Plan for roughly 1.5% to 4% of the purchase price in closing costs and transaction expenses, on top of the condo's price itself. On an $800,000 unit, that can mean somewhere between $12,000 and $32,000 in cash you need available before and at closing, and most of it cannot be rolled into your mortgage. The purchase price is the number everyone talks about. These are the numbers that catch people off guard.
Toronto buyers pay two land transfer taxes. The Ontario Land Transfer Tax applies to every purchase in the province, and the Toronto Municipal Land Transfer Tax stacks on top of it for properties inside the city. Both are calculated on a sliding scale based on the purchase price, so the bill climbs faster than you might expect as prices rise.
Here is what that looks like in practice. A condo purchased for $800,000 generates approximately $24,000 in combined land transfer tax before any rebates. That is not a typo. It is the single largest closing cost for most Toronto buyers, it is due in full on closing day, and your lender will not finance it.
First-time buyers get real relief here. The provincial rebate covers up to $4,000 and the Toronto rebate covers up to $4,475, and your lawyer claims both at closing so you never have to front the money and wait for it back. One catch worth knowing early: owning property anywhere in the world before, or having a spouse who owned property while married to you, generally disqualifies you from the rebates.
You need a real estate lawyer to close a purchase in Ontario. Legal fees typically range between $1,500 and $2,500 depending on the lawyer and the complexity of the transaction. That fee covers the title search, registering the transfer, moving the closing funds, and coordinating the paperwork between your lender, the seller's lawyer, and the land registry.
Title insurance is a separate line. It usually costs between $300 and $500 as a one-time premium, and it protects you against problems with the property's title, things like old liens, registration errors, or title fraud. Lenders almost always require it. You would want it anyway.
Because a condo is part of a condominium corporation, you are not just buying a unit. You are buying into the financial health of an entire building, and the status certificate is how you check that health. It contains the corporation's financial and legal information: the budget, the reserve fund position, any lawsuits, any special assessments being contemplated.
The certificate itself usually costs about $100 to $400, and your lawyer will charge a fee to review it. This is the cheapest insurance in the entire transaction. A few hundred dollars spent here can keep you out of a building that is about to bill every owner for a repair its reserve fund cannot cover.
Adjustments trip people up because nobody mentions them until the lawyer sends over the statement of adjustments shortly before closing. The idea is simple. When the seller has prepaid expenses that extend past the closing date, property taxes and monthly maintenance fees being the usual ones, you reimburse them for the unused portion. They paid for days they will not own the unit, so that money comes back to them through you.
Adjustments are rarely huge on a condo. They are still real money, and they are due on closing day along with everything else.
A handful of other expenses round out the bill. Moving expenses, mortgage appraisal fees, and utility setup costs are the usual suspects. None of them is dramatic on its own, but together they can add another thousand dollars or more to the move.
One more catches buyers putting down less than 20%: mortgage default insurance. The premium itself gets added to your mortgage balance, so you do not pay it in cash, but Ontario charges 8% provincial sales tax on that premium and the tax is due in cash at closing. On a big premium, the tax alone can run into the thousands.
This is why lenders on insured purchases typically want proof that you have funds equal to about 1.5% of the purchase price set aside for closing costs, separate from your down payment. When Advantage Group Real Estate builds a budget with a buyer, the closing-cost line goes in before we ever book a showing. Finding out about a $24,000 tax bill three weeks before closing is a bad way to learn this stuff.
Plan for approximately 1.5% to 4% of the purchase price, depending on the property and your situation. Land transfer tax is the largest piece by far, followed by legal fees, title insurance, the status certificate review, and adjustments. First-time buyer rebates can pull the total toward the lower end of that range.
Yes, but rebates soften it considerably. Eligible first-time buyers can claim up to $4,000 against the Ontario Land Transfer Tax and up to $4,475 against the Toronto Municipal Land Transfer Tax. Your lawyer applies both rebates at closing, so the savings come off the bill immediately.
Generally no. Land transfer tax, legal fees, title insurance, and adjustments are all due in cash on or before closing day. The one partial exception is mortgage default insurance, where the premium is added to the loan, though the provincial sales tax on that premium still has to be paid in cash.
Jeremy Van Caulart leads Advantage Group Real Estate, brokered by Royal LePage Signature Realty, and budgeting the full cost of a purchase is the first conversation the team has with every Toronto buyer.
Related reading: How Much Are Closing Costs When Buying a Home in Toronto?, How Is the Ontario Land Transfer Tax Calculated When Buying a Home in Toronto?, and What Land Transfer Tax Rebates Are Available to First-Time Buyers in Toronto?.