What are closing costs in Ontario?

What are closing costs in Ontario?

In Ontario typically 1.5% to 4% of the purchase price should be earmarked for closing costs.. Various fees and taxes tied to property transactions in the province complicate the closing fee. Shaikh Law Office confirms, on average closing costs in Ontario ranges between 1.5% to 4% of the Purchase Price.

Below of the closing Costs in Ontario:

Land Transfer Tax fee

Depending on where the property sits and what it costs, Land Transfer Tax in Ontario erodes a buyer’s reserves through a progressive rate structure that punishes higher valuations more steeply. Rather than arriving as a flat figure, the tax reveals itself in layers. Ratehub.ca notes that land transfer taxes, ranging from 1.5 to 4% of selling price, are the legal and administrative costs you will need to pay when your house closes.

Legal fees 

Somewhere between $1,000 and $3,000, legal fees for closing in Ontario complicate the final tally, covering the quiet, essential work a real estate lawyer performs throughout the transaction. Baron Alloway of Alloway Property Group reveals that most lawyers charge between $1,200 and $2,400 for a standard residential purchase, a range that stalls any attempt at a single tidy estimate.

Title insurance fees 

Title insurance in Ontario carries a lopsided cost window, running anywhere from a modest $150 to a sobering $5,000, with property value and location complicating any simple forecast. WOWA.ca explains that closing costs are one-time fees real estate buyers must absorb when they decide to purchase a property in Canada, and these costs include, but are not limited to, land or property transfer taxes, lawyer fees, and inspection fees (Home Closing Cost Calculator 2024).

Inspection fee in Ontario

Though it stalls neither the sale nor the timeline, a home inspection in Ontario quietly demands $500 to $800, with a professional inspector assessing the property’s condition in ways that can surface uncomfortable truths. Shaikh Law Office states that home inspection fees run $500 to $800, optional costs that are strongly recommended (Closing Costs Ontario you MUST KNOW before Buying or Selling).

Appraisal fee 

Between $300 and $500, the appraisal fee in Ontario reveals what lenders suspect and buyers dread: an independent judgment of the property’s value that may not match the agreed price. Shaikh Law Office notes that appraisal fees, $300 to $500, arise because some lenders prefer to appraise the home before granting the loan, an optional but occasionally obligatory cost.

Registration fees

Around $200, registration fees in Ontario quietly mark the moment when a property’s ownership change is officially recorded with the government, a bureaucratic step that stalls closure until satisfied. Alloway Property Group notes that the average total for all registration fees can settle around $200, though contacting your lawyer will surface a more accurate estimate.

Estoppel certificate costs 

Just above $100, the cost of an estoppel certificate, also called a status certificate, for condos in Ontario reveals a narrow but sometimes troubling window into the condominium corporation’s financial and legal standing. Alloway Property Group states that the fee for a status certificate in Ontario is usually $100, a modest figure that nonetheless complicates condo purchases when the certificate surfaces unexpected problems.

Lawyer disbursements fees

Around $450, lawyer disbursements in Ontario stall the assumption that legal fees cover everything, revealing a separate category of expenses the lawyer absorbs and then passes along during the transaction. Shaikh Law Office includes disbursements of $450.00 as a distinct line in their closing costs breakdown, a quiet but non-negotiable addition.

HST fee

HST complicates Ontario closing costs by applying unevenly, attaching to certain professional services and fees while leaving others exempt. Rather than arriving as a predictable sum, HST stalls simple budgeting and reveals which specific items carry the additional burden. Seif Law Firm notes that closing costs are an unavoidable part of any real estate transaction, whether buying or selling (Closing cost calculator Ontario & Toronto).

Mortgage broker fee

For the borrower, the mortgage broker fee in Ontario stalls at $0, a rare pleasant surprise in a closing cost list that otherwise complicates nearly every line. Lenders absorb the compensation instead, paying brokers directly for the connection. Tim Bennett of Ratehub.ca explains that mortgage brokers are typically paid by the lender, and not by you, the borrower (Ratehub.ca, “How do mortgage brokers get paid?”).

Utility account setup fees

Utility account setup fees in Ontario surface unpredictably, shifting by provider and complicating the moving process when new accounts for electricity, water, gas, and other essential services must be established. Energyrates.ca advises that utility companies usually charge a setup fee for establishing electricity or natural gas delivery, though if your old utility provider serves your new location, they may waive this unwelcome cost (How to Set Up Your Utility Service When You Move in Ontario). 

