and the seller’s prior payments
Moving expenses should also be factored in even though not a direct closing cost and these could include hiring movers, utility setup fees, and additional expenses related to relocating.
Shop Around for Services: Always and always compare prices for lawyers, inspectors, and other service providers to secure market competitive rates.- Negotiate with the Seller: Sellers might agree to cover a portion of the closing costs in some cases - consider the convenience.
- Plan for Rebates: First-time homebuyer programs or incentives may help offset certain expenses e.g. the land transfer tax.
- Increase Your Down Payment: A 20% down payment eliminates the need for mortgage default insurance, significantly reducing costs.
Shop Around for Services: Always and always compare prices for lawyers, inspectors, and other service providers to secure market competitive rates.Summary.
Above, we have provided you with typical closing costs that we have seen our buyers have encountered over the years. Our closing cost estimator is for educational purposes and can be used to estimate closing costs incurred during the home-buying process in Canada.
Being aware of closing costs on a house can help with the budget and ensure a smoother transaction. For personalized advice, consult with a real estate professional or financial advisor familiar with your area.