In the fever and excitement of buying a home, sometimes buyers forget, or underestimate, just how much closing costs can add to their total purchase price. We always discuss a 5% minimum downpayment, but in reality, buyers need 5% down, plus up to 1.5-4.5% in closing fees (depending on what you buy). For buyers purchasing with less than 20% down, they need another 2.8%-4% in loan insurance (which can be added into the mortgage so you don’t have to pay it at closing).
This guide breaks down every closing cost you’re likely to face in the GTA in 2026. We’re going to touch base on resale closing costs, preconstruction closing costs, and discuss the soft costs and hard costs of buying a home.
Who This Guide Is For?
First-time buyers: pay close attention to the rebate section below, between the provincial and Toronto municipal rebates, you could save up to $8,475.
Pre-construction buyers: your closing costs can climb to double (or more) when compared to buyers of resale properties, and you also might need to factor in interim occupancy rent (which can be thousands more than a mortgage, or rent).
Everyone: we’ve included a rough calculator formula near the end, so you can get a ballpark number before your lawyer sends the real one.
What Are Closing Costs?
Closing costs are the fees and taxes you pay on top of your purchase price and down payment to legally complete the transaction. They don’t show up on the listing, which is exactly why they catch some people by surprise. While we can estimate closing fees quite accurately, we do not know the final exact number until a few days before closing, when the buyer and seller’s lawyer settle the Statement Of Adjustments.
As a rule of thumb in the GTA (outside of Toronto), always budget around:
- Resale homes: budget 1.5%–2% of the purchase price
- Pre-construction condos: budget 6-8% of the purchase price
Inside of Toronto, budget an extra 2%, to cover the second land transfer tax.
Land Transfer Tax (the Biggest Cost)
For most GTA buyers, land transfer tax is the single largest closing cost. If you’re buying within the City of Toronto specifically, you’re actually paying two of them stacked on top of each other.
Ontario Land Transfer Tax
Every property purchase in Ontario is subject to the provincial land transfer tax, calculated on a marginal bracket system:
| Purchase Price Portion | Rate |
|---|---|
| First $55,000 | 0.5% |
| $55,000.01 – $250,000 | 1.0% |
| $250,000.01 – $400,000 | 1.5% |
| $400,000.01 – $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
Toronto’s Municipal Land Transfer Tax
If your property is within the City of Toronto (not just the wider GTA), you’ll pay a second, nearly identical tax to the city on top of the provincial one, effectively doubling your land transfer tax bill compared to buying in Oakville, Burlington or Mississauga. This surprises a lot of buyers who assume “GTA” and “Toronto” mean the same tax bill. They don’t.
First-Time Buyer Rebates
If you qualify as a first-time home buyer, you can claim rebates on both levels of land transfer tax:
- Ontario rebate: up to $4,000
- Toronto municipal rebate: up to $4,475
- Combined maximum: up to $8,475 for a Toronto purchase
Together, these rebates fully eliminate land transfer tax for qualifying first-time buyers on homes valued at roughly $368,000 or less, and meaningfully reduce the bill above that. Eligibility generally requires that you (and your spouse) have never owned a home anywhere, and that you’re a Canadian citizen or permanent resident.
First-time buyers can also use savings from their Home Savings Account, and RRSP. First-time buyers can also claim a home purchase on their income taxes, giving themselves a maximum of $15,000 tax credit (which can add up to a refund of $1,500 in your personal tax bill).
As with any government program, the rules and thresholds can shift year to year, so confirm your eligibility with your lawyer before you count on it.
Hard Costs/Fees When Buying A Home
Beyond land transfer tax, a handful of fees apply to nearly every closing:
- Legal fees: typically $1,500–$2,500 for a standard resale transaction, covering your lawyer’s review of the agreement, title search, mortgage registration, and closing coordination
- Title insurance: usually $250–$1,000, protecting you against title defects, fraud, or survey issues. We write a guide here on title insurance, check it out!
- Adjustments: reimbursements to the seller for prepaid property taxes, utility deposits, or condo fees covering the period after closing
Variable & Potential Costs
Depending on your specific purchase, you may also budget for:
- Home inspection: $400–$700, strongly recommended for freehold properties, even brand new ones.
- Appraisal fee: $300–$500, sometimes required by your lender
- Mortgage default insurance (required if your down payment is under 20%): often several thousand dollars depending on loan size, but this one’s typically rolled into your mortgage rather than paid at closing, so it won’t hit your cash-on-hand number
- Moving costs: not technically a closing cost, but worth budgeting alongside everything else
Pre-Construction Closing Costs
Investor & Pre-Construction Corner: Pre-construction closing costs are some of the hardest to calculate with accuracy, and builders make it so on purpose. Somewhere in the 100+ pages of the builder’s agreement of purchase and sale, they outline some of the fees, or mention the type of charges they can charge you on closing (but they don’t put concrete numbers in the agreement).
These are the fees we know that Preconstruction purchasers must pay, on top of the usual resale fees:
- Development levies: charges from the municipality tied to your unit, often capped in your purchase agreement (but even a capped amount can run $10,000–$20,000+). Some new builds have the development levies already paid, while others do not place a cap on the total amount… an uncapped development levy can lead to tens of thousands in extra closing fees.
- Tarion new home warranty enrollment: a mandatory fee for warranty coverage on new construction
- Interim occupancy rent: for condos, you often move in and pay occupancy fees (covering interest, taxes, and a maintenance estimate) for months or even years before your unit’s final closing/registration actually happens. That interim occupancy rent is calculated at the 1-year mortgage lending rate, which is usually significantly higher than the mortgage rate you will have once you close.