Septic tank inspection fee

For rural Ontario properties, a septic tank inspection stalls buyer confidence until complete, typically costing between $250 and $500 to reveal whether the system’s condition and functionality meet acceptable standards. The Ontario Ministry of Municipal Affairs and Housing states that regular inspections of septic systems are important for ensuring they function properly and do not pose a risk to the environment.

Well inspection fee

Running from $300 to $500 in rural Ontario, a well inspection complicates the purchase process by scrutinizing the structure and water quality of the well, checking whether both meet the safety standards that protect occupants. The Ontario Ministry of the Environment, Conservation and Parks underscores why this quiet expense cannot be deferred, stating that well inspections help ensure the safety and quality of drinking water.

Real estate commission fee

Around 5% of the sale price, the real estate commission in Ontario erodes the seller’s net proceeds before the deal closes, splitting between the seller’s Realtor and the buyer’s Realtor, each of whom then divides their share further with their respective Brokerage. WOWA.ca reveals that in Ontario, the standard real estate agent commission sits at 5% of the property price plus HST, though in practice the figure can stall anywhere between 3.5% and 5%, with the buyer’s portion typically fixed at a lopsided 2.5% of the total.

Do some Ontario cities have additional land transfer tax at closing?

Yes, certain Ontario cities complicate the already burdensome tax picture by imposing an additional land transfer tax on top of the provincial one, with Toronto being the most notable example. The City of Toronto states that the Municipal Land Transfer Tax is a tax on the acquisition of an interest in land in the City of Toronto (Municipal Land Transfer Tax).

How is property tax adjustment handled in Ontario closings?

Rather than arriving as a fixed figure, property tax adjustment in Ontario closings stalls and shifts depending on the closing date and whether taxes have already been paid. Where the seller has prepaid, the buyer reimburses that amount, a calculation the lawyer handles quietly at closing. Axess Law states that property tax adjustments are calculated based on the closing date and whether property taxes have been paid in advance (The Additional Expenses to Expect as a Home Buyer).

Is home insurance required for closing in Ontario?

While the law does not mandate it outright, home insurance in Ontario complicates closing for nearly every mortgaged buyer, because most lenders require it as a non-negotiable condition of the loan. Sarita Harbour of Manulife Bank reveals that if your down payment is less than 20% of a home’s purchase price, you need mortgage loan insurance, also referred to as mortgage insurance or mortgage default insurance (Manulife Bank, “Financing your home: how does mortgage insurance work?”).

Are moving costs considered part of closing costs in Ontario?

Moving costs stall outside the formal closing cost category in Ontario, yet they surface as an unavoidable budget item that complicates the overall picture of what buying a home actually costs. Distance and the sheer volume of belongings erode any attempt at a single estimate. The Canadian Association of Movers advises that the cost of moving varies considerably depending on how far the move travels and how much is being transported (Budgeting for Your Move).

Are property management fees part of closing costs in Ontario?

Property management fees sit outside the closing cost category in Ontario, though they quietly complicate ongoing ownership for condominium buyers by becoming a recurring expense rather than a one-time charge. These fees cover the management and maintenance of common areas within a condo building. The Ontario Condominium Act reveals that condominium corporations are responsible for managing the property and common elements, and that owners pay fees to cover these costs (Government of Ontario, “Condominium Act, 1998”).

How much does a land survey cost in Ontario if required?

When required, a land survey in Ontario stalls the transaction until complete, with costs typically running between $1,000 and $2,000, a range that shifts based on the property’s size and how complicated the survey turns out to be. The Association of Ontario Land Surveyors states that the cost of a land survey can vary considerably based on the specifics of the property and the type of survey required (Land Surveying Costs).

What’s the mortgage discharge fee for sellers in Ontario?

Between $200 and $500, the mortgage discharge fee in Ontario erodes the seller’s final proceeds by one last lender-imposed charge, collected to release the mortgage and clear it from the property title once the sale closes. The Canadian Mortgage and Housing Corporation states that when you sell your home, you may have to pay a discharge fee to your lender to remove the mortgage from the property title.

To learn more about buying or selling your property or to start the process give us a call and our team will be happy to help you 705-331-3341.