Closing costs catch more Ontario buyers off guard than almost anything else in the transaction — which means it's a conversation you'll have on nearly every deal. Budget 1.5%–4% of the purchase price on top of the down payment; here's exactly where it goes in 2026, laid out the way you'd walk a client through it.
What counts as a closing cost in Ontario?
Closing costs are expenses paid on or before possession date, separate from the down payment. They include land transfer tax, legal fees, title insurance, home inspection, and financial adjustments for prepaid property taxes or utilities the seller has already paid. Setting this expectation early — ideally at your first buyer consultation, not during offer negotiations — heads off the most common source of last-minute deal stress.
How much is Ontario Land Transfer Tax in 2026?
Ontario's LTT runs on a sliding scale: 0.5% on the first $55,000, 1% up to $250,000, 1.5% up to $400,000, 2% up to $2,000,000, and 2.5% above that. On an $800,000 home that's roughly $12,475. Toronto buyers pay a near-identical second municipal LTT on top — worth flagging immediately for any client house-hunting inside city limits, since it changes their real budget versus a comparable Mississauga or Oakville purchase. Full rates are published by the Ontario Ministry of Finance.
- First-time buyers receive an Ontario LTT rebate of up to $4,000, eliminating tax on purchases up to approximately $368,000.
- Toronto first-time buyers qualify for an additional municipal rebate of up to $4,475.
Do clients pay HST on a resale home in Canada?
No — a question worth answering proactively, since it comes up often. HST does not apply to resale residential properties. It does apply to professional services tied to the deal — legal fees, home inspections, and real estate commissions all carry 13% HST in Ontario.
Is HST charged on new construction homes in Ontario?
Yes. New builds are subject to 13% HST, though most builders factor it into the list price for primary residences. A federal GST/HST New Housing Rebate applies to homes under $450,000, returning up to $24,000. Homes above $450,000 receive only a partial rebate, and investment properties don't qualify at all — the full HST falls on the buyer. (See our companion guide on explaining the expanded HST rebate to new-construction clients for the full breakdown.)
What does title insurance cost, and how do you explain the value to a client?
Title insurance is a one-time premium of roughly $150–$400. It protects against fraud, survey errors, title disputes, and encroachments — risks a standard title search won't catch. Most Ontario real estate lawyers recommend it, and most lenders require a lender policy regardless of the buyer's preference, so framing it as "your lawyer will bring this up anyway" is usually the fastest way to move past it in a client conversation.
What other closing costs do clients typically overlook?
- Legal fees: $1,500–$2,500 including disbursements.
- Home inspection: $400–$600, typically paid before closing.
- Property tax adjustment: The buyer reimburses the seller for any taxes prepaid past the possession date.
- CMHC mortgage insurance: If the down payment is under 20%, premiums up to 4% of the mortgage are added to the balance — insured by CMHC.
How do you estimate total closing costs for a client's specific purchase?
Use 1.5%–2% of the purchase price as a baseline for resale homes, or 3%–4% for new builds once development charges and HST are factored in. On an $800,000 resale, that's $12,000–$16,000 beyond the down payment — a number worth having on hand the moment a client starts talking budget, before they fall for a listing that's priced right at their ceiling. Loop in their real estate lawyer for a full closing cost statement once an offer is close.
Every transaction has unique adjustments, and being the agent who has this number ready — before the client has to ask — is what makes a budget conversation feel like expertise instead of a surprise bill. Keep this page bookmarked, or send it directly to a client from Orchestate's CRM the next time the "how much do I actually need" question comes up.