- HCRA-related fees: Home Construction Regulatory Authority requirements that can add administrative costs
- Utility hookup fees
- Condo-related fees. Often times, a preconstruction condo will see builders charging one-time fees to top up the reserve fund
- Builder admin fees. The builders often charge administrative fees for each cash they cheque and for preparing the paperwork necessary to close your transaction.
- Builder’s loan dispersement fees. The construction loan on the property carries a fee which must be paid when the loan is canceled, and that fee is often passed on to the buyers.
Because these costs are baked into your purchase agreement, it’s worth having a lawyer review the agreement of purchase and sale before you sign, not after. We say this to every pre-construction client: the time to catch a surprise levy is before you commit, not on closing day. It’s also important to work closely with a real estate team who frequently sell preconstruction properties (like us), so you can be prepared for closing fees from the day you purchase the property.
HST TIP: New homes are generally subject to HST. That marketing price you see online is usually the price including all HST rebates, however, if you’re ineligible for the rebate, you have to factor in paying an additional $24,000 in closing fees. There are two HST rebates, the first is for end-users, and it is applied immediately at closing. The second is targeted to investors, and this rebate requires investors to close on the property and rent it out before they can apply for the $24,000 rebate. So investors need $24,000 extra on hand. (Important: As of mid-2026, there is a moratorium on HST for end-users and investors, but eligibility depends on purchase price, purchase date, and the date the property you purchase finally closes. Contact us for personalized, up-to-date advice on the HST rebates).
Deposits vs. Down Payment — What’s the Difference?
These two terms get mixed up constantly, so here’s the plain version:
- Deposit: money paid early, often at the time of offer or, for pre-construction, in staged installments, which is held in trust and eventually applied toward your purchase
- Down payment: your total upfront equity in the home, of which your deposit becomes a part. (On closing, your deposit is “transferred” or “credited” towards your total downpayment.
Prepare your deposit before you start shopping. For resale, it’s typically due the next banking day after your offer is accepted (in a seller’s market, a same-day deposit can give you an edge). Only certified funds are accepted, like a bank draft, certified cheque, and sometimes wire transfer, so keep those funds in an easily accessible account with a major bank rather than tucked away somewhere that takes days to move.
For Preconstruction, the first of the staggered deposits is due asap. The sales reps at the sales centre will help you sign an offer, but the signing officer for the developer will not accept your offer until a cheque accompanies it. So if you and another potential buyer are both vying for the same property, the first person through the door with the cheque gets the home.
When Are Closing Costs Due? (Timeline)
- The first portion of your closing costs are due the day of, or the day after, your offer is accepted. That is the deposit; which is usually 5%. Deposits hold an important legal function in the agreement of purchase and sale, read more about it here.
- Soft costs: The first if your soft costs usually comes in the days after your accepted offer. This is when you pay for home inspections, or status certificate reviews (if you bought a condo).
- The final remainder of your closing costs are due just before closing. These will be calculated between the buyer and seller lawyer a week before closing. On this day, you transfer the balance of your downpayment (so any money you were planning on putting down, minus the deposit you’ve already given), plus lawyer fees, land transfer taxes, and final property tax and utility adjustments.
- On closing, the bank will forward your loan to purchase the property to the lawyer’s trust account, and the lawyer will issue a mortgage on title against your home for the bank.
Closing Cost Calculator
Want a fast estimate before you talk numbers with your lawyer? As a starting point:
Estimated Toronto closing costs = Land transfer tax (provincial + municipal, minus any rebate) + $2,000–$3,000 (legal fees, title insurance, adjustments)For example, a $1,000,000 home in Toronto will carry an approximate closing cost amount of $38,500 ($16,475 Toronto land transfer tax, $16,475 Provincial land transfer tax, $300 appraisal, $700 home inspection, $500 title insurance, $2000 legal fees, $2,000 final adjustments). A total of 3.84% of the purchase price.
That same house in Oakville would be $16,475 less, for a total of $21,500, or 2.20% of the purchase price.
FAQ
How much are closing costs in Toronto on average?
Most resale buyers should budget 1.5%–4% of the purchase price, with land transfer tax (provincial and municipal combined) as the largest component. For preconstruction budget more than double: from 4.5-10% depending on the purchase price, location, and first-time buyer tax credits.
Do first-time buyers get a land transfer tax rebate in Toronto?
Yes. Eligible first-time buyers can claim up to $4,000 off the provincial land transfer tax and up to $4,475 off Toronto’s municipal land transfer tax, a combined maximum of $8,475.
Are closing costs different for pre-construction condos?
Yes, significantly. Pre-construction buyers face additional costs like development levies, Tarion warranty enrollment, and interim occupancy rent that resale buyers don’t encounter, often pushing total closing costs to 5%–10% of the purchase price or more.
Can closing costs be added to my mortgage?
Generally no. Most closing costs (land transfer tax, legal fees, adjustments) have to be paid in cash on closing day and can’t be rolled into your mortgage. Mortgage default insurance is the notable exception, since it’s typically added to your loan amount instead.
What’s the difference between a deposit and a down payment?
A deposit is money paid early in the transaction that’s held in trust and later applied to your purchase. Your down payment is your total equity contribution, which your deposit becomes part of on closing day.
Ready to Budget for Your Purchase?
Closing costs feel like a lot to track, but with the right numbers in hand early, there are no surprises on closing day. If you’re planning a purchase in the Oakville, Mississauga, Burlington or the Greater Toronto Area, whether resale or pre-construction, reach out and we’ll walk through the exact numbers together.
